Manmohan Singh: architect of India's Global Rise and Digital Infrastructure

The author of India's economic reforms was Narasimha Rao, but Singh played vital roles in building modern India that deserve to be better recognised

Give Mamnohan Singh credit where it is due

It is conventional wisdom to hail Manmohan Singh as the author of India’s economic reforms. This is misconceived. That credit goes to PV Narasimha Rao. Only a prime minister can strategise and execute a paradigm shift in the nation’s economic policy. He would need a number of technocrats to carry out that job intelligently, and Manmohan Singh, as Rao’s finance minister led a team of able technocrats, among whom we should note the likes of Montek Singh Ahluwalia, Shankar Acharya and C Rangarjan at the Reserve Bank of India (RBI), India’s central bank. To call Manmohan Singh the author of economic reforms is like saying that contract manufacturers Foxconn and Pegatron make the iPhone, and not Apple.

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However, there are two signal achievements for which he deserves credit but he does not get it. One is India’s rise as a geopolitical player, and the other is as the architect of India’s digital infrastructure.

Wielding Delegated Authority

When the George Bush administration in the United States was willing to sign a civil nuclear agreement with India, the only person in the political class who both appreciated the full implications of the deal and was willing to stake the survival of the government on going ahead with the deal was Manmohan Singh.

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The BJP, then in the Opposition, was dead against the deal, both at the Centre and in the states, where it had powerful chief ministers. The Left, a key external supporter of the UPA government, was opposed to the nuclear deal on ‘ideological grounds’, meaning it meant cooperating with the imperialist devil, the United States. Most Congressmen would have welcomed the deal but would baulk at the thought of risking the survival of the government over the defence of the deal in the teeth of broad opposition from the rest of the political class.

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This was the only time Manmohan Singh exercised the full extent of the delegated authority he enjoyed. He stood by the deal, in the face of a vote of no confidence brought by the BJP-led Opposition. To her credit, Sonia Gandhi, then chairperson of the United Progressive Alliance (UPA), stood by Manmohan Singh, and Congress leaders scurried to mobilise support from outside the ranks of the UPA to save the government, and succeeded.

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The government survived, and the nuclear deal became a reality. US president Bush was convinced that India was the only viable candidate to emerge as a regional rival to rising China, and wanted to release India from the regime of technology denial into which the US-led western alliance had corralled India, after India’s nuclear tests. The nuclear cooperation agreement was the instrument for such technological liberation.

The US had to twist China’s arm to get that country to agree to give India a quasi-membership of the Nuclear Suppliers Group (NSG). Full membership would require India to sign on to the Nuclear Non-Proliferation Treaty (NPT), which India condemned as unequal and unacceptable. The quest for national autonomy in the face of confrontational power blocs started with Jawaharlal Nehru, the first prime minister of India, and was carried forward by all prime ministers since. Indira Gandhi gave it teeth by exploding a peaceful nuclear device in 1974 and developing nuclear arms in India, and delivering vehicles to carry them.

The Rao government postponed further testing of nuclear weapons, in the face of American pressure. The Atal Behari Vajpayee government went ahead with them in 1998, and the West clamped down with sanctions that denied India access not just to fuel for its atomic power plants but also to all kinds of dual-use technologies, including cryogenic engines for its space rockets.

The nuclear deal ended that technology apartheid. India gained admittance to the Missile Technology Control Regime, the Wassenaar Arrangement on control of dual-use technologies and the Australia group on chemical weapons and their precursor chemicals.

Of course, the US can, in theory, still restrict the export of sensitive technologies and equipment to India, including those related to the manufacture of advanced semiconductors. Hence the imperative to acquire self-reliance in this area as well. It can be achieved not by subsidising foreign chipmakers to set up shop in India, as India’s current policy seeks, but by putting together and funding a variety of startups to design chips, chipmaking equipment and components, gases and chemicals used in chipmaking.

Following the Indo-US nuclear deal, India attracted investment and sourcing from the likes of Boeing, American companies receiving the signal that India is considered a partner country by the US. This also helped Indian IT companies extend their reach into corporate America.

The Rao government quickly adapted to the post-Soviet policy, forged the Look East policy, and started military drills with the US in 1992. These were expanded in 2007, to include Japan and Australia by the UPA government.

In 2008, when President Bush convened a summit of the largest 20 economies, in the wake of the Global Financial Crisis, Singh not only represented India but also deployed his knowledge of economics and central banking to fashion a global policy response. India joined the big league, in terms of economic size and formal recognition by the rest of the world.

Under Singh, India achieved the highest-ever decadal compound growth rate. Not only was growth fast, it was more participatory as well. Rural wages, adjusted for inflation, went up for six straight years over 2008-14, sharply slashing poverty.

Digital Innovation

The National Payments Corporation was set up in 2008, largely as an initiative of the RBI. But it was Manmohan Singh who invited Infosys veteran Nandan Nilekani to join the government, conceded his demand for cabinet rank, and encouraged him to refashion an ongoing, paper-based identity programme into a nationwide, digital, biometrics-based national identity programme. Without Singh’s backing, there would have been no Aadhaar, no India Stack, no UPI, no DigiYatra.

There were the usual turf battles between various government departments and ministries over Aadhaar. Singh, as prime minister, was able to manage these conflicts and allow Aadhaar to roll out.

While the UPA government is widely believed to be culpable of a huge telecom scam, the expansion of telecom licences without upfront payment of huge licence and spectrum fees allowed telecom to spread in India. From under 2% in rural India, teledensity soared to more than 50% in rural India under the first five years of UPA rule, laying the foundation for not only digital banking but also of high-speed data networks that underpinned the business outsourcing explosion in India.

Let us hail Manmohan Singh as the architect of India as a rising strategic power and as a world-leading champion of digital innovation and inclusion.