Respected Finance Minister
Who knows what tomorrow may bring for you?
Apparently well networked ‘knowledgeable’ folks of
New Delhi — and there are many who claim to be so,
as they invariably must — are unanimously asserting
that you are a shoo-in to being the tenant of a very
large palace and, thus, to what must be the most
boring job in India. There are perks, no doubt:
official banquets, innumerable liveried chaps
scurrying everywhere, a personal plane for many free
trips to wondrous far off lands, working on
perfecting the salute and learning how to look
serious while reciting boring, often untrue,
speeches of the government on all important
Is that what you really want? A job that you will
happily and graciously accept as the final
‘pinnacle’ of your long career? Worked long enough,
and now it is time to chill?
I don’t know you, so I can hardly be sure. But
something tells me that sitting as an ornate
constitutional head is not you. It may be true that
the job that you might have really wanted is not to
be had. But I can’t believe that being Smt. Pratibha
Patil’s successor is a worthy second prize for a
person who is known to be the hardest working,
multi-tasking minister as well as the most networked
and respected politician within the United
Progressive Alliance. By a long shot.
Besides, even if you secretly desire the post, may I
humbly suggest that the nation cannot afford to have
to ‘promoted’ to the Rashtrapati Bhavan? Here is
brief résumé of our various ills — all of which seem
to have come together to create a perfect storm.
• India has witnessed eight successive quarters of
declining GDP growth — from 9.4 per cent in
January-March 2010 to 6.1 per cent in
October-December 2011. On an annual basis, GDP
growth has fallen 1.5 percentage points from 8.4 per
cent in 2010-11 to 6.9 per cent in 2011-12.
• The Twelfth Five Year Plan Approach Paper says
that 9 per cent growth needs gross fixed capital
formation (GFCF) at no less than 33.5 per cent of
GDP. Unfortunately, GFCF has fallen to 30 per cent
of GDP in October-December 2011. Growth in GFCF,
compared to the same quarter of the previous year,
has dropped from 11.1 per cent in October-December
2010 to -4 per cent in July-September 2011 and then
to -1.2 per cent in October-December 2011.
• As you are well aware, the fiscal deficit has
burgeoned to unsustainable levels. For 2011-12, the
central government’s fiscal deficit stood at 5.9 per
cent of GDP. Add to that 3.1 per cent on account of
the states and other ‘below line’ items, and the
consolidated deficit climbs to 9 per cent of GDP —
almost as bad as in 1990-91.
• Wholesale price inflation had reduced between
September 2011 and January 2012. Unfortunately, it
has reversed, and creeping up yet again. This,
coupled with a large budget deficit, bodes poorly
for a softer interest rate regime.
• The current account deficit now stands at 4 per
cent of GDP. Not surprisingly, therefore, between
April 2011 and mid-May 2012, the rupee has
depreciated by almost 24 per cent against the US
dollar — more than any other significant currency in
• The energy situation is grim: thermal power plants
don’t get coal, and gas based plants don’t get gas.
There is hardly any increase in coal production.
Telecoms are in a mess. The less said about railways
the better. Mines have shut down. The list of
negatives is huge. And truly alarming.
• As if that were not enough, we will soon see
another crisis with Greece exiting the Euro Zone,
whose shock waves will spread everywhere.
It is more than a perfect storm. It is mother of all
typhoons. Much of it of our own making.
As a young boy, you must have read and recited a
poem by Felicia Dorothea Hemans called Casabianca:
“The boy stood on the burning deck / Whence all but
he had fled; / The flame that lit the battle’s wreck
/ Shone round him o’er the dead.” Need I remind you
that at 76 years, you are like India’s Casabianca?
This is no time for you to leave North Block and the
innumerable Group of Minister meets that you chair
to breathe fresh air at the top of the hill.
We don’t know whether India can fix herself. But we
do know that if there is a person who could douse
the fires of a burning ship and again set course it
is you. You have a year before electoral compulsions
So, give Rashtrapati Bhavan a miss. Instead, fix the
nation — which will be far more grateful to a
minister who can solve its serious problems than a
President who recites the government’s prepared
Published: Business World, May