How the Finance Minister drafted his first budget and his own indispensability to the Modi agenda
Ullekh NP | 10 Jul, 2014
How the Finance Minister drafted his first budget and his own indispensability to the Modi agenda
Union Finance Minister Arun Jaitley longs for his boisterous and laughter-filled morning walks—which were less walks and more of rusk, biscuits and tea over which he held court at Delhi’s sprawling Lodhi Gardens. The daily visit to the 15th century garden had been an inviolable habit for him, unless he was out of station, and until he joined the Narendra Modi Government in which he also holds the additional portfolios of Defence and Corporate Affairs. For someone who has the gift of the gab, this highly sociable Punjabi has no time these days for long conversations with friends. Even those buddies who often used to feel overfed on his chats now miss those evenings. The most networked lawyer-politician in the national capital can’t even squeeze in brief visits to big fat Delhi weddings.
The 61-year-old Shri Ram College of Commerce alumnus and former president of the Delhi University Students Union had been working overtime ever since he became a Cabinet minister in late May, especially to carefully draft what was destined to be the most crucial announcement of the new Government’s intent: the Union Budget, a blueprint of sorts for a co- alition that was voted to power by an aspiring middle- class with a mandate to reboot an economy lassoed by the crass populism of the past decade.
Expectations of Jaitley, the savviest face of the Modi Government, were huge. Which explains why despite losing the Lok Sabha election from Amritsar to Captain Amarinder Singh of the Congress, Jaitley has had many things going in his favour. As Finance Minister, says a BJP leader close to Modi, he was “the obvious choice”. Jaitley was seen as the ideal leader to helm the Finance Ministry at a time when industry confidence was very low and the middle-class was angry over spiralling prices. Notes the BJP leader: “The advantages he has were many: he knew very well most industrialists through his legal practice; then, among the middle classes, he has a moderniser’s image; within the Sangh, too, he is considered an insider or someone from the stable; and someone who is capable of negotiating the numerous political landmines in the BJP.”
THE BULL’S EYE
Drafting the Union Budget—which is aimed at meeting the aspirations of India’s middle-class rather than doling out entitlements—didn’t just mean cancelling annual holidays in Europe, where he loves going on cruises. It required hard work and constant interactions and consultations with colleagues, including the Prime Minister and bureaucrats. Unlike the UPA budgets of the past that had the stamp of Palaniappan Chidambaram and Pranab Mukherjee—which involved rather little communication with Manmohan Singh—this one, the first by the Modi Government, which came to power on the promise of a radical shift from the populist UPA’s 10-year rule, required constant parleys among the Prime Minister, Finance Minister, and other senior government officials.
According to senior Finance Ministry official, five such two-hour-plus-long sessions were held over the past few weeks at Race Course Road, the residence of Prime Minister Modi. For his part, Jaitley chaired several other brainstorming sessions in the spacious anteroom of his South Block Defence Ministry office, confabulating with ministers who hold financial portfolios such as Minister of State for Commerce & Industry Nirmala Sitharaman, Power Minister Piyush Goyal and Petroleum Minister Dharmendra Pradhan. Jaitley typically spends the first half of the day in his North Block office of the Finance Ministry and the second in South Block.
The team that slogged over this Budget that is geared towards a radical shift was led by Finance Secretary Arvind Mayaram and Revenue Secretary Shaktikanta Das. While Mayaram, a 1978 batch Rajasthan cadre IAS officer, is widely respected for his good track record, Das, a 1980 batch Tamil Nadu cadre officer, is quite unlike his irascible predecessor Rajiv Takru, whom Jaitley recently ejected. A former chief executive of Prasar Bharti, Takru was a favourite of the previous UPA regime and had incurred the displeasure of bureaucrats in the Finances Services wing for being ‘rigid’ in handling cases in the banking sector—such as the bad-loans crisis of the public-sector United Bank. Das was previously Fertiliser Secretary. Jaitley fell back on Das’ efficiency and expertise when he launched initial efforts to track black money stashed away in Swiss banks. Another key member in Team Jaitley is Expenditure Secretary Ratan P Watal, whose job entailed ‘rationalising’ populist schemes such as MGNREGA, managing unpaid bills of the UPA Government, and suggesting ways to decide on the quantum of expenditure.
A Finance Ministry official tells Open that the Prime Minister’s Economic Advisory Council Chairman C Rangarajan, Nirmala Sitharaman, various officials in the economic affairs, banking, and disinvestment departments and others also worked closely with Jaitley’s core team. Ila Patnaik, a professor at the National Institute of Public Finance and Policy, handled the preparation of the Economic Survey. “Several rounds of meetings had been held among them, unlike on previous occasions when the Prime Minister and his team mostly got to know nothing about the Budget,” he adds. According to a person close to the matter, Jaitley, who has friends across the political spectrum, even consulted his predecessor Chidambaram and former Prime Minister Manmohan Singh over the Budget.
A lawyer-politician not very enamoured of Jaitley has words of praise for the minister’s networking skills. “If there are 500 members in Delhi’s power circle,” he says, “Jaitley knows 490 of them.” Born to a lawyer-father who had migrated to Delhi from Lahore and a mother who is a native of Amritsar, Jaitley, who studied at St Xavier’s School, Delhi, has always had a knack for striking up friendships. The home of his father MK Jaitley in Naraina, where Jaitley lived as a Delhi University student, was an adda for student activists of the time, remembers a former colleague. “It continued to be one even after he became a BJP leader in the 1990s, a time when Modi and he shared good rapport,” says a Delhi-based BJP leader.
It was at this home that the police came knocking in the wee hours of 26 June of 1975, the day Prime Minister Indira Gandhi imposed her Emergency on the country (within weeks of a court annulling her election as an MP from Rae Bareli). When the police came calling, Jaitley’s father got into an argument outside the gate of his house, questioning them about the nature of the offence his son had allegedly committed. Jaitley remembers that the police just had instructions to arrest him, and did not know under which provision he was to be picked up. While his mother Ratan Prabha watched with shock, Jaitley fled through the backdoor—only to be arrested a few days later on the University campus where he had organised a protest against the Emergency. By then, senior opposition leaders like Jayaprakash Narayan, Morarji Desai, Chaudhary Charan Singh, AB Vajpayee, LK Advani and various others across the country had been arrested. Jaitley was taken to the Timarpur police station near the Delhi University campus before he was detained for 19 months under the Maintenance of Internal Security Act in Delhi’s Tihar jail and Haryana’s Ambala jail.
Jaitley went on to resume law studies after he was freed because the ABVP had decided against joining the Janata Party government of 1977. A member of the Rashtriya Swayamsevak Sangh (RSS), he chose to stay away from parliamentary politics, returning only in 1991 after he fell under the spell of LK Advani; the same year, he was named a member of the BJP’s National Executive. He has been a member of the Rajya Sabha since 2000, and has held several ministerial posts: he was Minister of State for Information and Broadcasting, and later Commerce and Law minister in the Vajpayee Government.
From the late 1970s to the late 1980s, he rose to become one of India’s most highly celebrated advocates. As a Supreme Court lawyer, Jaitley went on to cultivate numerous friendships among corporate leaders—to the extent that he is friends with many of them on a first-name basis. He was also associated closely with the late Ramnath Goenka of the Indian Express and several BJP leaders. When VP Singh became Prime Minister in 1989, he was named additional solicitor general. Aged 36 then, he was one of the youngest lawyers to hold the post.
Chitra Subramaniam, the award-winning journalist known for Bofors investigations, knew Jaitley as a young lawyer who handled the government inquiry of the defence scandal that rocked the Rajiv Gandhi Government. She notes that Jaitley combines intelligence, wit, speed, curiosity and solutions in a way that is rare. “I have seen him read documents and come up with an analysis quickly… I have had the privilege of working with him in some three specific instances—Bofors, trade and WTO and tobacco control (as the NDA’s Commerce minister). His intellectual stamina and personal commitment to a cause he believes is something that makes him stand head-and- shoulders above many politicians, not least because he is articulate and his advocacy is powerful, but also because his research and study of the subjects is thorough and his method of inquiry is multi-faceted,” says Subramaniam, now head of the news portal, The News Minute.
By the late 1990s, Jaitley had risen rapidly and emerged as a key strategist for the BJP, overseeing several state election victories from Bihar to Gujarat. His relationship with Modi, who had been banished from Gujarat then, was very good, both being close associates of Advani. “That they are from the same age group also helped. Another reason why they got along well was that Modi was a grassroots leader and Jaitley a metro-oriented leader. Both could share notes,” says a BJP leader. Jaitley, incidentally, was elected to the Rajya Sabha from Gujarat.
Jaitley’s ties with Modi strengthened after the latter returned to Gujarat and came under pressure from both within and outside the party to step down as the state’s Chief Minister following the 2002 riots. “It is true that Jaitley has been his principal backer in Delhi since then. It is remarkable that there is no peer group rivalry between them so far because of the nature of their roles. A mass leader always wants an erudite guide, who in this case also happens to be a troubleshooter,” the BJP leader adds.
Besides waging a war on his detractors within the party, Jaitley also went on to advise Modi on numerous cases against him in the aftermath of the Gujarat violence. Jaitley was at the forefront of a campaign in a BJP National Council meet of 2002 for Modi’s continuance as CM of Gujarat. He was also instrumental in pitching Modi’s name for Prime Minister after the 2012 Gujarat Assembly polls, when the BJP won 115 of the 182 seats and Modi did a hat-trick. Though there were murmurs of opposition from some BJP leaders—including Sushma Swaraj and others—Jaitley and other met the RSS top brass to convince them that Modi alone could bring together a disparate BJP and breathe new life into the organisation by energising cadres. Jaitley also managed to persuade the sulking patriarch Advani to the cause, and the latter finally gave his nod to Modi being appointed the BJP’s chief election campaigner.
Political pundits, meanwhile, aver that looking for a No 2 in a cabinet headed by a ‘very powerful person’ makes no sense. However, it is no secret that Jaitley enjoys Modi’s trust more than any other senior Cabinet colleague. Besides, Jaitley has the last word on key issues that come up in the Cabinet. And Modi himself asks for his intervention in crucial matters, a person close to the matter says.
Jaitley, unlike many other senior ministers, also mentors younger ministers such as Sitharaman, Pradhan, Ravi Shankar Prasad and Piyush Goyal. A senior BJP leader notes that his style is like that of the ABVP senior in- charge. “Since most others were his juniors in the student organisation, you don’t hear of a turf war here. The big plus is that he shares a very good relationship with Modi,” he says.
More importantly, Jaitley has endeared himself to India’s middle-class. “There are more reasons for this. He will never do anything that angers the aspiring millions of the country. He could be stern in his speeches, but he is not hateful,” notes a party activist. “We have seen this in Parliament. He has risen to the challenge of the Leader of the Opposition in the Rajya Sabha many times over with the ease and grace of a conductor of an opera who knows what to highlight when and where to remain silent,” says Subramaniam. Notably, even his political rivals and detractors are known to rush to him for legal counsel in times of trouble.
Jaitley is a 21st century leader known for his perfect pause, snappy soundbites and grand delivery, making him one of the most suitable leaders for the electronic media. Again, he belongs to a generation that knew old Hindi songs by heart, ate street food with no sense of foreboding, and had protested against Indira Gandhi’s Emergency on the streets. No wonder, then, that the top-notch lawyer- politician, a connoisseur of the good things in life, has his ear firmly to the ground when it comes to sensing middle-class aspirations.
By Thursday noon, it seemed the man had been fine- tuning the first draft of India’s modernisation all these years. His time has come. India’s too.