Montek Singh riding a lumbering elephant

Ishar Judge Ahluwalia and Montek Singh Ahluwalia

By Rekha Bhattacharjee

Volumes have been written about the rise and rise of the Indian economy in the last two decades. While the impressive growth of the economy has been well documented, the architects behind this phenomenon mostly remain un-applauded.

The Indian economists and planners problems are compounded by frequent comparison with the roaring economy of neighbouring China. The critics of the comparatively slow northward movement of the Indian economy need to be aware about the complexities of the Indian system impeding robust all around growth. No wonder, the South Asian economy is often labeled as lumbering elephant to China’s hyperactive Chinese dragon.

Montek Singh Ahluwalia, Deputy Chairman of India’s Planning Commission, is one such economist who has made the Indian growth story possible by helping the stagnant Indian economy to catapult to a position of pre-eminence in the region.

The hard work put in by Montek Singh has not gone totally unheralded as his planning genius is recognized by various global organizations. International Monetary Fund (IMF) is one such body. It is being widely speculated that the alumnus of Delhi University may become the first head of the IMF from non North American and European background once the term of the incumbent Director Dominique Strauss-Kahn comes to an end in 2012.

While Montek Singh was put into the driving seat once Congress came to power in 2004 under the Prime Ministership of Manmohan Singh, the liberalisation process of the Indian economy started around 25 years back in mid-eighties. The process to get rid of stifling bureaucratic restrictions and outdated socialist economic policies accelerated in early nineties.

“A much more explicit change in policy occurred after 1991, with acceptance of the need to bring about a systemic change, albeit in a gradualist fashion,” Montek Singh mentioned in an article titled ”˜Planning then and Now’. “The private sector was freed of much of the stifling controls that had been evolved over many years in the name of planning and rational allocation of scarce resources,” he further wrote about the liberalization process initiated in mid-nineties. “Much greater room was allowed for entrepreneurs to respond freely to market forces with greater reliance on competition to increase efficiency,” Montek opined in the article.

The Indian growth story has since accelerated gradually with planners like Montek Singh making sure that the spurt is not ephemeral. There are number of bottlenecks, social issues, political compulsions and other factors which can impede the growth rate in a democratic setup like India.

The way Indian economy had shed shackles in the past two decades is clearly discernible and even stringent critics of the way things are moving in the South Asian country would not deny the growth. The acceleration has been significant while Montek Singh has been in the Planning Commission saddle.

“It has become one of the favoured destinations for foreign direct investment, and particularly in this decade, the expansion in the volume of foreign direct investment have been really quite remarkable, indicating the extent to which foreign investment perception investor perceptions have changed,” Montek Singh wrote in an article.

“In 2001, total foreign investment in India was about $4 billion, and in 2009-2010, that had increased to $37 billion. So that’s another indication of how the economy’s been seen globally,” the Deputy Planning Commission chief added.

Montek Singh has been emphasizing that the growth has to be gradual and there would be numerous challenges which need to be taken care of.

The Planning Commission economist recently identified energy, water management, urbanisation, climate change, and ”˜regional balance’ as the five major roadblocks for the Indian planners drafting the 12th Five-Year plan. Surprisingly, he did not list corruption as one of the major stumbling blocks.

“”¦all forms of corruption have actually disappeared. I’m not referring to petty bribes that people might have to pay, sort of grease money,” Montek answered when Prof Gareth Evans posed a question about corruption in the 2010 K R Narayanan Oration on “India’s prospects in the post-crisis world” organized by Australian National University (ANU) on 29th November in Melbourne.

“But, you know, 20 years ago the corruption was around getting industrial licensing, getting import licences, getting foreign exchange permit; all of that has just more or less disappeared,” Montek Singh rationalized.

The Indian planning body is not only bothered by the aforementioned ”˜challenges’ but a series of other impeding factors too. There is an ongoing process put in place by Montek to fast-track the planning process and remove the roadblocks to accelerate the growth rate even further.

Few months back, a meeting of about 150 officials of the Planning Commission was organised in New Delhi to discuss 40 major issues confronting the country. Various issues such as employment, agriculture and energy were reportedly discussed in the meeting attended by the top planners.

This meeting is stated to be first such occasion when such rigorous, out of the box exercise was organized to vitalize the planning process.

The top planners team is reported to have identified 15 issues including employment led growth and also making markets work for the poor. The list of 15 issues would be cut short to 10 to form the basis of the 12th Five Year Plan.

The premier Indian planning body comes under further strain because of the rapid growth rate maintained by the most populous country in the world China. While discussing the Indian growth story, one has to keep the perspective focused and respect the differences too.

“The big difference between China and India, because in China the objective is a harmonious society. That’s an end result objective. In India the objective is an inclusive society that is also very process-driven,” Montek Singh writes about the so-called China-India rivalry.

Montek Singh Ahluwalia could be seen to be cruising at the peak of his career. Many political pundits in New Delhi could see a pattern the way Montek Singh is being ”˜groomed’ by his mentor Manmohan Singh and Congress Party chief Sonia Gandhi. He could continue to play stellar role when Rahul Gandhi takes over the reins.

While the Delhi-born has been busy making his mark not only managing Indian economy but also on the international level, he has been more than well-complimented by his wife Isher Judge Ahluwalia who is also a well-known economist in India.

Ishar Judge Ahluwalia, who holds a PhD from world-renowned Massachusetts Institute of Technology (MIT), is currently Chairperson of Indian Council for Research on International Economic Relations (ICRIER).

Short URL: