Wednesday, June 27, 2012

No need to speculate. Prime Minister Manmohan Singh will be Finance Minister as well

Prime Minister Manmohan Singh did not waste any time. The day after Pranab Mukherjee resigned as finance minister on June 26 to contest for the office of the president, Singh had a meeting with the officials of the finance ministry, which was also attended by the Prime Minister's Office (PMO) officials On June 27.

Singh hinted quite clearly that he will be finance minister as well when he said in speech addressing the officials, "I am happy to meet all of you in a new context with me looking after the Finance Portfolio once again. Apart from a brief spell in 2008, I have been away from the details and nitty-gritty of Finance for a long time."

The economist prime minister has given a clear indication that he intends to integrate the finance ministry into the general decision-making of the government. He told the ministry officials, "Therefore, I depend on all of you to give me sound advice on not just matters relating to the Finance Ministry but all aspects of the government and the economy as a whole."

The next two years by this reckoning would be more or less dominated by Singh's sole agenda -- of reviving the economy. It is a different story whether he will succeed in doing so. But there is no doubt that he is determined to do so.

The prime minister was quite frank in articulating his anxieties. He said: "On the external front, I am concerned about the way the exchange rate is going. Investor sentiment is down and capital flows are drying up."

The other issue that seems to be bothering Singh is something on the tax front, though he has not specified anything in particular. "There are problems on the tax front which need to be addressed," is all that he would say.

He has also mentioned the Mutual Funds sector and the insurance sector. "There are issued about the Mutual Fund industry which need to be resolved. The insurance sector has seen a slowing down which is not normal in a country with large unmet insurance needs."

Here is a doctor consulting with his team of doctors about a crisis situation, trying to identify problems and looking for ways of meeting them. Singh is showing rare initiative and energy, and he is letting it be known that he is up and about his job.

This agility and sense of urgency is something that has not been ever noticed with Singh. He might have gone about this way when he was finance minister in 1991. But it was not in the public eye. As prime minister he is making to visible that he is acting, and trying to throw off the allegation that his government is suffering from "policy paralysis". 


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