Deputy Governor State Bank Murtaza Syed praised the 30-year-old economic initiatives of India’s former Finance Minister and former Prime Minister Dr. Manmohan Singh and presented him as an example.
In his long Twitter thread, Murtaza Syed gave credit to Dr. Manmohan Singh for bringing the Indian economy out of the brink of bankruptcy and placing it among the major economies of the world.
Deputy Governor State Bank Murtaza Syed wrote in his tweet that “30 years ago India was also on the verge of bankruptcy. In response, its Finance Minister gave a budget speech that will be remembered for generations, this speech changed India forever.” “It couldn’t be more different from the budget we heard recently in Pakistan.”
First, India’s self-effacing FM, Manmohan Singh, an accomplished economist, did not dwell on what his predecessors had done or on imagined global conspiracies. He acknowledged that the country was in its deepest ever crisis & that the crisis was of India’s own making…
— Murtaza Syed (@murtazahsyed) June 25, 2023
He said that “first of all India’s temperamental and economist Finance Minister Manmohan Singh did not consider what his predecessors had done or the global conspiracies, he admitted that India is facing the worst crisis in its history and that The crisis is of its own making”.
Murtaza Syed wrote that “India is living on loans and borrowed time, it had no time to waste and no easy way to survive, but India can rise from the ashes by taking difficult steps, the emergence of India was an idea.” Whose time had come.”
Second, instead of pretending that the crisis was temporary and life could go quickly go back to some imagined past “golden period”, he made it clear that the crisis was endemic and would take at least 3 years of determined action to resolve. But it would be worth it in the end.
— Murtaza Syed (@murtazahsyed) June 25, 2023
He further said that “Manmohan Singh, instead of showing that this crisis is temporary and that life can quickly return to a golden age, he made it clear that this crisis is local, which will take at least 3 years of persistence to resolve.” Steps will have to be taken but eventually it will yield encouraging results”.
Fourth, he presented a strong stabilization plan that was necessary to deal with the immediate crisis, centered on slashing wasteful govt spending on tax incentives, untargeted export subsidies, meaningless ministries and loss-making SOEs, while moving to a more flexible Rupee.
— Murtaza Syed (@murtazahsyed) June 25, 2023
Murtaza Syed added in his praise of Manmohan Singh, “Thirdly, he was brutally honest about the most fatal flaws in India’s economic growth methodology. India, like the current situation in Pakistan, was facing huge fiscal and current account deficits.” was the victim, which was increasing its internal and external debt and crippling the economy, the game was now over”.
Deputy Governor State Bank further wrote, “Dr. Manmohan Singh presented a robust stabilization plan that was necessary to tackle the crisis immediately, based on tax incentives, untargeted export subsidies, meaningless ministries, and a loss-making government.” Institutions were to reduce wasteful spending and make the rupee more flexible.
… as well as foreigners wanting to produce and invest in the country. Pak needs similarly clever quid pro quos for getting domestic stakeholders to support our much needed reforms.
— Murtaza Syed (@murtazahsyed) June 25, 2023
Murtaza Syed said, “They have removed unnecessary government controls (the infamous license rule), trade restrictions, public monopolies, establishment of new institutions, and barriers to foreign investment to protect the economy from destruction and harm to the poor through this stabilization process.” Removed and freed the private sector”.
He said that “Pakistan also needs such prudence to get the support of the country’s stakeholders for the same inevitable reforms”.
For this, he was able to rely on the eponymous “M-document”, prepared by reform-minded Economic Secretaries, which had the buy-in of imp stakeholders, including his remarkable PM, Narasimha Rao, who stood by him through all the hard reforms despite heading a minority govt.
— Murtaza Syed (@murtazahsyed) June 25, 2023
The Deputy Governor State Bank added that “Manmohan Singh did not implement the reforms haphazardly, but paid close attention to coordination and order to avoid undesirable consequences such as inflation or increase in imports”.
Murtaza Syed added that “Manmohan Singh’s budget speech ushered in an amazing era of reforms. Although his government lost the next election, its legacy was certain. It laid the foundation for the miracle of India and the world. created a consensus within its fragmented democracy for deregulation and integration”.
Some lessons for Pak policymakers: tell the truth, correctly diagnose your problems, trust economic experts, provide them political cover, stop pretending there are quick fixes, integrate with the world & inspire your people with a hopeful but honest message. It’s about time.
— Murtaza Syed (@murtazahsyed) June 25, 2023
Deputy Governor State Bank added that all this has some lessons for Pakistani planners, tell the truth, assess your problems correctly, trust economists, give them political protection, and stop pretending that there are quick fixes. Are, connect with the world and inspire our people with a hopeful yet honest message, this is the need of the hour”.