A Man in Shadow

16 minute read
Krista Mahr / New Delhi

Nobody in Gah can quite remember when the village’s most famous house was torn down. Today, only a canopy of acacia trees and a patch of garbage mark the spot where Manmohan Singh grew up, destined to become Prime Minister of India. His mother died when he was young, and his father was often away from this remote farming village, in a drowsy corner of what is now northeast Pakistan, leaving Singh and his several siblings in the care of grandparents.

Today, things haven’t changed much for Gah. After Singh became Prime Minister in 2004, the local government, hoping for his return, scrambled to spruce things up, mending the potholed streets. Singh has yet to make the symbolic trip back to his childhood home, but he has corresponded with former village head Raja Ashiq Hussain, and locals credit Singh with inspiring an Indian nonprofit to outfit Gah with solar power a few years back. “People here love him,” says Hussain. “He is a son of the soil of Gah.”

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Singh could use that kind of support in New Delhi these days. Last quarter, India’s GDP growth fell to a nine-year low of 5.3% — a steep drop from 9.2% the same period last year and a worrying turn for a country that needs to stay on a high-growth path to pull hundreds of millions out of poverty. With the rupee hitting record lows, a yawning fiscal deficit and a lack of economic direction from the government’s top brass, investors at home and abroad are beginning to get cold feet. Voters too are losing confidence, as rising inflation and a litany of scandals chip away at the government’s credibility. In a recent national poll, nearly 66% of urbanites said Prime Minister Singh and his coalition had lost the right to govern. In late May, during protests over a steep hike in gasoline prices that erupted across the country, Singh was burned in effigy.

How has India’s technocrat in chief fallen so far from grace? In the past 20 years, Singh’s avuncular visage and signature powder blue turban were synonymous with India’s rising star, a fixture on front pages since the early 1990s, when, as Finance Minister, he played a pivotal role in liberalizing the economy and setting the nation on the path of fast growth. In a capital full of bluster and backroom deals, the quiet economist has long been admired for his restraint and personal integrity, characteristics that played a large part in his being handpicked by Congress Party leader Sonia Gandhi for the nation’s top job in 2004. During his first term, India’s economy reached a clip of 9.6% growth. Singh’s coalition passed laws to guarantee the right of rural Indians to work while improving civic rights and political transparency. In 2009, when the government was re-elected, the headlines trumpeted: SINGH IS KING!

The mood could not be more different now. For the past two years, the Congress-led coalition has found itself fending off scandals, most notably the corrupt awarding of 2G spectrum at prices below market value. In May, Team Anna, a group of supporters of antigraft activist Anna Hazare, leveled fresh charges at Singh and more than a dozen of his ministers over the alleged misallocation of coal-mining rights that, if true, could have cost the government billions in lost revenue. The PM has vigorously denied any wrongdoing, and Hazare admits there is no direct proof of Singh’s involvement. But Singh’s squeaky-clean image has taken a hit. “[Singh] doesn’t take money, he doesn’t make deals,” says Mohan Guruswamy, a fellow at the Observer Research Foundation, a New Delhi — based think tank. “But he doesn’t do anything.”

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Singh’s office declined multiple interview requests for this article and did not respond to written questions in time for publication. It’s in keeping with an increasing reticence that many find deplorable, whether it’s on the subject of graft or matters of economic policy. Today, 550 million Indians are under the age of 25, and the government needs to figure out how to guarantee those millions a future of long, gainful employment. “India can’t afford not to grow at 9%,” Y.K. Modi, a former president of the Federation of Indian Chambers of Commerce and Industry (FICCI), said at a recent New Delhi briefing. “Our government has to make policies that every young person gets the job he deserves, and the chance he deserves.”

But laws that could help create growth and jobs are stuck in Parliament, sparking concerns that politicians have lost the plot in their focus on shorter-term, populist measures that will win votes. Now that Singh is interim Finance Minister (filling in for Pranab Mukherjee, who stepped down to run for President) as well as PM, he has greater scope and a fresh opportunity to turn things around — but it’s by no means certain that he can. Swapan Dasgupta, a conservative commentator and analyst, says Singh would like to be remembered as “the person who initiated the process in ’91 and took India to become a vibrant economic power.” And yet: “While people talk fondly of his impact in ’91, they talk less fondly of the legacy he will leave behind in 2014.”

When Singh Was King
Few in New Delhi’s ministries and secretariats understand the aspirations of those millions of young Indians as well as the Prime Minister himself. Singh’s rise from studying by candlelight to becoming leader of the world’s largest democracy has been extraordinary and inspiring to a country where most people live a hardscrabble life in dirt-poor villages. Born in 1932, he spent his childhood shuttling between Peshawar, where his father had his fruit-trading business, and Gah, his grandparents’ rural home. His sister Gobind Kaur remembers her older brother as a social but serious boy who studied feverishly and whose hero was Bhagat Singh, the freedom fighter. “He’s thought about his country since he was a child,” says Kaur. When British rule over India ended in 1947 and the subcontinent was carved into the Muslim-majority state of Pakistan and the primarily Hindu state of India, the Singhs fled to Amritsar, on the Indian side. As the family found their feet in the young nation, Singh (or Papaji, to use the term of endearment his siblings still refer to him by) would sometimes entertain his brothers and sisters by singing his favorite independence anthem.

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“My father always said that one day [Singh] would be a very successful man,” says Kaur. And so he is. By the time he was 30, Singh had economics degrees from Panjab University (sometimes called Punjab University) and Cambridge, plus a doctorate from Oxford. He went on to occupy India’s key economic posts, becoming governor of the Reserve Bank of India and deputy chairman of the planning commission. It’s a trajectory that suggests a determination the soft-spoken man is rarely associated with. “Twelve years of your life you’re in a village, and a decade later, you’re at Oxford,” says Sanjaya Baru, one of Singh’s former media advisers. “You then get job after job after job that every economist dreams of. A lot of people say, ‘He’s colorless. He’s weak. He can’t take decisions.’ It’s all a put-on.”

The debate over whether Singh owes his success to ambition or luck goes back to the earliest days of his political career. In 1991, India was in the throes of a deep financial crisis after a rapid increase in government spending in the 1980s led to vast internal and external debt. With a downgraded credit rating that limited new borrowing, as well as a draining of deposits by nonresident Indians, the country had only a few weeks of foreign-exchange reserves left in its coffers. Delhi had to airlift the nation’s bullion to Europe to secure an IMF loan. Recognizing that drastic action was needed, then Prime Minister P.V. Narasimha Rao offered Singh the job of Finance Minister. Some still question which man was the real force behind the reforms that brought the nation back from the brink, eviscerating India’s restrictive licensing bureau, reducing tariffs, freeing up interest rates and expediting direct foreign investment, inter alia. But it was Singh, not Rao, who stood before Parliament on July 24, 1991, to present the game-changing 1991 — 92 budget. “As Victor Hugo once said, ‘No power on earth can stop an idea whose time has come,'” he declared in the final, rousing words of a speech that has become part of the lore of India’s rise. “I suggest to this august house that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear: India is now wide awake. We shall prevail. We shall overcome.”

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After leaving the Finance Ministry in 1996, Singh retained his seat in the parliamentary upper house and basked in credit for the Indian boom. In 2004, the Congress Party took back the government in a surprise win over the coalition led by the center-right Bharatiya Janata Party (BJP). Congress Party leader Gandhi was the natural choice for the job, but the fact that she was Italian-born had become a subject of controversy, particularly among Hindu nationalist groups. This very likely helped her decide to hand the reins to the less polarizing Singh. It was a savvy decision that also assuaged suspicions of the Gandhis’ dynastic tendencies among members of the new, Congress-led United Progressive Alliance (UPA). “They needed somebody who would be acceptable both to Congress and to the allies,” says Baru. “Manmohan Singh was that kind of a person.”

The move paid off. After general elections in 2004 left no party with a clear parliamentary majority, the UPA formed a center-left government by garnering support from major regional parties and some socialist ones, including the Communist Party. Together with Gandhi, Singh, who as a Sikh was the nation’s first non-Hindu Prime Minister, led the new government into a period of growth and progressive social legislation. Outwardly, he appeared decisive. He threatened to quit in 2008, for instance, when his political allies balked at a U.S. deal that opened up India’s civil nuclear facilities to international inspections and proved to be a watershed moment in U.S.-India relations. “He was taking India in a different direction,” says Dasgupta. “He was breaking from the past.” Voters responded: in May 2009, the UPA was voted into power for a second term, handing the coalition another five years at the helm.

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For Singh, it was a priceless mandate — one his critics say he has squandered. In the past three years, the calm confidence he once radiated has been absent. He seems unable to control his ministers and — his new, temporary portfolio at the Finance Ministry notwithstanding — unwilling to stick his neck out on reforms that will continue the process of liberalization he helped start. “Since 2004, we haven’t quite had a Prime Minister,” says Bibek Debroy, an economist at New Delhi’s Centre for Policy Research and a former adviser to Singh. Some believe his unofficial power-sharing agreement with Gandhi has tied his hands and that he lacks the clout to go against other party stalwarts. Jokes about his diffidence are circulating — like the one where Singh sits down in the dentist chair, and the dentist says, “At least here you can open your mouth!” His supporters blame the system. “Being a very sensitive person with an acute intellect, he realizes the limitations of what he has been able to achieve,” N.K. Singh, an upper-house MP who has worked with Singh since the late 1960s, said in May.

True, there is much that is outside Singh’s control. India’s democracy is defined by its raucous plurality, and the current coalition, representing interests from many corners of the vast country, has grown particularly unwieldy. Parliament too has become less productive. In the last session, only 14% of the lower house’s time was used to discuss legislation, according to PRS Legislative Research, a nonpartisan think tank in New Delhi. In fact, the number of hours that the legislature has met since the 2009 elections shows that this Parliament is shaping up to be “the worst ever,” says PRS’s M.R. Madhavan.

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Asleep at the Wheel?
The trouble started in earnest in 2010 when Andimuthu Raja, then Telecommunications Minister, was accused of selling 2G spectrum to private players at throwaway prices. By some estimates, the deals, made in 2008, cost the country as much as $35 billion in lost revenue. Raja denies the charges, but in February, the Supreme Court quashed all 122 government-granted licenses awarded under him, ruling them unconstitutional. Singh was accused of not acting quickly enough when the matter was first brought to his attention, and though the Supreme Court cleared Singh of any wrongdoing, damage to his reputation was done. “For the first time in his life, he was being accused of looking the other way,” says Baru.

“Wherever there has been a perception of any malpractice, the Prime Minister [and the government] have acted with alacrity,” says Manish Tewari, spokesman for Congress’s steering committee. But the cloud that the 2G scandal cast over Singh’s administration has since been darkened by other events, including the awarding of allegedly inflated commercial contracts at the 2010 Commonwealth Games and the resignation — most embarrassingly — of the head of India’s antigraft agency over corruption charges.

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The battered economy is another menacing concern. In a bid to cushion the pain of inflation and keep constituents happy ahead of ever looming elections, the UPA has been burning through its boom-time chests, spending on subsidies and social benefits. But business-friendly laws that could spur growth to offset that spending are languishing, and industry is struggling. Growth in the industrial-production index was only 0.1% in April, compared with 5.3% last year, and investors are running scared. “All new investment in the private sector has dried up,” Rajiv Kumar, FICCI’s secretary general, said in May. “I’ve never seen people as downbeat as they are now.”

There was some relief when Coca-Cola and furniture giant Ikea recently announced plans to invest billions over the next few years. A June 27 missive from Singh’s Twitter account called on officials to “revive the animal spirit in the country’s economy,” and he has also asked officials to re-examine a controversial retrograde-tax law. “He wants to be cautious because he knows the economy in India … is facing hardships,” says Pankaj Pachauri, Singh’s communications adviser. “He tells me, ‘Don’t raise expectations too much.'”

The problem is that expectations, and frustrations, have been high for years. India’s growth has occurred primarily in white collar sectors like IT (a very different model from other Asian economies that have focused on labor-intensive manufacturing). Many Indians believe this has simply put money in the pockets of urban elites, leaving the vast legions of poor no better off. In 1994, India was 135th on the U.N.’s Human Development Index. Last year, it ranked No. 134. Despite significant increases in expenditure on social programs, only 51% of Indians say they are satisfied with their standard of living, according to a recent Gallup poll, and 31% of adults — roughly 240 million people — are described by the agency as “suffering.”

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Poverty has been steadily declining (poverty rates are expected to drop to 22% by 2015, down from 51% in 1990, according to last year’s U.N. Millennium Development Goals Report), but the urgent question is how these improvements can continue. The vast majority of Indians still live in rural areas, even though agriculture now accounts for less than 20% of GDP. “What is the engine of growth in India, and what will be the engine of growth in India over the next 20 or 30 years?” asks Hun Kim, the Asian Development Bank’s country director for India. “The engine has to be big enough to move these people.”

Industry leaders are demanding a host of bold reforms, such as an end to expensive subsidies, deregulation of diesel prices and resumption of a law to allow multi-brand retailers like Walmart into India (the government originally backed down from such legislation in order to keep coalition members happy). In theory, Singh agrees. “We owe it to our country to take all the necessary decisions which would return the country to a high-growth path,” he told reporters during an airborne press briefing on his way back from the recent G-20 meeting in Mexico. But probusiness reforms are politically unpopular. “This is happening in a democratic society,” cautions C. Rangarajan, chairman of the Economic Advisory Council to the Prime Minister. “We need to convince everyone.”

Singh has joined the public soul-searching belatedly, and the electorate will let him know what it thinks of his performance in general elections scheduled for 2014. (They could be held earlier if relations within the ruling coalition, particularly between Singh’s party and the Trinamool Congress, led by mercurial Mamata Banerjee, continue to deteriorate.) Meantime, other players in Congress, most notably Rahul Gandhi, Sonia’s son, are positioning themselves to take Singh’s place. The opposition BJP is also working out its internal power struggles and choosing a front man who can take the government back. “The middle class is exasperated,” says commentator Dasgupta. “We have developed expectations far beyond our capacity to deliver.” Narrowing that gap should be a job for the man who launched those expectations 21 years ago with such oratorical flourish. India can only wait to see if Singh can rouse himself, let alone prevail or overcome.

with reporting by Ershad Mahmud / Gah and Kalpana Pradhan / Kolkata

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