Return and reforms

Will Manmohan Singh’s return to the finance ministry result in some reforms?

Pranab Mukherjee, an over-rated, over-respected and over-portfolioed cabinet minister presided over the finance ministry at a time when the results of UPA government’s gross mismanagement of the Indian economy began to show. His remedies worsened the malaise—not only has the economy slowed down, domestic and foreign investors have been given reason to believe that India’s economic managers are not only unserious, but also nearly banana. Retrospective taxation—Mr Mukherjee’s gift to economic policymaking—is an abomination and exemplifies how awfully perverted the UPA government’s thinking has been.

So, with Mr Mukherjee out of the cabinet (and undeservingly heading for Rashtrapati Bhavan) and Manmohan Singh taking over the finance portfolio, what are the prospects for reforms? None at all, argues the astute Swaminathan Anklesaria-Aiyar. Quite a lot, contends Sanjaya Baru. The truth may be in the middle, but despite Mr Baru’s valiant cheerleading, the odds are stacked up in favour of Mr Aiyar’s prognosis.

Samanth Subramanian sought my views for his report in The National. Here is my full response to his questions:

Q. Do you think the PM has the political capital he needs to make bold changes? Do you think, for that matter, that the government will risk making possibly unpopulist changes with the elections less than two years away?

Whether or not there will be any reforms depends on how much Manmohan Singh is willing to face down the Congress party establishment in order to secure his own place in history. It’s not so much about political capital but as he said in his 1991 speech “Sarfaroshi ki tamanna ab hamare dil mein hai/Dekhna hai zor kitna baazu-e-qatil mein hai.” Does he have Sarfaroshi ki tamanna?

Q. How much can any possible economic reforms redeem Manmohan Singh’s otherwise awful leadership of this UPA government?

What Manmohan Singh can do at this stage is revive the narrative of reforms, by setting out a long-term road map and by implementing the ones he can. The signal this will send will help set the economy back on track and hopefully redeem his own record.

Q. If you had to make a short, three-item wish list of reforms you hope he could enact, what would that list be?

Liberalise education, liberalise labour laws and start fixing land acquisition. Toying with fuel subsidies, reversing GAAR etc is mere signaling…the fundamental strengths of the economy can be reinforced only by liberalising education, labour and land acquisition. Playing around with financial markets and FIIs is mere tinkering. He must do what is necessary to revive direct investment, both domestic and foreign.

The relative status of military officers in India

How the decline can be reversed
In an interview in May 2008, the late K Subrahmanyam was scathing in his indictment of how the armed forces have devalued their own status. Reforming the organizational structures and processes so that a service officer’s “job size” is comparable to that of his civilian counterpart is an important, and “grossly overlooked” aspect of military modernisation.

This raises another point. A civil service recruit becomes a district magistrate in six years and is in charge of a district of a million people but an army recruit gets independent charge only after 18 years of service. Why should it take 18 years for an army officer to progress to that level? During the second world war, a man with five years experience was leading a battalion into battle. With eight years of experience, one would command a brigade. This anomaly has been grossly overlooked. [Pragati May 2008, PDF]

My op-ed in Mint: The civil-military balance

India needs comprehensive military reforms, not mere salary increases for officers

In today’s op-ed in Mint, Sushant & I argue that rather than merely addressing military pay and procurement in isolation, India needs to urgently conduct a fundamental overhaul of its armed forces. Continue reading “My op-ed in Mint: The civil-military balance”