POISED on the brink of power, the BJP is faced with many hard choices. Easily the hardest of them is to find a finance minister to balance the party's nationalist approach with the global identity India Inc is struggling to forge. The shortlist of candidates shows that the party is even more uncertain about the incumbent than the Indian electorate has been about its representatives. And the confusion is least to do with the unexpected defeat of Jaswant Singh, the liberal financial face of the party and finance minister in its 13-day government.
To be fair, between Murli Manohar Joshi, Yashwant Sinha and C. Rangarajan, who comprise the shortlist, the BJP has as diverse a choice as between, in its own words, potato chips and computer chips. And their suitability hinges directly on what the party considers its prime concern. Is it to keep the loyalists happy, to comfort the general public and industry, or to press ahead with economic reforms? Ask an economist or a seasoned industry man and he'd immediately plump for the last. He'd probably supply the answer too: the man who had the longest and the best innings at the Central Bank pursuing liberal monetary policy, better banking and lower inflation. Unfortunately for the country and the BJP, Dr Rangarajan is in no mood to relinquish the Andhra Pradesh governorship and his other scholastic pursuits (see box). And the current state of the economy cries out for hard decisions, not compromises.
Certainly not pamphleteerism. The problem with the BJP is it has too many people with it who're still nursing their 1977 wounds, without realising that the economy has moved far ahead. Like George Fernandes who, presumably egged on by the whiffs of power, said how happy he'd be to see foreign corporate giants pack their bags out of India. Although industry was too peeved to react, Fernandes' isn't the lone voice. How comfortable, for instance, will industry be with M.M. Joshi, the man who wrote his PhD thesis in nuclear physics in the rashtrabhasha and has made a fetish out of his penchant for all things 'swadeshi'? His is the brain behind deciding the party's policy on WTO, science and technology and intellectual property rights. But will even the Bombay Club, which has seen India's share in global trade dwindling to a pitiful fraction, fete him for his tirade against the WTO being a handmaiden of the US?
The pivot of Joshi's economic philosophy is "higher savings". A fact amply reflected in BJP's election manifesto where a 30 per cent savings rate is expected to take care of all our fiscal problems plus generate adequate resources for government investment in infrastructure and social sectors. The flaw in this argument is that not only does it ignore foreign investment as a major resource but presumes households to be able to save in the future at a rate even higher than the current 24 per cent. Secondly, luring households away from the market can only be achieved at a great cost of money,which will probably hit the government the hardest. Perhaps the thinktank is expecting to achieve the growth out of "the pruning of government dissavings", that is, major public sector disinvestment.
There is some consolation in the fact that while the hardliners in the party may want Dr Joshi and might eventually sway A.B. Vajpayee to their fold, there's an equal number who would put their money behind Yashwant Sinha. Sinha was the ill-starred finance minister in the Chandra Shekhar government in 1990 when the RBI had to trade gold for reserves. To compound his woes, Rajiv Gandhi's Congress had pulled out support a few days before he was to present a full budget. Like the BJP, he's waiting long in the wings. He may not be a visionary economist, but as an able bureaucrat he just might succeed in cutting short the administrative maze and the roadblocks that currently hinder the reforms.
But Sinha is a latecomer in the party and doesn't enjoy the trust of the RSS heavyweights. But as a representative of the liberal-minded, he might pull the party through when it needs support in pushing through policy changes. The karorrupiah question: can Sinha reconcile his earlier socialist views with the current economic compulsions and his party's manifesto that proclaims the new government "will be inheriting a badly-managed economy and badly-directed reforms process"? Or would he be content to play second fiddle as minister of state to Joshi, concerned only with execution as the cabinet minister formulates policies? In an interview with a private TV channel on March 5, he was eloquent on how the economy was "in a complete mess" but not very coherent on the solutions. Perhaps, like the manifesto, he is yet to solve the paradox of "the greater the liberalisation, the more demanding is the involvement of the government to protect national industry and employment".
