Win-win: Manmohan Singh gets the
nod By Indrajit Basu
KOLKATA - Sonia Gandhi's refusal -
twice in two days - to become India's next prime
minister may be as surprising as her Congress
party's election win itself, but Manmohan Singh
as the replacement candidate may just be what the doctor
ordered for the country's economy, stock markets,
industry chiefs and foreign experts say.
In a
day of high drama, on Wednesday afternoon Gandhi once
again confirmed that she would not take the premiership,
even after senior members of her party resigned to
pressure her, and crowds of supporters swarmed her house
in New Delhi. On Tuesday night, despite intense support,
Gandhi said that her "inner voice, my conscience" would
not let her take India's top job.
Eventually on
Wednesday, Congress members circulated a resolution
electing Singh as the leader of the Congress's
"parliamentary party" in place of Gandhi, which means
that his name would be put forward to President A P J
Abdul Kalam on Thursday for confirmation.
Singh,
71, is a former finance minister and the architect of
India's economic reforms that began in the early 1990s
to roll back decades of central control. To most
experts, Singh is the best choice for the post. Gandhi's
is an extremely clever move, as she gains, the Congress
gains, and India gains.
Martin Hutchinson, a
Washington-based ex-international investment banker who
specializes in investment opportunities in emerging
markets, said the future of India partly rested on who
got the prime minister's job. "A reformer [like Singh]
locks in economic progress, whereas an old-guard
socialist, or a weak leader without intellectual
background [Gandhi], raises the risk profile of foreign
investment in the country considerably," he said.
For the country's stock markets, perhaps nothing
could be a better balm in chaotic post-election India as
Singh as the next prime minister. The markets remained
bullish on Wednesday despite the political uncertainty
early in the day. The 30-share Mumbai stock exchange's
Sensitive Index, which opened 65 points higher at 4,942,
soon breached the 5,000 mark to touch an intra-day high
of 5,060 on strong buying support across the board. It
eventually closed up 129 points on the day at 5,006. The
S&P/CNX Nifty Index of 50 stocks on the National
Stock Exchange rose 64 points to close at 1,568.
Said Hutchinson: "The principal uncertainty
among foreign investors over the incoming Congress-led
government was the fact that Sonia Gandhi promised to
the electorate that she would attempt to boost growth by
additional injections of public spending [which would
have more than likely, given the Gandhi family's fiscal
history and belief system]. That would have quickly made
India's fiscal position run out of control, bringing
economic growth to a juddering halt. One could be
optimistic if Manmohan Singh himself were to be the
prime minister."
Singh became a household name
for an entire generation of Indians in 1991, when, as
finance minister, he brought the country away from the
verge of bankruptcy through his famous economic
liberalization that opened India's decades-old closed
economy - considered to be a caged tiger - to global
forces. Through those policies he also articulated his
conviction that India would emerge as an economic power,
a position that the country eventually attained almost a
decade later. Thus, as one of the more non-political
faces of Indian politics, Singh is now best known as the
"liberator" of the Indian economy.
Under his
stewardship, India was transformed from an
aid-dependent, inefficient, state-controlled autarky
into a fast-growing part of the global economy, drawing
energy from the forces of the market instead of running
scared from them. Singh commands respect, for his
integrity, intellect and, significantly, the complete
trust and backing he enjoys from the actual political
leadership that has won the people's mandate to lead a
new government.
He studied economics at
Chandigarh, in Canada and at Oxford, and taught at
Punjab University and the famous Delhi School of
Economics. He began his tryst with economic policymaking
in 1966, served as economic adviser, deputy chairman of
the planning commission, governor of the federal bank -
the Reserve Bank of India - and secretary general of the
South Commission. He has won several awards for his work
and contribution to society, including the "Padma
Vibhushan" - the country's top award - in 1987, the
Euromoney finance minister of the year award in 1993 and
the Asiamoney finance minister of the year award in 1993
and 1994.
He was first elected to the Rajya
Sabha - the upper house in the Indian parliament - in
1991, and has represented the Congress there since. In
1999 he contested the Lok Sabha - lower house -
elections from South Delhi, but lost. At the peak of
reforms in the mid-1990s, as well as in the 2004
elections, Singh was roped in as a star campaigner by
the Congress to carry the message of economic reforms to
the masses.
"We will have an economist as the
prime minister who is also a unifying figure for the
country," said a spokesperson from UBS Investment
Research, Hong Kong, while the Indian brokering
community feels that Singh's elevation means that the
next finance minister will be either P Chidambaram or
Jairam Ramesh. Both are considered as the Congress's
other economic experts who are pro-free-market and
pro-reforms as well. "Having strong, well-respected
economists as prime minister and finance minister will
give the Congress-led coalition enough clout to ward off
threats from the left parties," said Ramesh Damani, a
leading Bombay Stock Exchange broker, referring to the
communist parties on which Congress will have to rely in
parliament for a majority.
Industry chieftains,
too, have given Singh their thumbs up. "Singh will be a
good choice," said N Srinivasan, director general of the
industry lobby the Confederation of Indian Industry, and
according to Onkar Kanwar, yet another corporate honcho,
"Singh will go a long way in providing the stability
corporate India is looking for."
Meanwhile,
Singh as the next prime minister certainly comes as bad
news for the political opposition (read the Bharatiya
Janata Party - BJP) "which, owing to a lack of any other
tenable issues", say Congress members, "was threatening
to jeopardize the country's political stability by
raising the issue of Sonia Gandhi's foreign origin
[Italian birth]". In fact, Sushma Swaraj and Uma
Bharati, two prominent BJP members and ministers in the
erstwhile coalition government that the BJP led, had
even called on the president, urging him not to invite
Gandhi to form the new government as a prime minister.
"It [Sonia Gandhi's refusal] will bury once and for all
the foreign-origin issue that has bedeviled her
leadership of a Congress-led formation at the center,"
Congress party workers said.
Nevertheless,
Gandhi's refusal to accept the prime-minister post
appears to have reopened the issue of dual power centers
that the Congress resolved decades ago. The tussle
between government and party was settled in favor of the
former during the tenure of Jawaharlal Nehru and Indira
Gandhi, both of whom were powerful prime ministers. But
things may be turned on their head now, say skeptics, as
Sonia, Indira Gandhi's daughter-in-law, has opted out of
government.
Premier-designate Singh, therefore,
will have to keep looking over his shoulder as Sonia
continues to operate out of the Congress headquarters as
the party chief. As Congress president and its star
campaigner, Sonia will have far greater power and
political legitimacy than her hand-picked prime
minister. "Sonia's word is bound to carry more weight
than the prime minister's," said one political
commentator.
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party's election win itself, but Manmohan Singh
as the replacement candidate may just be what the doctor
ordered for the country's economy, stock markets,
industry chiefs and foreign experts say. 
