A fresh perspective on reform
There is a key difference between Manmohan Singh as the finance minister (1991-1996) and as the prime minister (2004-2014). While he was at North Block, Dr Singh had the luxury of an excellent team under his command. But the team assisting him during his longer stint at South Block was not even half as good.
That was a big difference. Four topnotch officers (excluding Ashok Desai who was chief consultant in the initial days of reforms) worked as part of a welloiled team in the finance ministry during the early 1990s. Two were technocrats (Montek Singh Ahluwalia as the finance secretary and Shankar Acharya as chief economic advisor, who resumed his stint with the finance ministry in April 1993) and the other two belonged to the Indian Administrative Services (Y V Reddy and N K Singh).
In the last four years, all four of them have brought out their memoirs to recount, among other things, the days that they spent in North Block to usher in those reforms. What stands out from their memoirs is the collegial way this team functioned as also during its deliberations with other stakeholders such as the Reserve Bank of India. There was debate, discussion and some disappointment, but what distinguished that environment was the presence of a cooperative spirit and, often, a convergence of views.
Of the four memoirs, the last to appear in print is by Dr Acharya. Undeniably, An Economist at Home and Abroad could have suffered from an inherent disadvantage in that the previous three memoirs had dwelt at length on how the finance ministry in the 1990s spearheaded India’s reforms. The novelty factor was almost gone.
Yet, Dr Acharya has kept the reader’s interest alive all through while presenting a fresh perspective on how the dramatis personae in the story of economic reforms played their different roles. That difficult task he has achieved with commendable clarity and rare candour. You cannot disagree with his assessment of how Manmohan Singh functioned as finance minister: “Generally, he was reserved and slightly formal as a personality. That made the flashes of informality and wit even more charming.”
Dr Acharya’s memoirs, however, are not just about his days in the finance ministry during the 1990s. The story of his work in the finance ministry begins much earlier in 1985, when chance and circumstance played a key role in his entry into North Block. The memoirs will also remind you how the author became the only senior advisor in the finance ministry, who was there before the crisis of 1990 and was back in North Block from 1993 to 2000 (And if he had agreed, he could well have been part of the economic policy advisory team under the Modi government in 2014!).
Apart from Manmohan Singh, the author also worked with two other finance ministers. V P Singh, under whom he helped produce the Longterm Fiscal Policy (LTFP), was “an excellent taxreforming FM, but part of his strategy of reduced income tax rates was stricter compliance requirements and expectations.” His assessment of
P Chidambaram and Yashwant Sinha was equally notable. He found them talented but did not mince words while describing Mr Chidambaram (“a clever and articulate lawyer, often charming and sometimes arrogant”). Interestingly, the author gives short shrift to the “so-called ‘dream budget’ of 1997”, which according to him became popular with the media and the affluent because of the reduction in income-tax rates but had regrettably contributed to “a stalling in fiscal consolidation.”
In contrast, the finance minister whom the author likes the most after Manmohan Singh, is Yashwant Sinha. Indeed, he rates Atal Bihari Vajpayee’s government, in which Yashwant Sinha was finance minister for several years, slightly higher than Narasimha Rao’s because the former had to deal with a “more unwieldy political coalition and without the benefit of the urgency … imparted by a grave economic crisis like that of 1991”.
The last two chapters are not strictly part of his memoirs. They provide a medium-term assessment of the Indian economy in the context of the challenges that have arisen from Covid19 and what could go right or wrong for India. They carry many sombre warnings about the future and since the author’s recent forecasts on the likely growth rate for the Indian economy have been mostly on target, those chapters are a grim reminder to policy makers that they must grapple with those challenges sooner than later.
Those looking for anecdotes will not be disappointed. Thrown in different chapters are delectable titbits arising out of the author’s various interactions — ranging from his “injudicious” decision to buy a used Premier Padmini car from Manmohan Singh in 1982 to CEA Bimal Jalan privately asking him to drop the term Modvat from the LTFP document and to his realisation at the dinner table in Lucknow that his Hindi was worse than the English of then chief minister of Uttar Pradesh, Mulayam Singh Yadav.
All in all, the book is an enjoyable read. The author has perfected the delicate art of combining storytelling and autobiography with the larger canvas of policy-making. Dr Acharya has achieved that difficult fusion with the skills of an accomplished writer.