The Indian economy faced a critical balance of payments crisis in 1991. It was running out of foreign exchange. India was forced to airlift its gold reserves to Zurich to get a bailout package. The moment of great crisis thankfully had a Manmohan Singh as finance minister to push momentous reforms that changed India’s economic outlook overnight.
Manmohan Singh thus became an unlikely middle-class mascot for the Congress party. He became the bridge that took not only India but also the Congress party into relevance in the critical ’90s. Thanks to Manmohan Singh, middle-class India got new hope, as did India Inc.
Today, Manmohan Singh is 87. He was the prime minister for 10 years (2004-2014), and his last term didn’t exactly end on a good note. But he hoped history would judge him more fairly. The Congress party today needs another mascot to represent a new economic vision for India, and without doubt it’s the man sitting in Chicago.
Raghuram Rajan was chosen by Manmohan Singh as Reserve Bank of India governor in 2013, when the Indian economy started facing a relatively smaller crisis of economic growth — the buzzword then was “policy paralysis”. Rajan, like Manmohan Singh, isn’t just an economist. He’s emerged as a popular public face. How many former RBI governors’ names can most people recall?
Also read: Is Raghuram Rajan a well-meaning economist or partisan critic?
Man for the job
The Indian economy today is battered so badly that it is looking at an unprecedented crisis. Maruti Suzuki couldn’t sell a single car in all of April thanks to the coronavirus lockdown. Not like the automobile industry was doing too well before the Covid-19 crisis, either. India’s economic engines have had life sucked out of them by demonetisation, GST and now, the pandemic. This great crisis needs a new Manmohan, and without doubt, the answer is Raghuram Rajan.
If we look ahead at the next 5-10 years, it is obvious that India will need a drastically new economic vision to replace Prime Minister Narendra Modi’s command-control hocus pocus. Such a new vision can only come from the Congress, since the BJP has no time for economic talent. Modi has made his derision for “Harvard” clear.
It would be an understatement to say that Raghuram Rajan, who went to IIT-IIM-MIT, is well-liked by middle-class India. Thursday’s video call with Congress leader Rahul Gandhi made it clear, for the first time, that rumours of Rajan’s political inclinations and ambitions are true. At one point Rajan was even praising Rajiv Gandhi’s devolution of power to the panchayati raj, and Rahul Gandhi basking in reflected glory.
The Congress party could use Raghuram Rajan more closely, involve him more formally and publicly to make him in the 2020s what Manmohan Singh meant to the Congress in the 1990s.
Also read: Rahul Gandhi’s chat with Rajan shows why he should stop doing press conferences, like Modi
Pan-India appeal
Rajan can help swing NRIs, CEOs and women voters. He can help the Congress win back some of the middle-class support it has lost to Modi (and not necessarily to the BJP).
Rajan’s Hindi is pretty good, as he demonstrated Thursday when he spoke of Rs 65,000 crore for the poor. But anything he lacks in the Hindi heartland appeal, he can make up by giving the Congress greater heft in south India.
Not many public figures outside of Raisina Hill, Bollywood and cricket are able to have a national appeal that defies state boundaries. Raghuram Rajan, like Manmohan Singh, isn’t seen as a Tamil Nadu guy or a Madhya Pradesh guy (he was born in Bhopal), or a Delhi guy (he went to IIT-Delhi). This truly national appeal means he does not have any provincial baggage.
Rajan could become the symbol of a new contract between the aspirational Indian and the Congress party.
Also read: Raghuram Rajan says Covid-19 greatest emergency for Indian economy, Urjit Patel advises caution
Antidote to Modinomics
Greater public engagement by Raghuram Rajan for the Congress is just what the party needs today to assert that it has better ideas for the deep economic crisis of India 2020.
India has wasted a decade in BJP-Congress partisan politics and all we have is a personality cult amid rising unemployment. The Congress on its own is too discredited, even today, to use this opportunity. But if Raghuram Rajan becomes the voice of the Congress party on matters of business and economy, things could be different. When Raghuram Rajan speaks, Modinomics automatically looks stupid.
Raghuram Rajan has so far behaved like a political tourist in India. But perhaps the problem is that the Congress party hasn’t extended him a long-stay invite. It is time the Congress persuaded him of a higher purpose than his academic pursuits.
The author is contributing editor to ThePrint. Views are personal.