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Second generation reformists pass baton to the third generation

Team Inclusion

L to R: Sameer Kochhar, Shankar Acharya, Jayant Sinha, Yashwant Sinha, Vijay Kelkar, N K Singh and Manisha Kochhar.

India is promising an ambitious third generation economic and governance reform. For all of us who want to see a richer, freer and more confident India, we can only hope that they succeed and not lose steam. The change of government in 2014 has brought about a new wave of optimism, rising from the belief that the moment for India to make better progress on the kind of reforms that the country needs — and deserves — has finally arrived. 

The 39th Skoch summit held in New Delhi on 20th-21st March, provided a rare opportunity for second generation reformists to pass the baton to the third generation. At the concluding day of the event, when the principal architect of the second generation reforms,  two-time Finance Minister Yashwant Sinha, received the Skoch Lifetime Achievement Award, we saw a confluence of ideas that illuminated the path that the country has traversed thus far, and prescribed what the broad contours of the next level of reforms should be. 

Apart from Sinha, noted economists N K Singh, Vijay L Kelkar and Shankar Acharya – all of whom were the former Finance Minister’s colleagues at one time or another during his long years of government service -- reminisced on the vision that illuminated the path of early reforms and the formidable challenges that they had to brave. Minister of State for Finance Jayant Sinha, the Guest of Honour at the function, elaborated on the momentum that the third generation of reforms is gaining, while admitting that the opportunity and challenges of carrying the baton of economic reforms forward from a person of his father’s stature touches him at a personal level as well.

Accepting the Award, Yashwant Sinha said, gone are the days when a generalist could fit the bill as Finance Minister. “It’s a very demanding job. You are compelled to learn as you go along. You not only need to consult the experts, but you have to build your own expertise. In order to make those policies people-oriented, first of all you need to know the people.” he said, underlining that a successful politician is the one who remains firmly rooted in the grassroots.

He said as any Finance Minister post-economic liberalisation would aver, that it was not always possible to make popular decisions. But it’s very wrong on the part of any government to seek popularity. “I credit all the Finance Ministers of India after 1991 for showing the courage to take very difficult decisions that were sometimes unpopular. All of them paid the price, and lost elections. It has always been very, very difficult to get re-elected if you were a Finance Minister,” he said, adding that despite the odds, the reforms process should continue.

Jayant Sinha underlined the Modi government’s sharp focus on forging not just a strong and competitive, but also a smart and innovative economy. “This is what we mean by the next generation of Swadeshi reforms. An economy that is creative in all respects – strong and smart; competitive and innovative; and, relying on the inherent strengths of India, while welcoming foreign investment and fresh ideas,” he added. He said catalysing competitive federalism, global competitiveness, infrastructural development, and innovation are the four important facets of the third generation reforms the government intents on advancing. 

Vijay Kelkar said that one his greatest achievements in government service was working with Yashwant Sinha in the Finance Ministry. “He was incredibly successful in crisis management. He navigated the country to achieve economic growth and stability, even when a series of crisis hit the nation while he was Finance Minister from 1998 to 2002. We tackled the Western sanctions after Pokhran-II, the East Asian crisis and the UTI crisis. Observing him from close quarters, I learnt how crisis should be handled.” Kelkar said Sinha was also an institution-builder. “The Competition Commission of India and the National Statistical Commission owe their existence to Sinha’s vision of a modern, data and knowledge-driven, competitive and creative economy.”

N K Singh said that the seeds of some of the more audacious ideas with which India is still grappling with were planted in the budgets presented by Yashwant Sinha. “He had the audacity in one of his budgets to speak openly about labour reforms. At that time, the political will was flagging to undertake labour reforms. This has now become imperative for India to be able become a manufacturing hub. In one of his budget speeches, he spoke about the need for equity in PSU banks to be brought down to no more than 26 per cent. Had this been done, the huge problem today of recapitalisation of tier I capital of the banks to meet the daunting challenge of Basel III norms would have been hugely abated. The third area of unfinished reforms lies in indirect taxation reforms, especially GST. The movement towards a central VAT and GST was embedded in the far-reaching changes Sinha had introduced,” he added.

Acharya said that the different faces of reforms carried out under Yashwant Sinha’s leadership in the Finance Ministry were extensive and deep. They covered all aspects of opening up to the world which continued contrary to what a lot of people perhaps had expected,” Acharya said. He cited sustained reductions in import duties, capital market reforms, the new telecom policy without which there would have been no telecom revolution that we have seen over the last 15 years, the road building programme under the National Highways Project, the cleaning of excise duty rates, reduction in the rates of interest on small-saving instruments, the ushering in of VAT, privatisation or strategic disinvestment and the fiscal responsibility law as some of Sinha’s signal achievements. 

Karan Bajwa, Managing Director of Microsoft Corporation (India) said: “The digital divide is a huge problem. With technology becoming central to everything that we do,  India cannot afford to leave large sections of its population on the wrong side of the digital divide. Technology can address the information asymmetry that we have, empowering people in a way that puts power in their hands. Last-mile connectivity and finite computing that sits in the cloud are two pillars that can transform the country and make financial inclusion a reality,” he said.

Neelam Dhawan, Managing Director, HP India, observed that Yashwant Sinha raised India’s visibility in the global arena. “IT and IT-enabled services and industry greatly benefited from his policies and thanks to them, they could expand their global footprint. The foundation of manufacturing actually was laid in that era because of the uniformity in indirect taxes that he brought about. In fact, even the foundation of a modern IT and manufacturing sector was laid during that era,” she said.

Sameer Kochhar, Chairman, Skoch Group, said on behalf of a grateful nation, civil society and industry, it was indeed a privilege for him to confer the Award on Yashwant Sinha. “Because of the reforms and opportunities that opened up, many of our countrymen like me could rise up in life. I am eternally grateful to those, like Yashwant Sinha, who orchestrated the reforms that brought millions and millions of people of India to a better and rewarding life,” he said.

(Comments are welcome at info@skoch.in)

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