Advice from Rajiv Gandhi’s Adviser to Narendra Modi: Do not populate the “Planning Commission” with worthies, scrap it, integrate its assets with the Treasury. And get the nationalised banks & RBI out of the Treasury. Tell them to read my 3 Dec 2012 Delhi lecture with care. Clean Government Accounting & Audit is the Key to Clean Public Finances & a Proper Indian Currency for the First Time Ever

16 May 2014

Mr Modi’s victory is more amazing and bigger than Reagan’s in 1980 or 1984, or Thatcher’s in 1979 or 1984…One hopes one does not have to make comparisons with any earlier times… The interviews he gave in recent days were excellent in their sobriety, quite unlike his sneering rabble-rousing mass speeches… I have said I do not doubt his commitment to India’s national interest, and I add I do not doubt his managerial competence. What does concern me is the vacuum of commonsense as well as expert reasoning around him although that around Sonia-Manmohan was as bad as well as being more pretentious. If Mr Modi can do anything like what I said in Delhi on 3 December 2012, which Manmohan was too incompetent and bureaucratic to even try, he has my applause. The first task is to ****not**** fill up the so-called Planning Commission with BJP worthies and cronies, and instead ***to declare he is closing it down and integrating its assets with the Finance Ministry***… The second is to remove control of the banks and the RBI from the Finance Ministry and create a different agency or department or even Ministry for Money & Banking. Finance (with Planning under it) does the fiscal budgets and government accounting, for Union and States. Money & Banking seeks to bring some slight semblance of integrity to the currency for the first time ever, both at home and abroad. Don’t ask Montek Ahluwalia, don’t ask Rangarajan, for heavens’ sake don’t ask Manmohan Singh or even his young man Raghuram Rajan… Just do it…

18 May 2014
Mr Modi has a unique chance to change the face of Indian governance for the better — and the chance is now, **before** he announces a Cabinet. Essentially, he is beholden to no one in making his choices, he can bring in the maximum amount of commonsense and expert reasoning right at the start.

My first recommendation has been to *scrap the so-called Planning Commission* rather than populate it with BJP cronies and worthies where it was populated by Congress worthies and cronies before. If you start populating it with your cronies then you have lost the plot immediately, as you are needlessly creating vested interests once more, impossible to get rid of later. Vajpayee-Advani lacked the guts and vision to do this. Modi can do it easily. Montek Ahluwalia and Manmohan Singh got the so-called Deputy Chairman to have a higher rank in the Order of Precedence than elected Chief Ministers of States! Ahluwalia attended Union Cabinet meetings and “GOM” meetings as a member without being elected to anything at all. The Planning Commission’s physical assets should be merged under the Finance Ministry immediately with a one-line Executive Order. At the same time, the RBI and the nationalised banks should be removed from the Finance Ministry’s control completely, if necessary into a new Ministry of Money & Banking.

Finance (& Accounts and Planning) are then tasked to get the budgets right, both Union *and* States — *and including the military and the railways*! That is all they do, that should be their full-time year long occupation, nothing more, not listening to or yielding to lobby groups, not allowing anyone to get even faintly close to them, just getting all the Budgets right. Money & Banking would run the nationalised banks on commercial lines (and that means being ready to battle their fat cat unions), plus there is the RBI with its usual banking supervisory and money creation and balance of payments management roles.

Secondly, change the name of the Defence Ministry to the War Ministry or Forces Ministry, Raksha Mantralaya to Yudh Mantralaya or Fauj Mantralaya. India has never fought an aggressive war and is not going to do so now. Every war it has fought has been defensive, so calling it the Defence Ministry is superfluous and even perverse. Calling it the War Ministry tells it what to do, namely, win any war that is thrust on you, any which way you can and at least cost all around. Simple as that. Why it is perverse to talk of a Defence Ministry is because of its fiscal implications. Fat cat peacetime generals, air marshalls and admirals are prevailed upon by foreign weapons’ salesmen acting through ex-servicemen Noida brokers to waste public moneys endlessly on innumerable things which are utterly unrelated to war-fighting capabilities. And there can be no fiscal responsibility ever in India until the military budgets are brought under control. I have called the military budget the Black Hole of Indian public finance, no one knows what goes in or what comes out. And the preparedness for war itself is unknown as well — as the Mumbai massacres showed. Mr Modi and his putative War Minister should simply get the generals, air marshalls and admirals to tell them what plans they have to win different wars thrust upon them in different scenarios; what are their strategies to win those wars, and what resources do they need for those strategies to prevail; that is how you figure out the military budget. All the rest is fat, which only causes corruption and inflation too.

Thirdly, design a better cabinet on the lines, for example, I would have given to Rajiv Gandhi if he had not been assassinated. Manmohan Singh had 79 Ministers! You only need a dozen senior ones and a dozen junior ones, really…

Don’t set up a committee of worthies to examine all this… Just do it… I will applaud and so will everyone else…

See especially this…

3dec

 

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