The Jaitley era

The late Union minister Arun Jaitley will be remembered by his friends, colleagues, and the nation at large for many things. Apart from being an eloquent orator, a skilful strategist, and an erudite lawyer, Jaitley, an ultimate Delhi insider with friends across the political spectrum, was an outstanding bridge-builder among the current generation of leaders. He was also a man who touched the lives of most with whom he interacted. Therefore, it is not surprising that he was the go-to man for the Bharatiya Janata Party and Prime Minister Narendra Modi on a variety of issues. His interventions in Parliament during the first Modi government were not limited by the portfolios he was handling. Even when his health failed him and he could have only a handful of visitors, he explained the rationale for important government actions through his almost-daily blogs.  

While Jaitley had a distinguished career, both as a lawyer and parliamentarian, his most important assignment was as finance minister in the first Modi government. After a near balance of payments crisis in 2013, the Indian economy was not a in good shape when the Modi government took office in 2014. Several reforms were implemented during Jaitley’s term as finance minister. For instance, following the recommendation of the Fourteenth Finance Commission, the government increased the devolution of tax resources to states. This not only enhanced the ability of states to spend but also strengthened India’s federalism. Jaitley took this forward and brought state governments on board to implement the much-awaited goods and services tax (GST). One of the finest examples of Jaitley’s political acumen was the smooth functioning of the GST Council, which has become a model for Union-state cooperation with every decision taken through consensus. The other stellar piece of reform that Jaitley introduced was the implementation of the Insolvency and Bankruptcy Code, replacing the earlier ineffective systems. Although cases are getting dragged, the recent amendments will help time-bound resolutions of bankruptcies. This will improve credit culture in the economy and lead to a better allocation of resources.

Another significant reform during Jaitley’s term was the monetary policy agreement with the Reserve Bank of India and the adoption of the inflation-targeting framework. Inflation targeting has helped contain inflation and inflationary expectations. It also helped that the government brought down the fiscal deficit over the years. However, Jaitley’s finance ministry had its difficulties in dealing with the central bank. This was one of the reasons why Raghuram Rajan was not offered an extension as governor. Also, Jaitley blamed the banking regulator for the non-performing asset (NPA) problem, which was contested by Dr Rajan’s successor, Urjit Patel. The relation only deteriorated from there and resulted in the exit of Dr Patel. Some of the reform measures, such as the GST, are still a work in progress, and he has been criticised for hurrying them through without proper planning. But it is perhaps not being fair to the man as a perfect GST from the word go is an impractical idea.
But Jaitley’s life was much more than his term as finance minister. In his loss, the BJP has lost its finest strategist and the nation a humane political leader. He has, unquestionably, left a void in Indian politics and public life which would be difficult to fill. Jaitley, a cricket enthusiast, was ultimately stumped by his health and left the field too early in the game.