A Swamy on the loose

As Subramanian Swamy pours venom on RBI Governor Rajan, a baffled corporate India looks on. Will the government brush him aside and allow Rajan to continue? Or will they use this as a chance to bring in a more pliable economist?

It is customary in Indian homes to call the ‘Swamy’ if the family has been passing through a bad patch or, for that matter, to offer a thank-you prayer to the Almighty. The ‘Swamy’, also respectfully called Panditji by some, is the priest who oversees rituals for the well-being of the family.

A few of them attained such popularity due to various local socio-religious issues, that they got elected to parliament as members of the ruling Bharatiya Janata Party (BJP). In the last two years of the party’s rule, these Swamys have played a role in shaping the image of the government.

Some of them have excelled in articulating the interests that they represent in parliament. If one has made absurd remarks about how citizens should leave the country if they were not born in the majority community, a woman monk had termed those not born in the majority community as illegitimate.

At one point it appeared they were competing in seeking attention to deliver bizarre opinions on every issue until a couple of senior ministers intervened to shut these motormouths in the wake of negative global vibes on the economic front. They do keep breaking their silence once in a while but they have been generally quiet since the party lost the Delhi and Bihar assembly elections last year.

Raghuram-Rajan

Reserve Bank of India Governor Raghuram Rajan

It is a strange coincidence that a short gap after the religious Swamys went silent, another Swamy has begun to hog headlines in recent weeks. This Swamy has done some sort of a pole vault to land up as a member of the upper house of parliament after being ignored by the current dispensation since it came to power. Subramanian Swamy is no novice.

For the generation which was just about getting out of college soon after the Emergency was lifted in 1977, Swamy became a kind of a hero for having dared the powers that be then. During the peak of the Emergency, when civil liberties were taken away, and a warrant of arrest was out for him, he had the temerity to sneak into the same upper house to make his presence felt and vanish into thin air.

An economist, who has taught at Harvard as well as at the Indian Institute of Technology (IIT), Swamy believes that he, alone, would make the best prime minister for this country. That is the impression that those who have known him well have got. But, in the public domain he is known as a maverick who has got away with his acerbic comments about whosoever he has chosen to target. He has done this umpteen number of times throughout his political career.

But now, even his friends are as befuddled as the corporate and financial world at his latest target: Raghuram Rajan, Governor of the country’s central bank, the Reserve Bank of India, who has become one of the most popular economists to occupy that position. Rajan is the man who predicted, three years earlier, the Asian economic crisis of 2008. His paper was described as ‘misguided’ by the then US treasury secretary Lawrence Summers.

But when the crisis hit, everyone realised that the International Monetary Fund’s (IMF) chief economist had spoken a lot of sense on averting risks. But, Swamy has a plethora of professional complaints against Rajan and, as is his wont, personalised it all as well. Swamy finds Rajan ‘mentally not fully Indian’ because he tries to preserve his Green Card by flying out every year to the US.

(For the record, Rajan is on-leave Professor of Finance at the University of Chicago Booth School of Economics). Swamy goes a step further to say that there is a ‘deliberate attempt to wreck the Indian economy’ on the part of Rajan. He holds Rajan responsible for not controlling food inflation when drought and shortage of pulses are issues that need to be tackled by the federal government.

Again, Swamy believes Rajan had deliberately kept the interest rates high so that jobs were not created, although employment generation is the responsibility of the government. There is no doubt Rajan is more outspoken than his predecessors on many issues. He has come across as a man who has been honest about putting things in the correct perspective. Like he made the point that in the current situation when the economies of many nations were looking downwards, India was faring better.

However, this should not make India behave like the proverbial ‘in the land of the blind, the one-eyed man is king’. To him, India was a different country which cannot be emulating China in the manufacturing sector. This contradicted the Prime Minister’s pet programme titled ‘Make in India’. And that the public sector banks should not be used to further the political agenda of governments by duplicating the accounts of the underprivileged.

The targeting of Rajan has surprised even the common people enough for them to launch a virtual campaign for extension of his term when it expires in September. But, Swamy’s attack on him has raised several questions about the way the current dispensation functions. On the face of it, it appears to be a strategy to create a situation by which the central bank governor gets fed up by the humiliation heaped on him and resigns so that a more pliable economist might take over.

It would also be wrong to infer that it is Swamy’s personal agenda. Given the nature of Rajan’s background and his publicly stated views on both economics and other issues, it is fairly clear that a section of the ruling establishment in the mother organisation, the Rashtriya Swayamsevak Sangh (RSS), would prefer a new face in his place. This section is obviously at loggerheads with the small section which wants his continuity to complete the process of structural reforms in the banking sector that Rajan has begun.

As long as the BJP’s first prime minister Atal Bihari Vajpayee was at the helm, Swamy was forced to be in the sidelines. His closeness to the RSS, notwithstanding. The question is whether Prime Minister Modi will push aside Swamy’s views like Vajpayee did and take a stand on a man who, many believe, has given the Indian economy a more credible image in these troubled times, globally, because of his reputation.

A blot on democracy

One institution after another appears to be acting tough on the havoc the political class is heaping on the people in pursuit of power. It is quite unprecedented that the Election Commission of India should withdraw its election notification on the explicit ground of political parties bribing voters.

The commission had, in the first instance, decided not to hold elections to the Thanjavur and Aravakurichi constituencies in the southern state of Tamil Nadu on May 16. It postponed it to May 23 and, subsequently, to June 13. On each of the occasions, the commission felt that the situation had gone from ‘vitiating effect’ to the absence of a sobering effect in the constituencies.

It has decided to ignore the order of the Madras High Court as well and has even expressed its displeasure at the state governor asking it to hold elections by June one. Clearly, the commission is in no mood to tolerate the manner in which money has been distributed by both the All India Anna Dravida Munnetra Kazhagam (AIADMK) and the Dravida Munnetra Kazhagam (DMK) to the voters. The amount ranges from R2,000 to R5,000 and this is apart from other gifts.

It has also come to believe that the R83mn seized is only the ‘tip of the iceberg’. If the amount seized in these constituencies is any indication, then the total amount expended during the election to the 234 seats should have been humongous. The commission was able to seize over R1bn from various constituencies in the state before polling took place a fortnight ago. Clearly, corruption in a democratic process is as antinational an activity as a terrorist activity.

Indeed, there was a case a few years ago when an armed terrorist had bribed officials to get fake certificates so that he could create a local identify and move into government establishments for terrorist activities. Why the officials were not booked under laws enshrined for waging war against the state is still baffling. But it proved that corruption is an anti-national activity. A similar norm should be applicable to the political parties which indulge in such activities.

Tailpiece

A number of eyebrows are being raised after the Chief Minister of the southern state of Kerala, Pinarayi Vijayan, said that he would consider a public-private partnership model for expanding the railway network in his state. People have obviously forgotten that as state secretary of his Communist Party of India-Marxist, Vijayan was instrumental in thinking differently, as compared to other Communist leaders, and launching a television channel.

The channel belongs to the party and when he did implement his decision everyone was as equally wonderstruck as when he agreed with federal Finance Minister Arun Jaitley’s proposal for a public-private partnership for a railways project. For some strange reason, people seem to forget that Communists also change.

Of course, one needs to qualify the earlier statement with, sometimes. There are many times when they take two steps forward and one step backward.

[The views and opinions expressed in this column are solely those of the author and do not necessarily represent those of Muscat Daily or Apex Press & Publishing]

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