The Hopeful’s Gambit

The political fortunes of a finance minister usually mirror that of his government. But in P. Chidamba­r­am’s case, the picture is further complicated by the speculation that he could be an acceptable—and youn­ger—alternative to PM Manmohan Singh. The speculation is itself a compliment of sorts to the prime minister. When Dr Singh took charge at the helm, conventional wisdom had it that this was an emergency measure nec­essitated by the peculiar circumstances that Sonia Gan­dhi found herself in. Over the years, though, Manmohan has created a niche for himself as India’s first bureauc­rat-prime minister. He has taken responsibility for pol­icy-making and implementation, while staying well out of the political space. If Rahul Gandhi’s reluctance to enter government is a sign that he would follow in his mother’s footsteps rather than his father’s, he may well need his own bureaucrat-prime minister. And Chidambaram would certainly be a candidate.

As a career politician Chidambaram can, of course, never be the political lightweight that Manmohan has been. But he comes close. He struggles to hold on to his Lok Sabha constituency in Tamil Nadu. And in the history of that state’s Dravidian dominated politics, he would be happy to rise above the footnotes. His personal manner too is not entirely conducive to building political alliances, especially in north India. This should ensure that even the backroom approach to political dominance won’t exactly be kept ajar for him. He thus meets the essential condition of not challenging the Nehru-Gandhi family.

Chidambaram also did his case no harm by announcing—suitably early in his 2013 Budget speech—his commitment to a view that Rahul Gandhi has been supporting for a while: of growth coming before distribution. And in trying to use the budget to promote growth, he stuck firmly by the conventional wisdom of present day economists, which holds that the first step in economic strategy is to bring the fiscal deficit under control. He has placed a cap on the fiscal deficit for the current year at 5.2 per cent—a level that not many believed could be achieved. And he has gone on to promise a further red­uction in that figure to 4.8 per cent in the coming year.

Chidambaram’s budget has also offered sufficient ind­ications about his being open to protecting the political interests of his party. With crucial elections coming up in Karnataka in a couple of months, there are a number of Karnataka-related initiatives thrown in. He not only found it necessary to mention both the Chennai-Benga­luru industrial corridor and the Bengaluru-Mumbai industrial corridor, but also finally addressed the concerns of sericulture farmers in southern Karnataka. These farmers had been reeling under comp­etition from Chinese raw silk, following a substantial cut in duties on imp­orted raw silk. By raising the duty on raw silk from 5 per cent to 15 per cent, he has struck the right political chords.

What Chidambaram would need to watch out for is the gap his budgets seem to develop between the projected numbers and the reality as it unfolds. This budget too hinges on the official belief that the current crisis is necessarily a passing phase prompted by global conditions. He will be hoping there is no repeat of his 1997 experience when what was hailed as a “dream budget” turned into a nightmare.

Former Economic Times editor Narendar Pani is a professor at the National Institute of Advanced Studies, Bangalore; E-mail your columnist: narendar.pani AT gmail.com