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Thursday, Oct 17, 2019

The man who has heralded some of India’s top economic reforms

Political equations in the NDA may have changed over the years but Arun Jaitley is still the go-to man for PM Narendra Modi and Amit Shah. Arun Jaitley had stood by his two friends, and the two will stand by him till kingdom come.

opinion Updated: May 30, 2019 10:03 IST
Arvind Subramanian
Arvind Subramanian
Finance Minister Arun Jaitley
Finance Minister Arun Jaitley(PTI file photo)

The new government will have a new Finance Minister who deserves our best wishes for the challenging task at hand. At this transitional moment, I want to take the opportunity to express profound thanks for the Minister of Finance of the last five years: Mr Arun Jaitley.

My appreciation is both professional and personal. As I said many times when I was Chief Economic Adviser (CEA), Mr. Jaitley was a dream boss: non-interfering, trusting, encouraging, and protecting. From our first awkward meeting in the Defence Ministry in July 2014 to the last meeting via video when he was recovering from surgery, he never raised his voice, pointed a finger, or exercised power and hierarchy. And not because I never made any mistakes. I certainly did. It’s just that he had a very measured and positive way of asking for these mistakes to be addressed.

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Mr. Jaitley’s manner is so easy because he is totally comfortable in his skin. I never glimpsed vanity or edginess or the other manifestations of a prickly ego, which are almost occupational prerequisites for a politician. As a result, staff of the Ministry of Finance actually looked forward to meeting him, knowing that they could explain their positions forthrightly, without the risk of put downs, beratings, or humiliations.

Mr. Jaitley is humane and kind, ever willing to help, on matters both big and small. He wanted to extend the legendary Jaitley generosity as widely as possible, for this was part of his DNA.The Jaitley mystique, of being the best-connected man in town, holder of the darbaars of who’s whos, friend to all enemies is , I suspect, founded on and reinforced by the help that he extended to all those he knew (and the countless that he did not), and by the fact that there are few in Delhi who are not beneficiaries of the Jaitley largesse.

I recall vividly asking him for assistance when my staff needed medical help. With alacrity and enthusiasm, he would pick up the phone and talk to his doctor friends. And later he would follow up, to check on the health of my colleagues.

I also remember seeking his help to get accommodation built for junior officers of the Indian Economic Service (IES), who live for up to 15 years of their early career in transit housing in New Delhi. He was visibly moved when he saw pictures of the shabby apartments that professionals serving the nation were forced to live in; when they told him how embarrassing it was to have family see them in such accommodation. And then he acted: he intervened personally and repeatedly with the then Urban Affairs minister to ensure that land was allocated for the IES so that new housing could be built.

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Stories of Mr. Jaitley as foodie were legion when I arrived in Delhi. It was sad therefore to see him, more recently, fulfilling his daily protein requirements by forcing down a few slices of paneer or a simple boiled egg. Often, Gopal—his Man Friday and a character who could be the subject of a Bollywood biopic—would try and replenish the plate as if he were serving the old Arun Jaitley, only to be fended off with an irritated reminder.

It seemed that the irritation was aimed less at Gopal and more at the reality of his own changed circumstance. However, that Mr. Jaitley could not slake his own appetite did not stop him from holding forth on India’s cuisines or from enthusiastically ordering for me the best chhola bhatura or butter chicken in town whenever he could.

History will render its own verdict on Mr. Jaitley’s performance as Finance Minister between 2014 and 2019. But historians should be warned: many of his achievements were not easily visible. Consider the government’s response to the recommendations of the 14th Finance Commission chaired by Dr. YV Reddy, which envisaged a radical decentralization of fiscal resources.

Very influential people argued that the recommendations would constrain the Centre, and thereby backfire on it. But Mr. Jaitley responded that the Finance Commission’s views should be respected, because the institution has served India so well for so many decades. And his persuasive skills carried the day.

In addition to Mr. Jaitley’s behind-the-scenes accomplishments, his guiding hand and legal mind were responsible for some major legislative accomplishments: the GST, the Bankruptcy Code, the real estate bill, the establishment of the Monetary Policy Committee (MPC).

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Perhaps the biggest of these accomplishments was the introduction of the GST. Yes, there were flaws in design and implementation. Even so, the GST was an astonishing accomplishment: an achievement of political consensus building in a difficult, fractious democracy; an achievement of administration, in which the tax departments of the Centre and the states worked together to create one tax; and an achievement of technology, in which new systems were created, integrating many diverse ones, making the taxpayer-tax authority interface more seamless.

None of this could have happened without the dedication and goodwill of many people, from state governments to central civil servants (most notably, then finance secretary Dr. Hasmukh Adhia). But the key driving force was Mr. Arun Jaitley, who somehow managed to bring together all the different political factions, economic interests and idiosyncratic personalities, and get the Constitutional Amendment and the GST bill passed.

Perhaps as important, Mr. Jaitley created the vital institutional/cultural precedent of decision-making by consensus in the GST Council, building on the tradition created by Yashwant Sinha in his Empowered Committee of State Finance Ministers. Sometimes, I used to wonder whether Mr. Jaitley was being excessively democratic, because allowing everyone in the GST Council to express their views made for painfully long and tedious meetings. I often wanted him to intervene more forcefully to end the discussion. After all, hadn’t Clement Atlee famously said that “democracy as discussion only works, if at some point people stop talking?”

But he was more patient and wiser than me. Now, it is clear that Mr. Jaitley’s efforts will have a lasting, durable impact because he created a strong, democratic institution that will outlive the individuals who created it.

I have long felt that Mr. Jaitley is not given enough credit for getting the GST done. But it strikes me even more today that he does not really care: what mattered to him was the achievement, not who got the credit.

Of course, Mr. Jaitley had his detractors, and of course his record is not unblemished. But in politics show me a man who has no critics, who has made no mistakes, and I will show you a leader who has accomplished nothing.

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There is a similarity between Dr. Manmohan Singh and Mr. Jaitley in that both were in politics without a large electoral base of their own. The conventional view is that this weakened them as leaders within government and party. But both had, in their own ways, a lot of de facto clout within their own parties: in Dr. Singh’s case stemming from his personal aura of integrity and for having been the architect of the 1991 reforms, and in Mr. Jaitley’s case from his competence, his legal background, his parliamentary skills, and his ability to bring people together.

The open and fascinating question for history is how empowered they themselves felt and whether they might have acted as if they wielded less power than they actually did.

To contemplate a government, and a cabinet that will be Jaitley-less, without his wisdom, judgement and moderating influence, gives a sense of his contribution and importance. Articulate, brilliant master of the brief, the shepherd of many a parliamentary effort, the man who birthed the GST, but above all, the humane, helping and helpful leader and politician — I, but more important, the country will really miss you, Mr. Jaitley.

(The writer served as Chief Economic Advisor to the Government of India and is currently a visiting lecturer at Harvard University and a non-resident senior fellow at the Peterson Institute for International Economics.)

First Published: May 30, 2019 07:54 IST

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