The new found animal spirit, Pranab's departure and a teetering economy

Written by: Sunil Fernandes
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 Animal spirit, Pranab's departure and a teetering economy
First things first. Investors and analysts have yet to comprehend what the Prime Minister means by reviving "animal spirits" in the economy.

Perhaps, it's a spirit that Finance Ministry officials have been lacking in the last three years under Pranab Mukherjee. How can an economy lack the spirit, when the direction of the economy is largely determined from North Block.

It's clearly, people at the helm that lack the spirit. How else can one explain a teetering economy, against the wealth of talent in Finance that the government has.

Take a look at the think tank

Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission has an impeccable track record in Finance. He has had stints at IFC Washington and World Bank. It certainly can't get bigger in international financial exposure. Besides, he has a long standing track record in India, being a Secretary in the Ministry of Finance and Secretary Department of Economic Affairs.

He has ably assisted Manmohan Singh in resurrecting an economy that almost went dead in 1991.

C Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, a key member of the think tank, is a former RBI governor. Again, a man with impeccable track record, who understands economy better than most of us do. He is Chairman of the Prime Minister's Economic Advisory Council and has also taught at the University of Pennsylvania and the IIM-A.

With the Prime Minister and Pranab Mukherjee, the nation had two former Finance Ministers, one as the head of government and the other as a Finance Minister twice (now resigned). Yet, our growth rates dipped to a nine year low; yet out current account deficit has hit a eight year high and yet the rupee has plunged to a lifetime low. Not to mention fiscal deficit and inflation which has remained sticky for the last few years.

Certainly, its not talent, but "positive spirits" that were absent. It happens when you are bogged down by scams, pulled up by the judiciary, and petrified by the likes of Anna Hazare, which ensures that babus at the finance ministry do not take decisions. Of course, plucky allies only compound your ability to push through reforms.

Call it "animal spirits" if you may, but, Pranab's departure seems to have ushered in a new found spirit. Stock markets have turned buoyant from the verbal language and body language of the Prime Minister, who is also handling Finance now. We just hope that this spirit remains, helps the talented officials to act and pushes India's economy away from the brink.

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