It was a rare evening when finance minister Arun Jaitley and his immediate predecessor, P Chidambaram, came together to candidly reflect on the 2014 elections, Congress’ mistakes, BJP’s successes, and the state of the economy.
Among other issues, Jaitley said the government would “doggedly pursue reforms” – but made it clear that the easier ones to implement would happen first. Chidambaram implored the NDA to reverse retrospective taxation introduced by his own government, and said that UPA should have cancelled the 2G licences on its own without waiting for a court order.
The occasion was the launch of senior television journalist and HT columnist Rajdeep Sardesai’s book 2014- The Election That Changed India.
Stating that his agenda was clear for the next two years, Jaitley said there was a renewed buzz about India and international investors were enthusiastic.
“We will doggedly pursue reforms,” he said, but added that there were different kinds of reforms – the ones easy to implement, the ones which needed larger consensus, and the difficult ones within the current realpolitik framework.
“You have to survive to reform. Reforms which are difficult and can create a confrontation in society…can happen at a later stage in government.”
Jaitley was responding to the perception that the government was not using its massive political capital to push early reforms. This approach, he said, was better than “pursuing confrontation and then saying we can’t do it.”
Chidambaram took issue with the FM, and said he felt “let down” that the government had not reversed retrospective taxation – which Jaitley was quick to point out was a problem of UPA’s making. “If I had 282, I would have done it,” Chidambaram said.
The former finance minister accepted certain things could have been done differently by UPA. “On 2G, the PM could have put his foot down and said we will not allow the first come, first served route or when the issue emerged, the government could have cancelled licences.”
Chidambaram said he had made such a suggestion in government “informally, in group and committee meetings” that this would be wiser than waiting for the court judgment, which was “damaging”.
He said that the government, maybe, held back because there was a perception this may drag it into numerous litigations with licence holders. “But I believed it was a simple decision...it might have contained the damage considerably.”
Looking back at the elections, Jaitley said this was a markedly different poll as it reversed the assumption that the era of tall leaders, of single-party majorities was over. “Traditional trends did not work. Parties which relied on caste loyalties did reasonably badly. And parties which relied on charisma of leaders, dynasties also did badly across the country.”
Chidambaram was also willing to credit the vigour of Prime Minister Narendra Modi’s campaign. “Modi brought qualities which enhanced the scale and magnitude of BJP’s victory.”
But he said that if the UPA had been able to bring back the economy on track by 2013-14, the results would have been different – “even though BJP would still probably have been the biggest party”.
“The consensus worldwide was the answer to the great recession was Keynesian economics, spending money. We had three consecutive stimuli packages. This breached all limits of fiscal deficit, revenue deficit, inflation," Chidambaram said.
The government had been unable to recover from this period, with adverse global economic events making the task more difficult, he added.
The conversation, moderated by journalist Karan Thapar, was laced with wit – when the two leaders traded accusations about which party had opportunistically changed their positions on raising FDI insurance caps depending on whether they were in government or opposition; or when Chidambaram said that Jaitley’s advice to the CAG not to sensationalise had come a “bit late”.
In his wide-ranging book, Sardesai has documented the impressive backroom strategising of the Modi team as well as the PM’s energy, while tracing the many missteps of the Rahul Gandhi-led Congress campaign.