Ending months of speculation about his health, finance minister and minister for corporate affairs, Arun Jaitley, on Wednesday, finally made his letter to Prime Minister Narendra Modi, open to all. The finance ministry was lately busy defending reports about Jaitley's ill-health preventing him from taking up full-time duties of the ministry. But even now, Jaitley, a close confidant of Prime Minister Narendra Modi through all of his troubled times, has only sought a pause from his government responsibilities.
During the last five years, North Block was infected by new energy. That of Arun Jaitley's constant endeavour to always keep up with the expectations and vision of Prime Minister Narendra Modi. While his first budget in July 2014-15 was targeted at the neo-middle class, his last budget of 2017-18 was aimed at the rural population—all in keeping with the various focus harboured in the first five years of the Modi government.
"He was a political visionary and knew how to balance the government's mandate alongside the political mandate," said Sanjeev Sanyal, principal economic adviser to the finance ministry, who had joined government service during Jaitley's tenure. According to Sanyal, Jaitley had targeted three priorities during his tenure. That of reducing inflation, the government's fiscal deficit and adhering to the current account deficit targets set under the Fiscal Responsibility and Budget Management (FRBM) process.
More or less in all of these priorities, and including that of driving growth beyond the five per cent rate witnessed in the last two years of the UPA regime, Jaitley had met and overcome all challenges with élan. Among his more daring tasks was that of getting the GST Bills and their respective constitutional amendments passed in the two houses of Parliament.
A seasoned orator and confident debater, Jaitley, recognised as the best parliamentarian during the UPA years in his role as opposition leader, had even courted controversy proposing the Aadhaar amendment bill as a money bill in Parliament. Jaitley's fire fighting skills were also on for display at the GST Council meetings, which he headed as the first Chairman for the indirect tax regulator.
Jaitley faced stiff opposition at the GST Council meetings from state finance ministers when Modi announced granting relief to consumers from a lower GST rate on restaurants and movie tickets. Next day at the GST Council meeting Jaitley was challenged by West Bengal finance minister Amit Mitra, that the prime minister cannot pre-empt the GST Council's decision and then expect the Council to simply ratify his decision. Jaitley, at this, spun a bit of humour and asked Mitra, if his government was against providing relief from higher GST rates as wished by the prime minister. This silenced Mitra. Jaitley had trumped over Mitra and other state finance ministers from Kerala and even Madhya Pradesh, who had initially opposed the introduction of the E-way bill system in inter-state movement of goods.
During his last budget, Jaitley faced the challenge of a slowing economy, and that of lesser numbers of jobs created. To ward off challenges in the economic numbers like these, Jaitley would rely on his biggest adviser in finance ministry—Arvind Subramanian—to justify government actions.
During the demonetisation exercise, Subramanian, the then chief economic adviser to the finance minister had therefore extolled only on benefits of the note ban exercise. "We have brought 80 per cent of the informal sector under formal scrutiny with only this one move," Jaitley argued at Parliament when questioned about the veracity of the move.
At other times when the government was at loggerheads with the Reserve Bank of India (RBI), public allegations were raised by RBI governors like Viral Acharya, that the government was attempting to usurp on the powers of the banking regulator. Even with the government facing strong public criticism and resistance from former RBI governor Urjit Patel, Jaitley had defended the government’s stand.
“Where is the confrontation?” Jaitley had asked journalists and those who questioned the government’s intervention in seeking additional revenue from its reserves created to prevent bad debt laden public sector banks from failing. “The government is well within its right when it asks the RBI to consider current priorities of the economy and revive the cycle of high consumer demand,” Jaitley said.
Ultimately, Jaitley had his say and replaced Urjit Patel, after a sudden exit with former revenue secretary Shaktikanta Das. Since Das’s elevation, the Modi government has found renewed peace with the RBI.
Perhaps the closest of all the finance ministry officials was former finance secretary Hasmukh Adhia. As revenue secretary, Adhia had been instrumental in aiding the transformation into the GST system of indirect taxing. Adhia was also on Jaitley’s speed dial after the demonetisation move of the government. Jaitley would be in close contact with Adhia and seek his support to meet the government’s tall spending budget on infrastructure and others. Keen to keep Adhia back, Jaitley had even offered the Gujarat cadre IAS officer an option to be in any position he wanted to be. Adhia, who held aspirations of becoming cabinet secretary to Modi, however denied to take any responsibility including the offer from Jaitley to take over as RBI governor after his retirement from the government.
Now, keen to focus on improving his health, Jaitley finally himself bids goodbye to his position of being the second most important man in New Delhi after Prime Minister Modi. The word in North Block is now that he would be mentoring the incumbent finance minister on a regular basis in the next few months. Finding his exact replacement could be a challenge for the government, though many like Piyush Goyal or Nirmala Sitharaman are his possible successors as finance minister in the second term of the Modi government.
Speculations are also rife that now the position of the second most important man in the government could fall on BJP party president and now cabinet minister, Amit Shah.
