As Prime Minister Narendra Modi struggles to keep pace with an economy in free-fall—India’s GDP shrank by a whopping 23.9 per cent in the April-June quarter— what he needs is not more of finance minister Nirmala Sitharaman’s mishandling. Modi must emerge from the quicksand she has created and make lateral entry his mantra for economic rescue. Like he brought S. Jaishankar for external affairs ministry and Parameswaran Iyer for Swachh Bharat Abhiyan, the PM now needs some out-of-the-box thinking on economy — a domain expert he can pull in from outside his political setup as his finance minister.
Narendra Modi and Amit Shah know their politics well. But, they do not know economics. When the captain and vice-captain of the team don’t have a particular skill set, it becomes even more imperative for them to have a teammate who does it for them and the government. They have to, because the promise of economic growth and national security are central to Modi’s politics. Today, both lie in tatters. With China threatening India at the Line of Actual Control (LAC), Modi now needs to double down on the economic health of the nation.
And this is precisely where bringing in outside talent becomes crucial.
The contraction of India’s GDP can be blamed on the much-hated virus, but it is hard to ignore that the economy was in slowdown mode for as many as eight quarters even before the pandemic and ensuing lockdown engulfed us.
To say the Bharatiya Janata Party-led government’s bench strength is abysmal would be a euphemism. Nirmala Sitharaman’s reign as finance minister has proved to be disastrous, due to a mix of unfortunate circumstances and her lack of political and administrative acumen. But, for Modi and his voters, the complete lack of talent in his government is glaring and disconcerting, with no real candidates in his cabinet, or party, who can be thought of as possible replacements for Sitharaman.
The experiment of drawing in former seasoned diplomat S. Jaishankar as external affairs minister was bold and unexpected, but has worked quite beautifully so far. Be it the job of spreading India’s message before the international community after the abrogation of Article 370 in Kashmir or the current LAC stand-off with China, Jaishankar has made good use of his skills as a diplomat to press for India’s case. This is precisely the kind of thinking Modi needs now—to look beyond the scope of his political framework to rescue the sinking ship the Indian economy seems to have become.
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A sinking economy and no rescuer
Nirmala Sitharaman’s stint as finance minister since last May has seen a series of economic disasters. An MA in economics, who had worked in the ministry earlier as a junior minister, Sitharaman was not an odd choice. But it was perhaps the lack of a breadth of administrative and political experience that came in her way, besides having inherited an economy that was already on a downward slope. Unfortunately for her, even 15 months later, she doesn’t seem to have succeeded in inspiring much confidence among various segments of the economy, and become the face of the economic slump.
After the latest GDP data was released, hashtags like #ResignNirmala began trending on Twitter, indicating how all the anger is being directed at her. What makes it worse for her, is the crisis around the Modi government’s inability to pay states their GST dues, and unlike former Finance Minister Arun Jaitley, the absence of the skill to reach out to everyone and build consensus. Making statements like the “act of god” don’t help much either.
The issue, however, is that Nirmala Sitharaman isn’t the problem, she is just a manifestation of it. The Narendra Modi government suffers from such a lack of talent that it is hard to think of who can fill in to lead the finance ministry at this crucial, challenging juncture. The other cabinet minister who fits the bill in terms of area of expertise is Piyush Goyal, but he isn’t known to be the best administrator or consensus builder either, and has had several run-ins with people he works with.
What the government needs right now is a seasoned hand, someone with an iron-like grip over economic matters and the knack of taking even detractors along. And nobody, certainly not Sitharaman or Goyal, tick all these boxes.
Also read: India can grow at 10% but import substitution policy could hurt that, Arvind Panagariya says
The need to look outside
Narendra Modi has earned himself a sorry reputation that no economic talent can work with him. From former Reserve Bank of India Governors Raghuram Rajan and Urjit Patel to former chief economic adviser Arvind Subramanian, the list of those who opted out or were forced to leave the Modi government is longer than acceptable.
But with the economy in such shambles, Modi has to let go of this streak and show the vision to look outside his political comfort zone. When the PM took oath for the second time in 2019, he knew his options to fit in the top four cabinet posts were limited. With Arun Jaitley and Sushma Swaraj unwell, Modi had to think beyond the obvious, especially for a portfolio as critical as external affairs. S Jaishankar was an unexpected, but clever choice.
Also read: India’s economic growth has seen a consistent fall, Gods cannot be blamed for everything
The challenge in lateral entry
It isn’t usual in politics to bring in people from outside the party/ally parties to be part of the traditional government framework, or to lead a mission. There are egos to assuage, patronage to grant, people to be rewarded and political compulsions to be met. But there are times when all of these need to be set aside for the more pressing cause.
The Congress-led UPA government’s move to rope in Infosys co-founder Nandan Nilekani to head the ambitious Aadhaar project was a prudent one. Without Nilekani, who was given cabinet rank, the road to Aadhaar would have been difficult. It is the foundation he laid that has held the Modi government’s efforts to build and concretise the project in good stead.
Nilekani’s stint was also tumultuous due to all the politicking within the Congress party and resistance to an ‘outsider’ who had made a lateral entry. Modi, however, with his strong control over party affairs, will have no such problem. The BJP can keep blaming the global slowdown, or the pandemic or something else for the economic mess we find ourselves in, but it can’t run away from the fact that it has been able to do precious little to arrest the slide.
Modi, as much as his voters may continue to love him, needs to do something to rescue the economy if he doesn’t want this big, ugly blot on his tenure. He has to set aside his pride, prejudice and politics to rope in an outsider as his new finance minister. Who can that be? Well, suggestions are welcome.
Views are personal.
Disclosure: Nandan Nilekani is among the distinguished founder-investors in ThePrint. Please click here for details on investors.
Another nonsense in the article : Jaishankar is a lateral entry and a brilliant success.
The rest of the world did not accept revoking Article 370. That is why China gave India a beating. China is not backing down due to Jaishankar. The Indian army is saying there is possibility of a two front war.
Jaishankar was a RSS Hindu fascist like the rest of them, and India is paying the price.
One set of Hindus are staunch fascists. Another set are hoping there will be a silver lining in the fascist ranks. Very few Hindus call a spade a spade, and are willing to call Hindu fascism for what it is.
Pakistanis’ rant about India is like a broken record stuck in inferiority complex. You need to understand that Bangladesh with all its subjugation till 1971 is far better country than Pakistan in every conceivable aspect. The reason is quite simple – they don’t ask for parity with India (except on the cricket field, and they’re a jolly good cricketers, no wonder second best team in Asia), they know who’s the big brother here.
Wake up and stop fooling yourself by comparing with India, compare yourself with Bihar and eastern UP.
This is a confused article.
The author knows and is correct that the BJP has sunk the economy, Sitaramam is not competent and there is skill deficit in the party.
However, what is the cause of that ? It is the RSS background of these Hindus, and the need for RSS clearance.
The rest of the fault lies with the Hindu public. They chose Modi because his strident Hindu communalism appealed to him, and nothing else mattered to them. How can you expect anything better from someone who was a chai wallah with some shakha training in hate speeches and paramilitary drills ?
The article has some drivel in it like ‘They have to, because the promise of economic growth and national security are central to Modi’s politics. Today, both lie in tatters. With China threatening India at the Line of Actual Control (LAC), Modi now needs to double down on the economic health of the nation.’
The promise of economic growth was a jumla as Amit Shah readily admits. So why are you taking it seriously ? These people have no ambition but to be in power and enjoy. The means to achieve that is Hindu communalism. It worked and continues to work. National security only meant fighting with Indian Muslims (for them, that is a security threat, not China). If you fight with Indian Muslims in the ratio 9:1, with police support, Hindus will win. If you fight with China, you will get a beating.
It is time for Hindus to be objective and clear minded. The only reason they voted for Modi was Hindu communalism. The rest about development was a jumla. Accept that and the consequences that follow from selling your soul to fascists – the country and economy will go down.
I feel Nitin Gadkari ji deserve to be next FM..He is a fine n fit person to take over the post..
fine n fit person….
Gadkari is ugly and fatter than Amit Shah. What has he delivered ?
She is the proverbial scapegoat. Demonetization, faulty GST, then comes draconian lockdown. What anybody could have done?
You do not need qualifications. She is part of the Hindu communalist set-up. That is sufficient for the job – any job.
Did she raise her voice against demonetisation ? Or against Rafale scam when she was the defence minister ?
She is in that position only because she does whatever told. That is the kind of people Modi wants.
She should be pitied. She is proverbial scapegoat.
In the present situation, Dr.Subrammanian Swamy is the capable and right choice despite his revolutionary ideas coupled with transparent thinking. However, PM Modiji should shed his ego and give opportunity to Dr.Swamy to set right the low-ebb economy in the role of a FM.
Swamy fits the bill on the Hindutva extremist side alright – he freely spouts hatred of Muslims. On the economics, he talks as if he knows – and only he knows. Modi will be afraid to manage him. It is not going to happen. He is kept only for his attacks on Gandhi family and Muslims.
The economy of growth from MMS days is gone, India is going back aptly to the Hindu rate of growth, get used to it.
This guy rasagolla seems to be a traditional hardcore communist. FYI, Dr. Subramanian Swamy suggested Indira Gandhi to follow market economy. She didn’t listen and called him a Santa claus with fancy ideas. For 30 years, we grew at 3.5%. And you communists, who were the reason of this slow socialist growth rate, started calling it hindu rate of growth just for your hatred against hinduism. It was also Dr. Subramanian Swamy’s blueprints which PV Narasimha Rao gave to mms and told him do the rest of the work. After that, we grew at 7-8% until modi destroyed the economy. Please know history without commenting anything. And yes, Dr. Subramanian Swamy has a PhD from Harvard along with MSc from isi. So definitely he KNOWS. And for god’s sake, call it communist or socialist rate of growth and not hindu rate of growth. But anyways, Swamy is best for the post of FM although Modi, who will be remembered as a disaster, won’t make him FM because this country doesn’t believe in Economy as an issue for elections.
In the present situation, Dr.Subrammanian Swamy is the capable and right choice despite his revolutionary ideas coupled with transparent thinking. However, PM Modiji should shed his ego and give opportunity to Dr.Swamy to set right the low-ebb economy in the role of a FM.
Why not subramaniam Swamy? He is much better than Nirmala. Modi must definitely take a chance when the economy is struggling.
The economy is not struggling according to Modi ! India helped 140 countries out of 125 with Covid. Companies are re-locating from China to India.
First and foremost, India needs new Finance minister. But he should be a politician. Second , another FM Jayshankar is also a failure. Look at what Nepal and China doing to India! Either Modi is not aware of the economic reality ( which is not possible) or he is scared of something.
Hindus who voted for Modi did not vote for economy, they voted for Hindutva. Modi has delivered on that – beat up Muslims and Christians; promote the cow; rewrite history books; put RSS in control of all institutions.
Even Jayant Sinha who can be a smart choice both politically (Bihar elections) and economically (long technocrat experience) can be a good choice. But whosoever is selected, he/she will be required to toe Modi’s line as Modi is macroeconomist in chief and pulls out tricks like demonitisation and long severe lockdown out of his jhola.
Jayant Sinha is the one who garlanded Hindu cow lynchers. He is a criminally minded Hindu like the rest of them in the BJP.
The economic strategy definitely needs a rethink and countermeasures be acted upon accordingly.
First step is admitting there is an economic problem, if accepting makes it political suicide then at least address the underlying problems.
Apply economic model to economy not financial model. Economy is all about demand and supply. If people don’t have buying power then it won’t create demand.
The policy should focus on finding means to give buying power to aam aadmi.
Aatmanirbhar bharat is a good vision, sans the ideal environment and buying power is bound to fail.
Economic advisors in the government are doing a great disservice to the nation if they are not providing good guidance from this mess out of fear.
There is no shame in accepting talent gap and look for answers from outside experts as one cannot be master of all trades.
Fix this crisis by seeking outside expertise.
‘Fix this crisis by seeking outside expertise.’
The are taking outside expertise : they consult the RSS who gives them voodoo economics.
The country needs a new FM before it’s too late. Only a domain expert can pull the economy out from the quagmire it’s in. Two names come to mind: c. Rangarajan and Bimal Jalan.
I did not realise the economy is in a quagmire. The govt. does not think so. This is the negativism of anti-nationals.
Rangarajan and Bimal Jalan – do they have RSS clearance ?
Agree absolutely that the need of the hour is an able economic hand.
They need RSS approval. Gobar certified.
Hindus voted for Hindutva, not economy.
Why are u(others) critisice Nirmalaji for bad performance of GDP. Those who follow (not the writer of the article) Modi governance know that all Cabinet ministers are simply yes men’s of Modi, and Modi himself is a yes men for corporates to whom Modi is liable to, and also Modi is one of the worst PM mother has ever produced
Correct mostly. Cabinet is yes men to Modi.
While Modi is the yes man for the RSS.
The RSS is an extra constitutional fascist body, and PM and all Cabinet minsters report to them.
It is a unique arrangement – democracy run through a fascist control room.
I read a column in the Times UK recently. They are saying this is the least talented Cabinet Britain has seen in a century.
Thank you. Fully agree with the Opinion in all respects.
Amitabh Kant. Why not.
I would love Subramanian Swamy to take over.
Nirmala ji is not fit to be the FM . She should be replaced. She has no idea how economy is run. India needs an economist not a politician.
They need MMS ! But he is Sikh, he does not fit the requirement of being Hindutva Hindu.
why you bring hindutva every time
Piyush Goyal is a good choice, his 2019 budget before elections was a much better one than the budgets by Nirmala Sitharaman. Also, i am amazed how can you not see Nitin Gadkari as an option. He has an excellent rapport across party lines, he has the acumen and has delivered in his existing roadways ministry. Subramanium Swamy is too much of a radical, whom Modi govt wont trust at all. If you are only looking at outside talent Uday Kotak or Deepak Parekh would fit the bill but the problem with them would also be what you listed down for Nirmala Sitharaman, no political expereince, though they do have vast amount of admin experience with them
Deepak Parekh is the man for the moment.
Arvind Virmani or Arvind Panagaria are excellent choice for finance minister.
One demand side stimulus package is needed.
MPC (inflation targeting regime) should be scrapped.
FRBM act should be repealed,
New Fiscal deficit target can become 5-6% by 2025-26
We need to bring back Land Acquisition Bill.
Labour reforms with hire & fire.
Implementation of PJ Nayak Committee report on Public Sector Banks.
Reforms in Food Security Act.
Significant stake can be divested in LIC to a strategic buyer.
HPCL can be sold like BPCL.
LTCG should be entirely scrapped on everything (equity, property everything)
Import duties should be reduced on Capital Goods to boost domestic manufacturing.
India should sign a defence pact with USA.
India can bargain a great trade deal in exchange of this and military expenditure will decrease.
India should sign FTAs with EU and Eurasian Economic Union and African Countries.
Nirmala Sitharaman can become Divestment minister as she is a perfect sales girl.
Why did the author not include Gadkari as a potential candidate??
He is the only talented minister in the cabinet.
Has the reputation of getting things done, good relations across parties and knows a thing or two about business.
How about Dhruv Rathee?
I’ve seen his videos on YouTube, he knows a lot about a lot of things.
While you are praising the S. Jayshakar pick was clever move of Modi, you completely ignoring the fact that the bureaucrats can’t show the political will power which is much needed at the time of crucial decision and taking public support behind him. They are never connect to grassroot people who will support the nation in case a sacrifice is needed.
Zero research and full-on stupidity. Modi and Shah transformed Gujarat when they were at the helm of affairs in that state. Don’t teach business to Gujratis. It’s a pandemic the meltdown is on expected lines. Several measures are being taken to ensure growth. BUT THIS ALL SO THE SEASON TO SELL POLITICAL AGENDAS. Utterly biased and flawed article – clearly paid and sponsored.
‘Modi and Shah transformed Gujarat when they were at the helm of affairs in that state. Don’t teach business to Gujratis.’
That is why they had to spend several crores to build a wall to hide Gujarat slum model from Trump.
No point in blaming Ms Sitharaman. She is only a front. The economy has been completely mismanaged by the PMO. The PM is an extreme left wing Marxist who believes that government must occupy the commanding heights of the economy. A government that must have it’s fingers in every pie. This is a government that wants to run airlines, banks, hotels, airports, temples and what have you. For all it’s pretensions of being a ‘Hindu’government in reality it is a practitioner of Marxism, socialism and other assorted ‘non-Hindu’ philosophies.
This is the best comment of all – nailing the head of the problem.
Not correct. They want to run the temples and hand over the economy to a few corrupt Gujaratis like Ambanis and Adanis.
Nitin Gadkari can do the job. Modi committed a blunder by promoting Sitharaman. Instead, Gadkari should have been in charge.
Mr. Gadkari is known to take everyone along and can build consensus.
Agree with the views. Govt need to do more on this front. Ab expert is required. Don’t make economy a balancing act. It need to be fixed fast.
Subramanian swamy!!
Actually, Sitharaman has been a disaster right from day one when she became Trade and Commerce Minister. That is when our exports fell month on month for 20 months. It was just the BJP spin machine that avoided the truth being exposed to the nation.
Get someone like Deepak Parekh, Uday Kotak, Some one who has experience of the financial world on a large scale!
The first suggestion to this government is that it should resign at once on grounds of incompetence. If its incompetence is in not having the right people it is the business of those in power to look for those they consider good enough It is not the business of its long suffering electorate that faces the consequences of its incompetence. Second, those who are not from the BJP are not under some kind of contract to SUPPORT its misgovernance. I can at a glance point out at least ten major distinguished economists and central bankers who may agree to help. But why should I? And why should they?
I know i am going to get a lot of abuse for saying this. But I think nirmala ji has been the unluckiest FM ever. I don’t think she has the freedom to do much and she had already inherited a bad economy. Her first budget was a disaster and second budget rendered useless due to covid. We do need talent. Someone who understands both economics and politics. Let’s see. A credible face could bring in trust in the system.
From the BJP point of view, Hindus voted for Hindutva, and not for the economy. The first is more important. The Hindu does not mind lying in the gutter as long as Modi makes him feel he has put the Muslims in their place, and the world respects Hindus now.
Nitin Gadkari and Devendra Fadnavis are worth trying