FROM BUSINESS WORLD OF 9 NOVEMBER 2005
Time for a reshuffle
The mention of Natwar Singh as a non-contractual beneficiary of Saddam Hussein’s multiple enrichment programme may be an error. After all, there are many Natwar Singhs; some of them may even have a son named Jagat Singh. It may also happen that someone intercepted the benefits intended for Narwar Singh without his knowledge. No one should be condemned without proper process – a process that the government has initiated with the appointment of Virendra Dayal as fact collector.
But it is also clear that until – unless – his name is finally and unequivocally cleared, his effectiveness as minister of external affairs will be severely constrained on three grounds. First, the world would give more credence to the Volcker Report than to Natwar Singh’s denials. It would prejudge him; wherever he goes, Natwar Singh will be branded as Saddam Hussein’s beneficiary. Second, this image of his will be particularly damaging in our relations with the United States, which are currently at a critical stage. The Prime Minister set in motion a strategic congruence between India and the US; he cannot afford to jeopardize it on account of a crippled foreign minister. And finally – and there are some signs of it already – Natwar Singh may try to grow roots in his job by reverting to the anti-US line that was his life-long speciality – though not his alone.
The leading candidate for Natwar Singh’s position must be Pranab Mukherjee. He is as senior as Natwar Singh; he has been minister of external affairs. The only reason why he did not get the ministry last year was that Natwar Singh’s tenure in the foreign service was seen to qualify him for the job; he had qualifications for none other, although that is hardly a disqualification for any ministerial post in our system. Pranab Mukherjee would also be keen to move from defence to external affairs, and would not doubt press his case to the PM and Sonia Gandhi in the most presentable form.
However, the PM should see this not just as an unavoidable chore, but as an opportunity. The government was formed last year in a hurry, and was inevitably based on untidy political compromise. Now the PM has seventeen months’ experience, not only of the performance of various ministers, but of the relative weight of his political partners.
As to performance, it must be his perception as it is outside that P Chidambaram has not somehow lived up to his considerable acumen and reputation. His second budget, which he had ample time to prepare, was not much to write home about; on the contrary, his innovations, namely the taxes on cash withdrawals and deemed employee benefits, were unnecessary and deeply resented by their victims. For the rest, he has been benignly inactive, whether it be in respect of banking reforms or the capital market.
Mr Chidambaram may actually do well as foreign minister. His training is just right for the minutiae of international negotiations. He has a presence, and his mastery of English would make him effective in international fora. And he is probably more in tune with the PM’s thinking on foreign policy – on the realignment away from defunct non-alignment.
His transfer to external affairs would leave the PM with the question of whom he should make finance minister. There will be many candidates amongst Congress heavyweights; but luckily, the case of none is strong. The last Congress finance minister was the PM himself, and all before him is history. So he has pretty much a free hand.
Instead of rewarding an old horse from the Congress, he should for once follow his heart and appoint someone whose economic expertise he trusts. Of such there are two. There is Montek Singh Ahluwalia, who was the PM’s right-hand man in the finance minister and who continues to be his close associate. And there is C Rangarajan, whom he appointed Governor of Reserve Bank and who is now his informal economic adviser. Ahluwalia may well be his preferred choice; he would run the finance ministry with competence, and would serve the PM’s interests without burdening him with details. Rangarajan, on the other hand, has a reputation of his own; so much so that when his own chosen ministers did not perform too well, PM Vajpayee had seriously considered appointing Rangarajan as finance minister. Ahluwalia may make a brilliance finance minister, but Rangarajan has the kind of distinction that might make him more acceptable to the political establishment.
On both these candidates the PM would know his own mind very well and can do without outside advice. Being a cautious player, he may well hesitate to force his choice upon his party. But he should consider how Narasimha Rao brought him out of retirement and changed India’s future. He has the same opportunity 14 years later; he should not miss it.