Proper economic management is central to the good governance of a nation. India on a downslide for the past few years – from even before the start of the pandemic season – would do well to listen to saner counsel if only for its leadership to avoid taking the nation to further abyss. In this context, reputed former RBI governor Raghuram Rajan’s views expressed via an email interview to a media outlet deserve special attention. This, as the Finance Ministry is currently giving final touches to the Union Budget 2022 that will be presented in Parliament on February 1. Among other things, he suggests avoiding a K-shaped recovery after the Covid19 phase – or, avoiding a process of giving ‘top priority to recovery for technology sector, large capital firms etc., with less emphasis on small and medium sector of business and industry’ that had been majorly hit by the pandemic. Significantly, he has also supported asset sales to raise funds for the government in the given circumstances.
The going for India in most sectors of growth has not been impressive in recent times. One way to escape blame is to put the onus on the Covid19 pandemic; a time when enterprising nations even in the neighbourhood turned adversity to advantage and made hay. Looking back, the time when Narasimha Rao was prime minister and Manmohan Singh the finance minister, in the first phase of the 1990s, was a promising period. There was a total disaster to the economy due to the wayward governance of the past and India had no money to pay salaries to the government employees and no reserves to pay the export bills. Through a series of steps like economic liberalization, Rao and Singh uplifted the economy to healthy grounds. Both knew the fundamentals of growth. Singh had a great career graph as an economics professor, RBI governor and IMF consultant. Rao had in the past handled several central ministries. Put together, the two made a great mix. Governance is no child’s play.
We as a polity in a democracy need to learn from our past experiences that will help guide us to a better future. As for Rajan, he too had acquitted himself well as RBI governor but, true to his intellectual aura, drew a line while listening to his political masters. He stood his ground and understandably found his way out. We are back in sad times today. In this hour of a national crisis, the government will do well if it takes the saner advice from other worthies, including Dr Singh.
