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In his TV speech, Prime Minister Manmohan Singh came out swinging, urging support for the tough economic measures. (Rajesh Kumar Singh/AP)
In his TV speech, Prime Minister Manmohan Singh came out swinging, urging support for the tough economic measures. (Rajesh Kumar Singh/AP)

Indian PM reclaims title of economic reformer Add to ...

On the eve of becoming an octogenarian, Manmohan Singh launched a bold attempt to get his groove back.

India’s Prime Minister has quietly endured months of parliamentary gridlock and unceasing criticism: Time magazine chastised him as an “underachiever” and The Washington Post said his political legacy was destined to be that of a “tragic figure.” Now Mr. Singh has responded with a series of reforms aimed at reviving both economic growth and his image as a vibrant and powerful leader.

For Mr. Singh, who turns 80 on Wednesday, the new plan represents what is likely a last chance to resuscitate a legacy that once saw him heralded as a founder of modern India and the politician most responsible for the country’s rapid economic ascent.

During his second term as Prime Minister, however, he has been ridiculed as the often silent leader of a Congress party government rocked by a string of corruption scandals that have cost the country billions in lost revenue. At the same time, opposition parties as well as his government’s own coalition members, have stalled parliament preventing the passing of legislation. The resulting bottleneck has worsened an already sharp economic downturn.

In a television address Friday, only his second since becoming Prime Minister in 2004, Mr. Singh, who has been characterized as quiet, shy and a poor communicator, came out swinging. He urged support for the measures aimed at reviving investor confidence in India’s troubled economy, reforms that include cutting the government’s subsidy on diesel fuel and opening up the country’s fragmented retail sector to foreign supermarket chains such as Walmart.

“I promise you that I will do everything necessary to put our country back on the path of high and inclusive growth, but I need your support,” said Mr. Singh, whose government, if it does not fall, will face off against the opposition Bharatiya Janata Party and other challengers in the next general election in 2014.

“We have much to do to protect the interests of our nation, and we must do it now. … The time has come for tough decisions,” he said.

The economic reforms, which also include a plan to sell stakes in some of India’s largest state-owned companies and allow foreign investment in the airline and broadcasting industries, have garnered widespread support from business interests, which view the measures as much-needed steps to get India’s once-booming economy back on track. The question remains, however, whether Mr. Singh and his party have the political capital to successfully implement and keep the reforms in place.

Opening up the retail sector to foreign competitors revives a plan proposed by the government last year that was quickly withdrawn in the face of political and public opposition from India’s small shopkeepers.

Last week, thousands took to the streets and participated in a one-day strike to protest against Mr. Singh’s plan. In contrast to a previous pattern of compromise, the Prime Minister refused to back down. In his TV address, delivered in English and Hindi the day after the strike, he called the concerns “completely baseless,” noting that other domestic industries such as the IT sector have prospered amid foreign competition and investment.

Any temporary hardships created by the reforms, he said, were needed to prevent a worsening of the government’s budget deficit and help put the country’s fiscal house back in order. The value of India’s currency, the rupee, has skidded sharply against other currencies amid the country’s fiscal woes and the slowing of annual economic growth to less than 6 per cent.

“Money does not grow on trees and that is why we have made these decisions,” Mr. Singh said.

The proposed reforms have splintered Mr. Singh’s government, reducing it to a minority as the Trinamool Congress and its plucky, charismatic leader, Mamata Banerjee, pulled out of the coalition last week.

In the past, threats by Ms. Banerjee that her party and its members would leave the coalition and topple the government caused Mr. Singh to give in to her demands. This time, however, he held fast. The gamble appears to have paid off as two regional parties from the state of Uttar Pradesh agreed to support the government.

Positioning himself as an economic reformer also marks a return to Mr. Singh’s past glory. A former academic and bureaucrat, he became India’s finance minister in 1991 at a time when the world’s second-most-populous country was on the brink of bankruptcy. Mr. Singh was the architect of sweeping economic reforms that opened up India’s economy and spurred a rapid rise in growth that helped create a new middle class.

As an outsider and the first Sikh to hold the office, his ascension to become Prime Minister in 2004 was seen as a surprise. Current Congress Party Leader Sonia Gandhi had, at the time, been widely expected to take on the job. Critics have accused Mr. Singh of bowing to Ms. Gandhi as the real centre of power in the party.

However, neither Ms. Gandhi nor her son, Rahul, offered public support for Mr. Singh’s reforms last week, suggesting the Prime Minister’s bold measures were his own initiative.

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