The Legacy of Dr, Manmohan Singh

Piyal Chatterjee-27th December 2024

Dr. Manmohan Singh died at AIIMS, Delhi, on Thursday evening at the age of 92 from age-related health issues. Unexpectedly, he lost consciousness at home and was then quickly taken to AIIMS Delhi. Manmohan Singh was born on September 26, 1932. In addition to his role as an economist, he was the governor of the Reserve Bank of India from 1982 to 1985. Importantly, he served as the 13th Prime Minister of India from 2004 to 2014 and was the longest-serving PM after Jawaharlal Nehru and Indira Gandhi.

As University Grants Commission chairman, Dr Manmohan Singh had just returned from a conference in Netherlands when he received a call late in the night that changed India’s economic landscape and his career trajectory. In 1991, when PV Narasimha Rao took charge as the prime minister, the country fought a balance of payments crisis and political lows and the world was rattled by the fall of the Soviet Union. At this time, Dr Singh at that time was woken up by an “out of the blue” call from Rao’s then principal secretary PC Alexander, who told him that he was the pick to be the finance minister.

“He also jokingly told me that if things worked well we would all claim credit, and if things didn’t work out well I would be sacked,” he said in the book ‘Strictly Personal: Manmohan and Gursharan’ written by his daughter Daman Singh.

In the initial four years of his administration, the average yearly economic growth was 7.9 percent until the global financial crisis, initiated by Lehman Brothers’ collapse on September 15, 2008, reduced economic growth to 3.1 percent in 2008-09. Nonetheless, the average economic growth was 6.9 percent under Singh Government 1.0.

The growth rate seems somewhat subdued when contrasted with the previous method of calculating GDP based on the years 1999-00 and 2004-05. In that context, the intermediate three years – 2005-06, 2006-07, and 2007-08 – achieved a growth rate exceeding nine per cent before declining to 6.7 per cent in 2008-09 as a result of the global financial crisis. The initial term of the Singh administration resulted in an annual average growth rate of 8.5 percent according to that method. During the second term, his administration faced criticism as allegations of corruption against the regime emerged rapidly in subsequent years, including the 2G scam and the coal scam. This was hastened when Anna Hazare undertook a hunger strike in the national capital to advocate for the Jan Lokpal Bill (Citizen’s Ombudsman Bill) aimed at probing corruption allegations against public officials.

In light of these events, the government refrained from making significant decisions, leading to what was termed a ‘policy paralysis’. The economic growth declined to 5.2-5.5 percent in the third and fourth years before rising to 6.4 percent in the final year. The yearly average growth rate remained at 6.7 percent, slightly less than during the initial reign. Additional economic indicators reveal a great deal about the years of policy inaction. The nation’s foreign exchange reserves did not return to $309.7 billion, the level they reached in the year before the global financial crisis of 2007-08. This was caused by an expanding current account deficit (CAD) during the second period. The CAD increased to as much as 4.8 percent of GDP during 2012-13. In the previous year, it remained at 4.3 percent. The average annual CAD as a share of GDP increased to 5.24 percent in the second term from 4.06 percent in the first, as the global environment once more became challenging due to the eurozone crisis. Nevertheless, the government and the Reserve Bank of India skillfully managed the taper tantrum crisis of 2013.

The failure to promptly withdraw the fiscal stimulus provided to support the economy during the global financial crisis resulted in an expansion of the Centre’s fiscal deficit in the second term, with the expenditure-revenue gap consistently remaining above 4.4 percent of GDP across all years. The average yearly fiscal deficit of the Centre increased to 5.24 percent during the second term, compared to 4.06 percent in the first.

As prime minister, Singh made multiple significant decisions that still affect the well-being of Indian democracy to this day. He enacted new legislation that reinforced and ensured the right to obtain information from the government, empowering citizens with a remarkable ability to hold officials responsible. He additionally launched a rural employment program that ensured a livelihood for at least 100 days, a step that economists noted significantly affected rural incomes and reduced poverty. He also introduced a law that ensured the right to free and mandatory education for children aged 6 to 14, greatly lowering the rates of school dropouts. His administration launched a distinctive identity initiative named Aadhar to enhance financial inclusion and the distribution of welfare benefits for the impoverished. The present federal government, led by Prime Minister Narendra Modi, has maintained Aadhar as a key element in numerous policies.

In his last press conference as Prime Minister on January 3, 2014, Dr Singh was asked about his “best moment” and “biggest regret” as prime minister.

“I will need time to reflect on this. But certainly, the best moment for me was when we were able to strike a nuclear deal with the United States to end the nuclear apartheid which had sought to stifle the processes of social and economic change, and technical progress of our country in many ways,” he responded to the former question

In that press conference, Manmohan Singh was asked about allegations that he failed to check corruption on his watch. Responding to this, Dr Singh had said with a smile, “I honestly believe history will be kinder to me than the contemporary media or for that matter, the Opposition parties in Parliament.”

“I cannot divulge all the things that take place in the cabinet system of government. I think taking into account the circumstances and the compulsions of a coalition polity, I have done as best as I could do under the circumstances,” he added.