He had a competent team that included his advisor and public finance expert Vijay Kelkar, whose report on direct and indirect tax reforms, formed the basis for the overhaul of India’s tax system. While valuing his officers’ inputs on reforms to steer the economy, Jaswant Singh had an ear to the ground – be it putting more money in homemakers’ purses or being responsive to industry’s woes. He was quick at decision making.
A debt restructuring plan for the steel sector was worked out in flat one and half hours with bankers and industry representatives sitting across the table along-with officials in the finance ministry. Jaswant Singh is said to have approved the proposal the very same day.
A big action was to fix the mess at UTI. His tenure saw UTI restructuring that entailed taxpayers’ money to bail out unit holders of US 64. But he also introduced market friendly reforms that included the proposal to establish India’s pension regulator to oversee and supervise pension funds.
Another big-ticket decision was to implement the debt swap scheme for states to bring down their revenue deficits and bring their finances in a better shape. States saved over 1 to 2% in interest due to the debt swap scheme, between 2002-03 and 2003-04, recommended by the Twelfth Finance Commission between. That was significant. Even today, the debt swap scheme stands out as a model to prepay expensive loans with cheaper new loans.
India also prematurely re-paid high-cost currency pool loans of the World Bank, and of the Asian Development Bank, citing comfortable foreign exchange reserves and lower domestic rates of interest.
Of course, his most talked about stint was in foreign affairs, especially in handling relations with the US after the nuclear tests in 1998. Singh was also no stranger to controversy – for personally escorting terrorists to end an eight-day old hijack crisis, an event that drew huge flak.
There was one in finance too that sparked off a controversy. Ahead of the vote on account in 2004, Jaswant Singh cut slashed customs and excise duties across the board. His decision drew flak from the Opposition, but the NDA defended the cuts on ‘technical’ grounds (that indirect tax changes can be done outside the Budget) North block mandarins had then said that opening up the economy made sense as foreign investment had started picking up.
“I have served here for just about a year and a half. During this period it has been my privilege to see the Indian economy enter onto a sustained and robust growth path of around 7.5 to 8 % per year. This has been possible only because of the reforms pursued by the NDA, as well as by earlier Governments”, Jaswant Singh had said in his interim Budget speech.
A job well done, though the NDA lost the polls in 2004.