Montek Singh Ahluwalia’s hard policy truths

In the first flush of economic reforms and India’s initial tentative acceptance of foreign investment during the mid-1990s, London-based publication Euromoney used to host a successful two-day annual conference on banking and finance. On one such occasion, the conference was inaugurated by then Union finance minister Manmohan Singh and the closing speech was reserved for the finance secretary, Montek Singh Ahluwalia. At the end of the proceedings, when Ahluwalia took to the podium, he first acknowledged that since the opening address had been delivered by his minister, he agreed with everything that his boss had said; thereafter, he proceeded to speak for about 30 minutes, without saying anything substantive.

Backstage—The Story Behind India’s High Growth Years: By Montek Singh Ahluwalia, Rupa Publications, 434 pages, ₹595.

This was quintessential Montek Singh Ahluwalia, consummate debater and dyed-in-the-wool bureaucrat who could talk for hours but, depending on the situation, not say much. This requires a special skill and disposition that values prolonged engagement over sharp or disarming candour, which privileges non-conflict over controversy. The closing remarks were also Ahluwalia’s subtle tribute to his boss and mentor, Singh, with whom he has worked closely and whose advice seems to have shaped his career and policy choices.

Gentle and civil Ahluwalia’s latest book, Backstage: The Story Behind India’s High Growth Years, reflects his professional temper. It offers a ringside view of economic policymaking at the Centre during the reform years, providing a first draft of history which attempts to describe the transformation of the Indian economy from a state-run mixed economy to a market-led structure but leaves out the heartburn and wrangling that usually accompanies such momentous changes. For example, he fails to explain the reasons behind, first, the appointment of Ashok Desai as chief consultant in the finance ministry, performing the role of chief economic adviser (CEA), and then his sudden replacement by Shankar Acharya, both equally talented economists. Delivering the Second Foundation Lecture at the Centre for Development Studies in 2013, Desai had commented rather cryptically: “Then I somehow attracted the displeasure of Singh’s favourite. A new CEA was brought in, and I was put on the shelf."

A history of economic reforms—Ahluwalia prefers to call it a “travelogue of India’s journey of economic reforms"—should also paint a clear picture of the ideological ebbs and flows accompanying all policy debates which eventually lead to a certain policy framework and an observable decision trajectory. This is critical for understanding the minds of administrators and the myriad pressures that influenced their decision-making; it is also vastly instructive for present and future policymakers. Ahluwalia locates himself squarely in the middle of the debates and discussions that preceded many of the policy decisions but regrettably provides only a brief flavour of those deliberations, snatching away the punch bowl even before the party begins.

Ahluwalia’s non-memoir is imbued with his trademark graciousness and a bureaucratic code of silence even when recounting some of the most tumultuous policy decisions. But the veil does slip on three occasions, which injects this engaging and simply-written chronicle of events with a short dose of tartness.

One, Ahluwalia’s circumspect demeanour changes visibly when he is unable—or unwilling—to pull his punches for the Left parties which had often publicly articulated their distaste for his policies. It is also believed that when the Congress wrested power from the Bharatiya Janata Party (BJP) in 2004, with help from a broad coalition of parties, the Left had resisted Ahluwalia’s induction into government. Eventually, he was appointed deputy chairman of the Planning Commission, with full cabinet rank. That must have rankled, and he lets it show, just that once: “I was struck by how little the Left in India was affected by the remarkable changes Deng Xiaoping had brought about in China by opening the economy." Interestingly, there is also a side-swipe at the BJP’s duplicity in, first, opposing multiple strands of the reforms programme, then implementing the same agenda when in power and claiming credit for it.

Two, this book is also Ahluwalia’s way of re-painting Singh back into the canvas of economic reforms as their main architect. Literature tends to favour former prime minister P.V. Narasimha Rao, under whose leadership Singh was able to roll out the economic reforms programme as finance minister. The argument goes that without Rao’s imprimatur, Singh would not have had the latitude to implement the reforms programme. Ahluwalia stands squarely in Singh’s corner and even tries to recalibrate the historical weightage allotted to him.

“Rao’s claim to be the real father of India’s economic reforms would have been unassailable if he had led from the front and pushed the Congress party and public to think afresh on the policies needed to meet contemporary challenges. This he did not do. He fully backed the economic policy changes while the crisis was raging…once the crisis was over, Rao did little to educate the public on the need for continued reform," he writes.

Yet, it is disappointing when Ahluwalia strenuously side-steps Singh’s inaction when corruption allegations and policy stasis undermined the United Progressive Alliance’s second term in Parliament, from 2009-14. Nobody questions Singh’s personal probity; but if, as Ahluwalia argues, Singh was truly the architect of economic reforms, which would have required enormous political capital and energy to translate that vision into policy action, none of that dynamism or political initiative was evident during 2009-14.

Finally, there is very little of Ahluwalia’s interactions with Prime Minister Narendra Modi, especially when he visited the Planning Commission as Gujarat’s chief minister, imploring the Soviet-style organization for a higher allocation of Central funds and development grants. That would have provided some interesting insights from a policy-administrator who has dealt with his fair share of political leaders.

Backstage tries hard to balance politesse and a restrained measure of policy honesty and comes out firmly on the side of decency. The book would have been much more interesting, and edifying, with some more policy truths.