The High Court judgement in favour of the Tatas on Singur, and the announcement by Swedish furniture major Ikea that it is setting up shop in a single brand retail venture in India are two rays of light in the gloomy India story.

As the debate rages on whether an economist or a politician would be better all around as the next Finance Minister, the usual example trotted out is of the time when the bureaucrat and economist Prime Minister Dr Manmohan Singh undertook liberal reforms as finance minister, and Prime Minister Narasimha Rao had his back. This time round, Singh is Prime Minister. His outgoing finance minister the genial and sharp trouble-shooter Pranab Mukherjee was equal parts politician and economist.

Whether the new man in North Block must be an economic manager first and a politician second is still open to debate. The stock market, the best barometer is calmer at the prospect of either the prime minister himself taking over, or bringing in trusted advisers like C. Rangarajan and the pragmatic urban development minister Kamal Nath.

Clearly, the stage is set for Prime Minister Manmohan Singh to directly deal with the imperatives that must revive the sagging Indian economy. While in the past, political imperatives took precedence, the sense emerging within the UPA is that the time has come when the “economy should determine politics” and not the other way round.

Delhi is now abuzz that the Prime Minister will keep the finance portfolio at least till the election for the post of Vice-President is over in September. In the next three months it is certain that Dr Singh “will steer the Indian economy” till a final political decision is taken on who will occupy North Block.

Sources said he may “ask either deputy chairman of planning commission Montek Singh Ahluwalia or Prime Minister’s Economic Advisory Council’s (PMEAC) chairman C. Rangarajan to assist him in putting the Indian economy back on track”.
Chief economic advisor to the finance ministry Kaushik Basu is also reported to have maintained that if the Prime Minister “keeps the finance portfolio with himself, it would be good for the country”. He has argued that keeping in view the fact that “the policy measures needed to be taken,” that require astute economic sense, Dr Singh is better suited than most.

But it’s the caveat he added that might add credence to the second theory, that finally it is going to be a “political decision” as to who stays and who goes in the government.

Knowing full well that in the end, deciding the name of the next incumbent of North Block would be a political call, many of the next generation rung in the government have started positioning themselves to take up the coveted job.

Among the clear front runners are Urban Development Minister Kamal Nath whom many say is equally at home in the world of politics as he is with the economy. Sources say, more importantly, Mr Nath enjoys the trust and the backing of a section of the top Congress leadership.

A close second is rural development minister Jairam Ramesh, besides home minister P. Chidambaram, who has always considered the finance portfolio close to his heart.

Whereas Mr Ramesh is a known favourite of AICC general secretary Rahul Gandhi, Mr Nath has the advantage over Mr Ramesh, as he is seen as one of the few ministers savvy enough to counter and keep apolitical aides of Dr Singh, such as Mr Ahluwalia and Dr Rangarajan, one or both of whom could be pulled in as Chief Economic Advisers, at bay from forming a closed coterie around the Prime Minister.

In the case of Mr Chidambram, a decision would have been easy, given his track record as finance minister in UPA-I, but in the light of the court cases pending against him, it would be difficult for the leadership to shift him from home to finance at this juncture, sources said.

The possibility of the Prime Minister holding the portfolio till 2014 and steering the Indian economy out of the gloom by taking bold reformist decisions pertaining to FDI in retail, aviation, insurance etc and legislative measures like GST, DTC, PFRDA and banking and insurance bills, is not being ruled out.
Whoever takes over, the bottlenecks in the infrastructure sector need to be addressed quickly and aggressively, to give much needed impetus to the fallen Madonna and the sagging economy.