T Thomas: Singh's tryst with India

Two areas the PM should focus on are decongesting agriculture and labour reforms

As one looks around the world it is heartening to realise that, compared to any other country, we in India have today the best possible person as Prime Minister. Dr Manmohan Singh has the distinction of progressing from a village school in Punjab to Oxford, where he took his doctorate in Economics""all on scholarship.

He has worked as professor at Delhi University, secretary to the department of economic affairs, governor of the RBI, and finance minister, before becoming Prime Minister. No other Indian in politics has had such a distinguished career path.

But what makes Manmohan Singh unique are not only his achievements but also his humility, extreme honesty, and ability to think independently. Compared to him, George Bush is a cowboy from Texas not only in his appearance but also in his depth of intelligence and approach to issues.

Tony Blair could well have been Manmohan's postgraduate student at Oxford. Jacques Chirac can do with some lessons from Manmohan Singh on humility and building bridges with partners. President Putin has yet to graduate from the school for sergeant majors, compared to our scholarly Prime Minister. We in India do not always recognise this reality, and our good fortune at this juncture in our nation's evolution.

I had met Dr Singh in the late 1970s, when he was secretary, economic affairs, under Charan Singh, who was then Finance minister. We discussed how a multinational corporation should respond to the new Fera guidelines.

Although we did not agree on what was to be done, I think we parted with mutual respect as professionals. Later, when he was governor, RBI, I had invited him to be chief guest at the annual speech day of Cathedral School in Bombay.

While introducing him, I made a wishful prediction that Dr Singh would one day be the Prime Minister of our country. I am not an astrologer, but my instinct told me that of all the people I had met in government, he was the one man who could lead this country to its full potential.

What impressed me most about him as a role model for our young students was his honesty, which is so rare among politicians throughout the world. As secretary, economic affairs, he had continued to live in his own modest house in Old Delhi and had to commute to North Block each day.

Instead of using the car from the finance ministry, he chose to use public transport because he felt that going from home to work was a private trip for which he should not use an official car. I thought and still do think that he was carrying it a bit too far, considering the unreliability of Delhi Transport Corporation.

Many years later, though he held no official position and had no regular income to support his family, he refused to receive any financial reward by being an advisor to private sector companies. Which other person in Indian politics could have resisted the temptation? He believed that it would compromise his position. Fortunately, he was able to go back to the Delhi School of Economics.

The other very remarkable trait in Dr Manmohan Singh is his ability to learn and to change. When he was inducted into the government, India was in the socialistic phase under Indira Gandhi. As a man from a middle class background, he had no problem in accepting that philosophy, just as most of us did at that stage.

But as he assumed wider responsibilities and saw how socialism was holding back progress, he revised his attitude to both the public and private sectors""not to discard one for the other as some others have done, but to marry the benefits of public ownership with the merits of entrepreneurial management.

When under his watch as finance minister, India introduced economic liberalisation in 1991, it was a bold step taken out of economic compulsion. We were nearly broke and on the verge of defaulting on international obligations.

But now in 2004 we are in far better shape to pursue a more liberal economic policy with healthy foreign exchange reserves, a favourable balance of trade, steady economic growth at about 6 per cent, and above all a man like Dr Manmohan Singh at the helm!

He was wise enough to choose P Chidambaram, a graduate of Harvard Business School, to be finance minister. Perhaps no other country can claim an Oxford Ph D and a Harvard-educated lawyer in these two key positions at the top.

Fortunately for the country, the obscurantist fringe of the BJP has got itself diverted into following the maverick Uma Bharti in her flag-hoisting adventures in Hubli. They seem to be on another road to Ayodhya, which will take them nowhere. They have yet to realise that Indians have moved away from being an obscurantist society to being more economically aware.

People are beginning to see the benefits of economic development and the effectiveness of liberalisation. At an annual growth of 7 per cent from now on, the Indian economy would grow by 40 per cent in the next five years. This is something which will make an impact both at home and abroad.

Looking ahead, Dr Singh has to focus on two areas during the next five years. Although over 70 per cent of our population are currently dependent on agriculture, we have to recognise that agriculture is an activity that creates goods which are surplus in most parts of the world. We have to shift 25""30 per cent of our people from agriculture to manufacturing and services, if our economy is to progress.

We should give up the romanticism about agriculture. Agriculture should be seen more as a means of keeping 70 per cent of our people occupied for an interim period while we shift half of them out of agriculture. The service sector by itself cannot absorb an additional 30 per cent. The bulk of them have to be shifted gradually to manufacturing jobs.

The great challenge is how to create manufacturing jobs that can absorb up to 100 million people. India has a great advantage in terms of costs and skills in manufacturing. The key is to find international companies which will source components from India. This can be in electronics, auto parts, telecommunications, healthcare products, etc.

To facilitate this, one thing Dr Singh could do is to authorise private banks instead of rule-bound RBI to handle the flow of investment funds. The second area to focus is on our labour laws. Dr Singh has to convince his coalition partners on the Left that labour policies have to be made more flexible and the closure of enterprises less cumbersome.

A sincere dialogue by Dr Singh could convince the Leftists. If that is done, India can attract some of the largest companies to invest in manufacturing in India. Fortunately, labour is a concurrent subject. Therefore, the Prime Minister can work with some of the more progressive states to evolve a more liberal labour policy.

Having done these two things, Dr Singh can showcase the new face of India to the developed world of Japan, the US, and the EU. That is where he and Mr Chidambaram will have great credibility and can do a better job than any other pair of ministers from any country.

Their competence and credibility will instil confidence in business leaders in most countries abroad. He should ignore the antics of the Opposition and focus on these major challenges. The people of India are behind him and will continue to be supportive of his clean, unassuming and thoughtful leadership. This is Dr Manmohan Singh's tryst with India and its history.