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'Manmohan is politically shrewd'

Dr. I G Patel | May 20, 2004 08:47 IST

I do not think there is much difference between Sonia Gandhi being the prime minister or Manmohan Singh occupying the post. Either way, Gandhi will take care of the larger political picture. It hardly makes a difference in terms of division of labour and nature of work. 
Singh's personal vibes are very soothing and he can take people together to an extent. Gandhi will, however, remain responsible to make the coalition government function smoothly. 
Unlike the general perception, Singh is not really a bureaucrat. My personal experience is that he is politically shrewd. 
However, people should not expect too much from him on the economic front. I am not very confident of Singh being able to take really bold steps, given the nature of the Congress-led coalition. 
I do not know why people are talking so much about divestment. The Bhartiya Janata Party was going too far in an attempt to show a smaller budget deficit. The real issues, however, are subsidies and free power. 
Already, two states -- Andhra Pradesh and Tamil Nadu -- have decided to give power free to farmers. This will act as a deterrent to private investment. Moreover, if we continue to do this, then where will we get the funds to alleviate poverty? This, in my view, is gross misuse of the tax payers' money. 
Even in 1991, Manmohan Singh could not carry reforms too far. He abolished industrial licencing and cut import duties. But these did not hurt anybody. 
On subsidies, though, he could not do much. He had to roll back the harsh steps he took on fertiliser subsidies. This is not Singh's weakness alone, but that of coalition politics too. 
Reforms have been slow in the country, but steady. It will remain so. The problem is that the macro-economic scenario has worsened year after year. The revenue deficit has gone up to 4 per cent. And nobody has talked about labour reforms. 
So, do not judge Singh too severely on the macro-economic front. And do not underestimate his savviness on the political front.

(Dr. I G Patel is the former Governor of the Reserve Bank of India)

India Votes 2004

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