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September 11, 1998


The Rediff Business Special/ Vijay Kelkar

A committed, cautious liberaliser and consensus-builder

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Amberish K Diwanji in New Delhi

Vijay Kelkar It was one of the momentous changes at the finance ministry when reigning prince Montek Singh Ahluwalia made way for his low-profile successor, Dr Vijay Kelkar. Vijay who? Some might ask. But not many.

Because the man succeeding Ahluwalia, low-profile though he is, is widely hailed for having dismantled the Jurassic-age administered price mechanism that controlled the petrol and petro-products' prices in India, which are among the costliest in the world.

Dr Kelkar’s smooth handling of that tricky affair shot him into the limelight, what with pressures from various lobbies and political quarters still inimical to liberalisation and market-oriented reforms.

Still, his move up to the finance secretary's post, considered by many as perhaps the most important bureaucratic assignment in India today, was a surprise. It was widely believed the post would go to an Indian Administrative Service officer, especially since Ahluwalia, a non-IAS person, had sat on his chair for seven long years. Hectic lobbying was reported, yet the fact that the mantle fell on Dr Kelkar, another non-IAS officer, is perhaps the first indicator of the high regard in which he is held!

Dr Kelkar, his friends and colleagues insist, is a mild-mannered person with deep convictions. “One of his strongest points is that he is extremely open to new ideas and suggestions, and not at all dogmatic,” says Anil Supanekar, who was a neighbour and schoolmate of Dr Kelkar in Pune and has known him for almost 50 years. “Yet this does not mean he keeps changing his mind. On the contrary, he has firm views and unless you convince otherwise with very good reasons, he will follow his convictions.”

This particular sentiment is also echoed by those who have worked with him. “Perhaps it is because he did not stay on as an academic, even though he came from it, that he is so open-minded,” said Dr R K Pachauri, director, Tata Energy Research. “His openness makes it easier fo others round him to communicate with him.”

Adds R Vasudevan, a former IAS officer who has worked with and known the finance secretary since 1973, “Dr Kelkar has no preconceived notions. He works in the problem-solving mode, seeking solutions to problems.”

One major issue has been the question of commitment to market reforms. Fingers are pointed to Ahluwalia’s track record and questions asked if Dr Kelkar can keep up the pace. His friends and colleagues do not doubt Dr Kelkar’s ability, what they fear is the environment and system he works in.

“He is committed to market reforms,” stresses Vasudevan, “and this was amply proven by the manner in which he dismantled the APM of petroleum products.”

Dr Pachauri recalls the days of the APM dismantling. “His minister then, Janeshwar Mishra, was quite supportive, but perhaps did not understand the complexities of the issue or was too preoccupied with the political chaos prevailing then." [The United Front was constantly kept on a roller-coaster thanks to the Congress’s machinations.]

It was Dr Kelkar’s efforts and his deep belief that the APM simply had to go, the sooner the better, that saw it actually happened,” he says. “If Dr Kelkar had wanted to play it safe or was not committed to reforms, he could simply have delayed the dismantling.”

In fact, the dismantling of the APM, despite doubts expressed by the Communist parties allied with the United Front, is now considered one of the few successes notched up by that doddering government, and was hailed by all and sundry as a step in the right direction towards market reforms.

So is Dr Kelkar an out and out reformer? E A S Sarma, who co-authored a chapter on the energy sector along with Dr Kelkarin the book India: Development Policy Imperatives (Tata McGraw Hill, 1996), and is today the expenditure secretary reporting to Dr Kelkar, says, “He is a committed liberaliser, but if the market is imperfect, he will seek some regulation. It is more of a balanced approach towards reforms.”

Giving an example, Sarma says, “In the petroleum sector, he wanted liberalisation because he saw no reason for an APM except for kerosene. But, by the same yardstick, in the area of coal, which is labour intensive, and electricity, which benefits vast segments of the rural population, he favoured a pricing control. In that sense he is pragmatic and his views encompass other dimensions.”

Vasudevan echoes the sentiment. “I feel he is a cautious liberaliser,” he says, and adds, “He is also a keen believer in indigenisation. The petroleum industry was highly imported oriented, Dr Kelkar indigenised large portions of it.”

Dr Kelkar is also reputed to be a man who moves fast, something that will surely be appreciated at a time when the economy is slowing down! “Strangely, though he has a Ph D (in economics) and a background in academia, he is more a man of action than thought. He gets others to do the thinking and then acts on it quickly,” says Dr Pachauri, speaking from experience.

The second worry of his friends and well-wishers is the current environment. One must not forget that one of the more important reasons for Ahluwalia’s success was the complete backing that he had from his minister, Manmohan Singh, who in turn was virtually given a carte blanche by his prime minister, P V Narasimha Rao.

“Don’t forget that in 1991, India faced a crisis of epic proportions, and that itself gave Manmohan and Ahluwalia ample scope to go ahead and do what they felt necessary without having to worry too much about the immediate repercussions,” says Dr Pachauri.

It is this prerogative that Dr Kelkar simply might not have. Certainly he has the confidence of his finance minister, Yashwant Sinha, who got him into North Block in the first place. But Sinha himself is political lightweight in the Bharatiya Janata Party, having joined the party only in 1992.

To make matters worse, the BJP itself is a divided house on the question of reforms, with a powerful section within seeking the alternative of swadeshi (nationalist economics). It remains to be seen how well the pressure from this lobby, which recently criticised the government’s liberalisation and globalisation policies, is handled.

And though the prime minister appears committed to reforms, his recent move to set up two advisory panels – one on the economy, and the other on trade and industry – is also being seen as a step to sideline the finance ministry. Reason: not one official from the finance ministry is present on either panel, while N K Singh, former revenue minister and current secretary in the prime minister’s office, is on both! Such a set-up would have been unimaginable during Dr Manmohan Singh’s tenure.

It is also being seen as a move to clip the freedom of the finance ministry by the powerful IAS lobby that might still nurse a grudge at being elbowed out of the finance secretary’s post, something that Dr Kelkar will have to guard against. Say sources who interact with the bureaucracy: “They are all just waiting for Dr Kelkar to make one wrong move to trip him. He will have to be careful.”

Adds Dr Pachauri: “Dr Kelkar is not a schemer or a plotter, he is just a simple and straightforward guy. But in the system that exists, he should be aware of the plotters and schemers. Only I am not too sure if he thinks along those lines.”

Still, Dr Kelkar’s well-wishers expect him to ride through. After all, Dr Kelkarhas been associated with the government since 1973, when the then Planning Commission deputy chairman, D P Dhar, on the lookout for young blood and talent, asked Dr Kelkar to join him.

“He is one of India’s longest serving secretaries,” says Vasudevan, “and has risen through the ranks by his sheer brilliance and hardwork. I am sure he will be able to tackle such difficulties.”

What might also see Dr Kelkar see through are certain personal qualities. “He is truly one of the nicest human beings who cares for the welfare of others,” says Supanekar. And if one does not wish to believe simply the words of an old friend, Dr Pachauri seconded him. “Dr Kelkar is never one to take all the credit for himself. It is this ability to share that wins him friends and admirers,” he adds.

The finance secretary has a way of getting things done. For instance, a clever move by him during the difficult days of dismantling the APM was to get a joint secretary in the petroleum ministry – an IAS officer – to set a timetable for liberalising the petroleum products. The step not only ensured the success of the move, but also the support of the IAS officers. “This is perhaps his strong point, the ability to build a consensus on issues and then act on them,” says Dr Pachauri.

It is not just the senior officers but even the junior officers who swear by Dr Kelkar. For instance, when he was in the petroleum ministry, for the benefit of his staff, he got a dish warmer so that they could have warm lunches. “The fact that no one else had thought of it earlier pleased us no end, and shows the quality of the person,” says an officer at the petroleum ministry.

The officer adds that during the dismantling, Dr Kelkar was able to stand his ground due to his deep conviction in what he was doing. “Today, he is the right man in the right place,” he insists.

“I am sure he can do to India what Montek did,” says Dr Pachauri, “but that will depend on the support he gets and on whether the government survives its term.”

Dr Kelkar, who did his schooling in Pune, studied to become an engineer, going on to do an MS in industrial engineering in the United States. “Somewhere in the US, he decided on doing economics, and did his Ph D in that,” says Supanekar.

Was Dr Kelkar a brilliant student? “Not in school, there he was just like all of us,” laughs Supanekar, then adds, “but in college, he suddenly shone through. He graduated with distinction from Pune University, an incredibly rare achievement in those days (and today, one may add). I guess then we all realised that great success lay ahead for him. And in America, he really shot up.”

Getting the economy roaring will only add another feather, perhaps the biggest of them all, to his crowded cap.


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