From hardship to ministership: The rise and fall of Yashwant Sinha, the BJP's critic within

Sinha has slammed the Union government, led by his own party, on a range of issues from Kashmir to the state of the economy.

Published: 01st October 2017 02:09 PM  |   Last Updated: 02nd October 2017 11:16 AM   |  A+A-

BJP leader Yashwant Sinha recently lashed out at 'superman' Finance Minister Arun Jaitley for making a 'mess' of the Indian economy. (File | PTI)

Express News Service

CHENNAI: Bharatiya Janata Party leader and former Union minister Yashwant Sinha has been a fierce critic of the current dispensation. Sinha has slammed the Union government, led by his own party, on a range of issues from Kashmir to the state of the economy. His most recent article is yet another critical opprobrium on the Modi government’s economic performance.

Sinha, a senior leader of the party, has held key cabinet positions, including that of finance minister and foreign minister, in the A.B. Vajpayee led government. When Rajnath Singh, after he was appointed party president in January 2013, made a list of party members who would form his core team, Sinha’s name found no mention in it. A few months later, he was back in the news, this time for backing Narendra Modi as the party’s prime ministerial candidate.

However, Sinha was no fan of Modi. It was only a few months earlier that he skipped the BJP’s executive meet in Goa in which Modi was elevated as the party’s prime ministerial candidate.

His U-turn left everyone confused. But for him, backing Modi was a matter of pragmatism. Sinha, who was a member of the old guard led by LK Advani promptly realised that it was the age of Namo and the old order was waning. In doing so, Sinha may have been hoping for clemency from the man who had, by then, become the face of the party Sinha served loyally for two decades.

It was widely expected that as a veteran leader, he would get a place in Modi’s cabinet, if BJP won the election. “Yashwant Sinha is the BJP’s other economic heavyweight, and one who also commands respect from international investors,” observed a piece that appeared on the London-based, Financial Times only weeks before the 2014 election.

However, all hopes were dashed, once the new regime assumed charge. Sinha, aged 77, was left out when Modi formed his government.  In a move to wipe out any trace of the old order, the BJP had introduced a convention: anyone above the age of 75 is not eligible for ministerial posts. It was dressed up as a move to make the party appealing to young voters.

From hardship to ministership

Yashwant Sinha was born in 1937. In his memoir, he recounts the financial hardships his family had to endure once his father, who was an advocate in the Patna High Court with “a flourishing” client-base, fell sick. “I remember how in those difficult days we were left with no money and did not know when and where the next meal would come from,” Sinha wrote.

Years later, as the country’s finance minister, it was this experience that guided his policymaking, he claimed. “That day, I made a commitment to myself and the nation that India must become economically strong. It should be a lender, rather than a borrower. We should never have to look to others for help,” Sinha wrote.

After completing his masters in Political Science, Sinha taught at the University of Patna for a couple of years. However, it did not take long for the young Sinha to realise that teaching was not his calling. In 1960, he cleared the Civil Services exams and joined the Indian Administrative Service.  For a young man from the Kayastha community, what better job to do than serving the country as an administrator?  After all, members of the Kayastha caste have traditionally served as bookkeepers and administrators of the state.

For the next 24 years, Sinha was a civil servant during which he served as a sub-divisional magistrate, district magistrate. He had also served the Bihar government as a deputy secretary in the Department of Finance before heading to New Delhi in 1966. Back then, it may have surprised many that the 23-year-old Sinha, who joined the Indian Administrative Service in 1960, was by 1966, a deputy secretary in the Union Ministry of Commerce.

Sinha the bureaucrat becomes Sinha the politician

Sinha was successful as a bureaucrat. But even the most successful bureaucrats have limited power when compared to the political class. Sinha’s entry into national politics was in 1984. The Lok Sabha elections that year saw the Indian National Congress sweep the polls, riding on a wave of sympathy generated in the wake of Indira Gandhi’s assassination. Sinha contested from Hazaribag. However, the BJP, which was the new party then, won only two seats in the 533-member Lok Sabha.

Sinha lost. But that did not deter him. In fact, it only motivated him. “I did not give up,” writes Sinha who then embarked on repeated tours to his constituency to engage with the voters. Five years later, in 1989, he would come face to face with the biggest challenge of his career so far. That year, he left the BJP and joined the newly formed Janata Dal. He was appointed the party’s general secretary and was tasked with ensuring its victory in the 1989 general elections. To Sinha’s delight, the party won 143 seats and formed a government at the Centre. He did not shy away from taking credit. “I played a very important role in the victory of the party (Janata Dal) in the 1989 elections,” he wrote. Afterall, one is not a shrewd politician if one does not take credit.

A reluctant finance minister

In 1990, Prime Minister Chandra Sekhar appointed Sinha as finance minister. Not many are aware of Sinha’s short-lived stint at the helm of the finance ministry in the early 1990s. He himself was not very fond of it. “My own preference was for the Ministry of External Affairs,” he noted. The 53-year-old Sinha was unsure about his ability to handle the portfolio. He later claimed that his interest was more in history than in economics.

The country’s financial situation was weak in early 1991. The skyrocketing of oil prices following Iraq’s invasion of Kuwait in August 1990 had created a balance of payment crisis. As finance minister, he led India’s efforts to secure international credit. The man who said India should become a “lender” and not a “borrower”, had to go knocking on the doors of IMF for funds. He also toured various countries seeking credit.

At one point, one of his aides informed him that things were “going from bad to worse”. He knew that something had to be done. And what needs to be done was clear. Mortgage the country’s gold reserves in return for credit. He called it “a momentous decision, unprecedented in the annals of Indian history.”  

India, led by Sinha negotiated with the Bank of England. It was agreed that the Bank would release $400 million in return for India pledging 47 tonnes of gold. Although it was a painful decision to take, New Delhi decided to go ahead with it. “Perhaps a less responsible government would have avoided taking such a drastic decision and left the succeeding government to fend for itself,” Singha wrote later.

As a result of his efforts, India also secured funds from Japan. It is ironic that the man who, at one point, in his memoir talks about the need to be financially independent, at another, boasts about having secured a $500 million aid from Japan. “My own efforts in Japan resulted in India receiving $500 million in credit from Japan,” Sinha reflected later. Probably, by then, idealism may have given way to pragmatism in Sinha’s mind.

A sabbatical from national politics

After his party lost the elections in 1991, Sinha had to wait for seven long year to return to national politics. In the meantime, in 1995, he contested the Bihar Assembly election under Janata Party banner and won. He was subsequently made Bihar’s leader of Opposition.

In 1998, it was on Advani’s insistence that Sinha re-entered national politics.  “I told him (Advani) that I was heading the party in Bihar, which has 54 Lok Sabha seats, I considered it my duty to work for victory in the whole state rather than concentrate on winning only one seat. But Advani insisted that I contest” Sinha recollects. The BJP-led NDA won the elections. Sinha was back as country’s finance minister.

However, the late 1990s was a turbulent time. The East Asian economic crisis that had broken out in 1997 was still affecting India’s exchange rates. Further, now India was under economic sanctions, thanks to the 1998 nuclear tests. As a result, it was hard to borrow. In May 1998, the World Bank informed that it’ll postpone releasing a loan worth $900 million that it had sanctioned for India.

'Swadeshi reformer' courts foreign flak

The NDA government, elected to power in 1998, worked on expanding India’s economic liberalisation. However, although private participation was welcomed, yet the role of foreign players and foreign goods pouring into the country in large numbers made certain sections within the BJP weary. In 1998, Sinha, who called himself a “Swadeshi reformer” introduced a budget that proposed tariffs on foreign goods, apparently over concerns that domestic producers would take a hit from foreign competitors. However, many were unhappy with the contradictory signals emanating from New Delhi. “Mr Sinha spoke of reform and economic opening, but the details said otherwise,” observed Christian Science Monitor.

You're fired

Although Sinha in his memoir speaks volumes about his efforts to get India's economy back on track, by 2002, public perception about his party’s handling of the economy was adverse to the party. Vajpayee reportedly told Sinha that although he is doing a “good job” as finance minister, the public perception is different. As a result he had to be shifted. Sinha, who knew that a shuffle was impending, then asked for what he had once dreamed for-- charge of the Ministry of External Affairs.  Finally in July 2002, Atal Bihari Vajpayee made public, the cabinet shuffle. Vajpayee claimed that it would bring a “new and improved look” to his cabinet. After his move from the north bloc to south bloc rest of Sinha’s tenure at the Union cabinet remained a run-of-the-mill. No tough decisions to make, just the routine business.


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