Event Reports

Reforms can’t be outsourced to bureaucrats, says Jairam Ramesh

The responsibility for bringing in reforms and change cannot be outsourced to bureaucrats and technocrats as reforms, in essence, is a political enterprise, says former union minister and senior Congress leader Mr. Jairam Ramesh.

2015
Oct
19

The responsibility for bringing in reforms and change cannot be outsourced to bureaucrats and technocrats because reforms, in essence, are a political enterprise, according to former union minister and senior Congress leader Jairam Ramesh.

Ramesh made this observation while initiating a discussion on his new book, “To the Brink and Back: India’s 1991 Story”, at Observer Research Foundation in Kolkata on October 9, 2015. He also released the ORF Occasional Paper “India’s FTAs with East and SE Asia: Impact of India-Malaysia CECA on the Edible Oil Value Chain” authored by Nilanjan Ghosh, Avishek Konar and Sriparna Pathak.

Ramesh said the process of economic reforms, initiated in the country by Manmohan Singh in 1991 as the Finance Minister, holds several lessons. The foremost of them is the fact that political leadership, political action and political communication are indispensable to facilitate changes. He recalled how Singh prioritised his political role over and above his academic training in economics in the process of facilitating reforms.

The second lesson was that building a large constituent for change is absolutely essential. There is no substitute to having a wider ownership of change. Organisations like ORF were instrumental in developing wide consensus for change. Ramesh has mentioned in the book how a ‘statement of four’ was received from ORF which was later deliberated upon in the Parliament and made into the draft reform. According to Ramesh, compromise is an essential process of consensus. To this end, the original document was rigorously debated upon by representatives from the Parliament, civil society, trade unions, etc. despite having differences of opinion in each of these sectors.

The third important realisation was that the world wanted India to succeed and also appreciated the country’s unused potential. The International Monetary Fund (IMF) had no intention to keep India in permanent bondage. The then Prime Minister, late P.V. Narasimha Rao, and Singh were prudent to turn the crisis into an opportunity and make the best of the international help granted then, said Ramesh.

He said the background of the reform is reflected in the very title, “Brink and back…”. He recalled the 1991 predicament when India was on the brink of default. The then minority government under Narasimha Rao launched the economic reform which was a combination of fiscal, industrial and trade policies. Since then, the broad trajectory of the Indian economy based on reforms has not undergone significant changes, added Ramesh. The successive governments of diverse parties have not questioned the foundational basis of the reforms. Thus, over the years the liberalised Indian economy could ensure consensus and durability in its course of journey.

He said the reliability of facts produced in the book and the participant’s account were two key elements that set the book apart from other memoirs. “It was a participant’s observations and not a researcher’s. It is replete with personal accounts and anecdote, giving it a narrative style intelligible to diverse readers” he noted. At the same time, although the book is not a researcher’s account, it is based on primary documents which he had collected and archived since the days preceding reform.

Ramesh said the prime inspiration for writing this book was his pursuit of intellectual vacuum and his own personal association with the process of bringing about economic reforms in 1991. He said, after the Congress’s defeat in the last general election, he could take out time to pen down his experience in ushering in economic reforms and how it faired in ensuing years. He was confident that the book has made a fair assessment of the times, the role-players and the whole process of economic reforms in India.

The event was chaired by Ashok Dhar, Director, ORF Kolkata. The discussants were Anup Sinha, Professor of Economics, Indian Institute of Management, Calcutta and Ghosh, Senior Fellow, ORF and Senior Economic Advisor of WWF India.

Appreciating the book’s narrative style and cross-disciplinary appeal, Sinha recalled the difficult times in which decision to reform Indian economy was taken in 1991. He highlighted the then global situation which was coming to terms with Soviet Union collapse. There was a new found interest in market economy and the fabrics of society were undergoing major changes. In India, there was a whirlwind of political change too. Coalition governments had started taking root which were to rein the Indian political scenario for over a decade to come. He gave credit to Narasimha Rao for steering a minority government through the major economic changes.

Sinha also reminisced the meeting arranged in 1991 by ORF at the IIM Calcutta where he was present as a new faculty member. He recalled the massive participation and the diverse panel with experts from all political, intellectual and partisan hues. This had later made the Calcutta as a cynosure of bureaucrats and technocrats at seats of power in Delhi to gain alternative voices and opinions on the newly ushered in concept of liberalisation-privatisation-globalisation.

Sinha poised three important inquiries relating to the book. His first point of inquiry was whether the economic reforms marked a sharp regime change or was this just a continuity from past? Second, whether the reform was a political outcome or arm twisting by IMF. Finally, how far have the reforms been implemented successfully in following years?

Ramesh said the economic reforms essentially meant sharp regime change but it was reflected as continuity, a later stage of development. It was an autonomous change brought about by political leadership without any provocation from IMF. Making an assessment of the reforms, he felt that while the industrial and trade policies have met with success, the fiscal policy has not.

Ghosh said this volume is a rare first-hand account on the very crucial role of the “unsung hero” Narsimha Rao in the economic reforms of 1991. He felt that this volume, whose central characters were Narsimha Rao and Singh, could have well been titled as Two Horsemen of New Apocalypse. This is because these two ‘horsemen’ were the main drivers of reforms. Their initiatives, through policy decisions and consensus building, saved the economy from the ‘apocalypse.’ He appreciated the process of reform as a political reinforcement. He stressed on the need for institutional mechanisms for the implementation of economic policies. According to him, the biggest lesson from this volume lay in the fact that the success of governance and polity lay in conciliation and consensus building.

The main event was followed by a question answer session, moderated by Dhar. The event was well-attended with lively participation of academicians, representatives from the corporate sector, Consul Generals (of Nepal, Germany, and Sri Lanka), the media, scientists from CSIR and others. .

Report prepared by Avishek Konar, Associate Fellow and Swagata Saha, Research Assistant, ORF Kolkata