Manmohan Singh, India’s reformist leader and former PM, passes away at 92

“I truly believe that history will be more favorable to me than the contemporary media.” These were the words of Manmohan Singh at his final press conference as Prime Minister in 2014.

If history is judged by economic performance data, Singh’s first term (2004-2009) may indeed be seen more favorably than his second (2009-2014).

During the first four years of his tenure, the average annual economic growth was 7.9 percent. However, the global financial crisis, triggered by the collapse of Lehman Brothers on September 15, 2008, significantly slowed economic growth, bringing it down to just 3.1 percent in 2008-09. Despite this, the overall average economic growth during Singh’s first term remained at 6.9 percent.

The growth rate appears a bit depressed compared to what was shown by the old method of calculating GDP on the base year of 1999-00 and 2004-05. On that basis, the middle three years – 2005-06, 2006-07 and 2007-08 – delivered more than nine per cent growth rate before it slowed down to 6.7 per cent in 2008-09 due to the global financial crisis. The first stint of the Singh government yielded an annual average growth rate of 8.5 per cent on that methodology.   

In the second term, his government came under the attack as charges of corruption against the regime flew thick and fast in later years, whether it was the 2G scam or the coal scam. This was accelerated when Anna Hazare sat on a fast in the national capital to press for the Jan Lokpal Bill (Citizen’s Ombudsman Bill) to investigate corruption charges against public functionaries.

The Singh government’s failure to promptly withdraw the fiscal stimulus, which had been introduced to support the economy during the global financial crisis, contributed to the widening of the Centre’s fiscal deficit in his second term. The expenditure-income gap remained above 4.4 percent of GDP throughout each year of the second term. As a result, the average annual fiscal deficit increased to 5.24 percent during this period, compared to 4.06 percent in the first term.

Price inflation also became a significant issue under Singh’s leadership, particularly during his second term, with ordinary citizens bearing the brunt of the rising costs. Wholesale price inflation surged to 9.57 percent in 2010-11, and the average annual inflation rate for the second term increased to 6.87 percent, up from 6.06 percent in the first term.