Tuesday, August 27, 2013

Chidambaram's plight

India's Finance Minister must be having sleepless nights, his brave statements notwithstanding. All said and done, economic management is a game of musical chairs. If you are in charge when the economy goes for a toss, the blame is on you although you might have skillfully mitigated the adverse consequences of economic downturn. In the other extreme situation, if the economy prospers despite one's lack of any special skills, the minister's stock goes up.

There is no doubt that Chidambaram is adroit. Initially he noted wrongly (deliberately?) that India's present mess was made in USA or rather precipitated by our interpretation of what the Fed Chairman was saying. Now he has concluded that we have also contributed to our crisis. When he says that the economic decisions which we took in 2009-11 (he could have added 'the economic decisions which we failed to take in 2009-11') are partly responsible, he is only stating the obvious.

One may wonder why Chidambaram is more uncomfortable now than Manmohan Singh was (when Singh was Finance Minister) in the crucial year 1991. Singh was fortunate to have a shrewd Prime Minister in Narasimha Rao. Chidambaram is not so lucky. PC is also constrained by economically unwise commands from Sonia Gandhi. Incidentally, Manmohan Singh would not have been sleep-deprived even at the height of 1991 crisis as he is normally asleep even at the wheel.

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