Saturday, August 17, 2013

Manmohan Singh--UPA I AND UPA II

PM Manmohan Singh's Independence Day speeches: UPA-1 delivers, but UPA-2 meanders--ET 18th August 2013

On Thursday, prime minister ManmohanSingh delivered what is possibly his last Independence Day speech — there is no certainty because of his recent ambiguous statement of seeking another term — from the ramparts of the Red Fort. Singh has always been a man of few words, tone deaf to calls to speak more often. So his speech on August 15, even with the sense of occasion, gains an extra measure of importance. But the speech was, to put it charitably, flat.

Singh cannot be faulted for not trying though. He finally, after nine long years, remembered his mentor PV Narasimha Rao who was PM when he delivered his famous budget speechon July 24, 1991, heralding India's economic liberalisation. (That, by the way, remains arguably Singh's only spirited speech. Remember how he paraphrased in parliament Victor Hugo: "No power on earth can stop an idea whose time has come"?) Singh acknowledged on Thursday he was able to successfully negotiate a major economic crisis in the 1990s thanks to Rao's leadership. The Congress suffers from amnesia when it comes to Rao.

India again faces a crisis, many say we are again stuck at 1991, and Singh got a chance to return to his pet subject: growth. Maybe he had no choice because of fears that growth may slip below 5%. Even so, Singh resorted to smart math: averaging the past nine years to show an impressive growth figure of 7.9%, the highest in any decade. We will soon know how the electorate has received this interpretation.

Here, we compare the agenda he set in the first Independence Day speech of UPA 1 (2004) with the results he talked about in the last one of that government (2008); and similarly the first Independence Day address of UPA 2 (2009) with the one he delivered on Thursday.

The agenda of PM Manmohan Singh 10 Independence Day speeches
The agenda of PM Manmohan Singh 10 Independence Day speeches

Growth story intact, says Chidambaram--


India’s growth story is intact, said Union Finance Minister P. Chidambaram, even as he acknowledged that there was need for faster growth.
There is hardly any reason for anyone to believe the argument that suggests there was no growth in the country. The Government is spending a lot of money on developing infrastructure across the country and encouraging banks to fund such projects, Chidambaram said.


Inaugurating three bank branches on Saturday here in Sivaganga District, he said only “those who cannot see and hear, are saying that there was no growth in the country”.
The Minister opened the 3,000th branch of Indian Overseas Bank and two branches of State Bank of India in three villages in the district.
He said, the banks are seeing higher transactions with incremental deposits and advances, which clearly prove that there has been growth. “However, I can accept that we need to grow more. We need to grow at a faster clip.”


He also reiterated that the banks should comply with the Government’s policy in terms of reaching banking services to every nook and corner of this country to support inclusive growth.

“The Government and the banks cannot have different policies,” he said.

Manmohan, Subbarao spar over RBI's policies -Times of India
NEW DELHI: Tensions between the government and outgoing RBI governor D Subbarao came out in the open on Saturday as Prime Minister Manmohan Singh called for "fresh thinking" on macroeconomic policy and suggested the central bank narrow its focus. 

The PM on Saturday seemed to throw his weight behind finance minister P Chidambaram who has been insisting that RBI must not interpret its mandate solely in terms of inflation control and needs to be more attentive to the government's growth priorities. 

"I would venture to think the time has come when we should revisit the possibilities and limitations of monetary policy in a globalized economy, in a fiscally constrained economy," Singh said at a function to release a history of the RBI, where the governor was in audience. 

Interestingly, Subbarao used the occasion to stoutly rebut criticism of being insensitive to growth, saying it is "inaccurate and unfair" to contend RBI was "obsessed with inflation, oblivious to growth concerns". 

Taming inflation 

Subbarao argued that the RBI was focused on taming inflation precisely because it was bothered about growth. "There is any amount of evidence to show an environment of low and stable inflation is a necessary precondition for sustainable growth," he said. 

While Subbarao called the growth versus inflation debate an "over simplification", Singh drew on his own experience as RBI governor to stress monetary policy needed to evolve, saying a redefinition of policy goals he initiated in the 80s had proved to be relevant. 

Elaborating his thoughts, the PM said, "... macro-economic policy-making, targets and instruments, I think, is another area, where I feel fresh thinking is called for, and I sincerely hope governors of the future, particularly Dr Raghuram Rajan, will attempt to revisit some of these difficult areas." 

As slipping growth accentuated the government's political problems over the last year, the finance ministry and the RBI have found themselves increasingly at odds as the ruling coalition looked to the central bank to reduce interest rates to provide a fillip to investment. 

Subbarao, who demits office on September 4, said the view that governments are for growth and central banks are for price stability is a simplification and while he has said so earlier as well, it was significant that he chose to make the point again in the presence of the PM at Saturday's function.

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