Thank heavens for the Emergency. If Arun Jaitley hadn’t won his spurs then as president of the Delhi University Students’ Union and suffered 19 months of preventive detention, his third Budget might have redefined sedition and clamped a tax on dissent. That traumatic experience may have taught him the wisdom of Kaushik Basu’s belief that ‘tolerance is not just good value but good economics’. Indira Gandhi also confirmed the relevance of the personal element when presenting the 1970-71 Budget. Having snatched the Finance portfolio away from Morarji Desai, she increased the tax on alcohol as, she said, a gesture to his principles.
But listening to Jaitley ploughing his way through interminable prose, and watching him constantly lick his finger to turn page after endless page, I wondered if we need this divisive drama and party triumphalism. Why can’t cooperation replace competition and the nation be regaled with the bipartisan consensus of a single road map to progress? The Budget should be the nation’s agenda, not just the ruling party’s. That’s what Manmohan Singh realised in that dawn of hope on 24 July 1991 when he quoted Victor Hugo’s belief that ‘no power on earth can stop an idea whose time has come’. He was fervently convinced that the emergence of India as a major economic power was one such idea. Even the Bharatiya Janata Party’s General Secretary Govindacharya declared that he and PV Narasimha Rao had “taken more radical steps in one month than past governments in 43 years”. Jaitley could have repeated that superb performance. The former Akhil Bharatiya Vidyarthi Parishad stalwart may be the National Democratic Alliance’s suave mukhota, but he has also been called the BJP’s Manmohan Singh.
Of course, we will miss the light touches that sometimes enliven budget speeches. People wondered in 1970, for instance, whether the shade of the hapless Feroze Gandhi, who had been dead 10 years, stirred a trifle uneasily as his widow murmured— perhaps with a touch of wistfulness—that husbands and wives should submit combined tax returns and that it was not for any Finance Minister to put asunder those whom God had joined together. We might miss nuggets of information like Jaitley’s revelation that a housewife squatting before a coal fire might as well smoke 400 cigarettes instead. Or that in a frenzy of activity, no doubt inspired by Sangh Parivar patriotism, our bees have produced 86,000 tonnes of honey instead of a mere 76,000 tonnes. But without the polemics, Jaitley and his colleagues don’t have to stick to kurta-pyjama all the time for fear a lurking Rahul Gandhi might again jeer at the NDA’s suited-booted style.
The former Akhil Bharatiya Vidyarthi Parishad stalwart may be the National Democratic Alliance’s suave mukhota, but Jaitley has also been called the BJP’s Manmohan Singh
Nor would Jaitley have to take pot shots at United Progressive Alliance Budgets when his aren’t all that different. Someone commented his first Budget could have been Palaniappan Chidambaram’s handiwork. For Sonia Gandhi it was a continuation of UPA schemes. And, indeed, if the lunatic fringe of the saffron brigade and Narendra Modi’s rhetoric are omitted, it’s difficult to tell where UPA ends and NDA begins. Hilaire Belloc’s lines come to mind, ‘The accursed power which stands on privilege/ (and goes with women, champagne and bridge)/ Broke—and democracy resumed her reign/ (which goes with bridge and women and champagne.’
Only last December I criticised Modi for squandering scarce resources on an unnecessary high-speed bullet train from Mumbai to Ahmedabad. Then I discovered the culprit was Manmohan Singh. He finalised that project with Shinzo Abe in 2013. Nor, despite Jaitley’s Rs 9,500-crore investment in the Swachh Bharat Abhiyan, can Modi be accused of discovering that cleanliness is next to godliness. Atal Bihari Vajpayee launched the Total Sanitation Campaign and Nirmal Bharat Abhiyan. Singh continued both. It’s just that Modi shouts while his predecessors whispered.
Continuity is especially evident in the manner successive Budgets favour the rich. Even Revenue Secretary Hasmukh Adhia, admits the treasury loses Rs 2 lakh crore in direct and indirect taxes because of exemptions. Subsidising aviation fuel benefits only the elite whizzing about in aeroplanes. The low tax on gold is another concession to wealthy hoarders. As a wit sneered when beggars were rounded up on the eve of the non-aligned summit, ‘Garibi Hatao’ was literally garib hatao. Jaitley’s pie-in-the-sky promise to double farmers’ incomes by 2022 is silent on the how. Not that details matter. No one expects him to be in charge of Finance five years hence to be held accountable for Monday’s promise. A week is a long time in politics.
It would have been different if big businesses faced a crisis like farming does. As a popular English song has it, ‘It’s the same the whole world over/ It’s the poor that get the blame/ It’s the rich that get the pleasure/ Ain’t it all a bloody shame.’ It’s not at all a shame in India; it’s the law of nature. I read somewhere that the economist Surjit Bhalla called the National Rural Employment Guarantee Act the country’s fourth most corrupt institution. For Modi it was “living proof of the Congress party’s failure”. Jaitley’s Rs 38,500 crore for NREGA reminds everyone that no government dare trim even the most wasteful welfare programme. The BJP’s setback in two states, with five states going to the polls this year, makes populism additionally necessary. There’s also what George Orwell would have recognised as ‘doublespeak’. Jaitley’s promise that 40 per cent of provident fund withdrawals would be tax-free means 60 per cent will be taxed; he didn’t say either that such withdrawals are now totally exempt from income tax. Appropriately, the new dispensation becomes operational on April Fool’s Day.
People wondered whether the shade of the hapless Feroze Gandhi, who had been dead 10 years, stirred a trifle uneasily as his widow murmured that husbands and wives should submit combined tax returns and that it was not for any Finance Minister to put asunder those whom God had joined together
The scintillating Tulsi Chandra Goswami, undivided Bengal’s finance minister in the 1940s, was that unusual politician—rich before becoming a minister. Unusually, too, he warned that any public money he handled would go the way of the not inconsiderable family fortune he had run through. Calcutta specialises in individualists. The dour Ashok Mitra didn’t have to try hard to live up to his boast of not being a gentleman. Preening himself on combining Marxism with the Massachusetts Institute of Technology, another Left Front finance minister, Asim Dasgupta, proudly claimed his doctoral thesis was the MIT library’s most- read unpublished document. The present Trinamool Congress incumbent, Amit Mitra, never fails to remind listeners he is really a suit (three-piece)-and-boot sahib whose dhoti-kurta-jawahar coat ensemble is only to woo the “grass roots”.
A Budget is no more than a finance minister’s equivalent of a housewife’s book-keeping; it’s somewhat less, in fact, for while a housewife must plan for a lifetime, a finance minister needs to think of a mere 12 months. “Balancing the Budget is like going to heaven,” says Phil Gramm, the American economist and legislator who refused to sponsor a bill to cut spending, “Everybody wants to do it, but nobody wants to make the trip.” Finance ministers come and go in the continuum of history. The footprints they make in the sands of time are quickly erased. Who now remembers that the line began with Liaquat Ali Khan whose main brief in the interim government under Lord Wavell was to put a spanner in the works of anything Jawaharlal Nehru tried to do? Or that Mrs Gandhi’s all-powerful secretary, PN Haksar, heady on the socialist wine of abolishing privy purses and nationalising banks, gave the stylish Calcutta barrister, Sachin Chaudhuri, a public tongue-lashing for arriving in his Daimler to be sworn in?
Having drawn up their proposals, Singh and Narasimha Rao discussed them with LK Advani, who applauded Singh’s declaration, “Let the whole world hear it loud and clear, India is now wide awake. We shall prevail. We shall overcome”
Chaudhuri’s brief flirtation with the Cabinet illustrated the unimportance of being Finance Minister. India was reeling from the effects of the wars and drought of 1965. They had emptied the exchequer, and the Prime Minister and her radical courtiers had no option but to accept the World Bank’s prescription. Parliament was told in February 1966 there was ‘no question’ of devaluing the rupee. Three months later New Delhi acquiesced in the Bank’s reform programme ostensibly to encourage foreign aid and investment and boost trade. Kunwar Natwar Singh tells us it was done under the influence of Lakshmi Kant Jha of the ICS whose formidable intellect Henry Kissinger admired and feared when he was ambassador to the United States during the Bangladesh war. Natwar called Jha the most ‘pro-American’ of our mandarins. As Finance Minister, Chaudhuri made the actual announcement as part of an ‘aggressively pro-trade budget speech’. But he was a political outsider and the reforms were dumped. So was he. Asked about the liberalisation-cum-devaluation package many years later, Jha ‘laughed merrily’ and said, “Oh that! That was what George Woods (World Bank president) told us we had to do to get aid.”
The liberal reforms of 1991 further confirmed the extent to which decision-making may have been taken out of the hands of finance ministers. Ashok Mitra says in his memoirs, First Person Singular, that the economist IG Patel, ‘was the first choice of the Washington Consensus for the post of finance minister in PV Narasimha Rao’s government which had agreed a priori to surrender the country’s economic sovereignty to foreigners. Manmohan Singh’s opportunity came only when I.G. declined the offer.’ The story is best continued by quoting from my own 2002 book, Waiting for America: India and the US in the New Millennium: ‘Within hours of the new government taking over Manmohan Singh was talking on the telephone to Michel Camdessus, the International Monetary Fund’s managing director, who was ready to help but insisted on a thorough time-bound overhaul of the economy with the rupee stabilised at a realistic level.’ The chapter describing India’s penury in 1991 and the solution recommended by the World Bank and IMF and readily accepted by Narasimha Rao was titled ‘Made in America’.
Jaitley isn’t dependent on the US in the same way, but opening up the economy has made India part of the inter-dependent global community. America’s slow recovery, China’s slowdown, and Europe’s mixed bag of problems create both opportunities and challenges for imaginative and enterprising financial management. Inflation is down. Oil is cheap. So are commodities. We are proud of the world’s highest growth rate. India sounds like paradise in a tumultuous ocean until one peers closer at the discord within. That takes me back to 1991. Having drawn up a package of proposals, Singh and Narasimha Rao discussed it with Lal Krishna Advani, then regarded by many as Prime Minister-in-waiting. Fearing alarmist newspaper headlines, a hue and cry in Parliament and resistance in the Congress ranks, they didn’t discuss it in the Cabinet. Advani gave his blessings. He applauded Singh’s historic declaration, “Let the whole world hear it loud and clear, India is now wide awake. We shall prevail. We shall overcome.” And so we shall if bipartisan consensus on the Budget makes it the nation’s—and not just the ruling party’s—agenda. That would most effectively realise the promise of 1991.
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