In Tweedledum Vs Tweedledee, Jaitley gave the game away to Chidambaram

Last night (7 November) one waited eagerly for fireworks to erupt as Headlines Today lined up two finance ministers - one present and one past - to spar in what was billed as “The Clash of Titans”. Organised in the context of a book on the 2014 Lok Sabha elections - a cracker of an election - by journalist Rajdeep Sardesai, the battle turned out to be a friendly sparring match between Arun Jaitley and his predecessor P Chidambaram.

Both were apparently a bit nervous, given that the journo anchoring the show was Karan Thapar, who is not known to beat around the bush or try and be too soft on anyone. While Jaitley sat through the debate with a near-perpetual frown on his face, Chidambaram appeared cool, but underneath the easy faade he was often seen restlessly flapping his fingers.

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Much was expected from the verbal bout, as both men are articulate and masters of the art of the debate. But the “Clash of the Titans” turned out to be a pillow-fight on a mattress between Tweedledum and Tweedledee. If Chidambaram had been the current finance minister and Jaitley that of the UPA, you wouldn’t know the difference. Both of them tried hard to avoid punching the other anywhere it hurts, and the occasional mistimed jab was quickly deflected.

Jaitley set the tone for non-lethal sparring when he denied saying he had inherited an economy in “shambles”. He refused to accept the word and said he meant he had inherited a “challenging” situation - which a happy Chidambaram was glad to concede, pointing out he too had inherited a challenging economy in 2004.

Even when the anchor repeated the word “shambles” to goad Jaitley into the ring, he jumped out of it into a non-combat zone. He weakly tried to counter Chidambaram by saying the Vajpayee government had left behind a fast-growing economy, but his opponent deflected this minor thrust by saying he inherited an economy that grew at an “average” of about 5-5.5 percent. By talking averages, Chidambaram also cleverly avoided having to acknowledge the reality of the legacy he himself left behind: an economy that was growing below 5 percent in the last two years of his stewardship of North Block. Chidambaram was too clever for Jaitley in this round.

Overall, Chidambaram won on points, and quite clearly his mastery of words and experience of running the finance ministry for nearly a decade (over three different periods) and by presenting nine budgets, showed through. Jaitley is nobody’s fool, but his unwillingness to wound or confront his opponent showed him up as relatively less experienced novice.

If the economic debate was insipid, the political part of it elicited more than passing interest, and here Chidambaram offered views that made the headlines today (8 November). Manmohan Singh, he said, could have stopped A Raja from issuing the telecom licences (later cancelled by the Supreme Court), but Jaitley failed to point out Chidambaram’s own role in the 2G spectrum controversy.

In a letter to the PMO in mid-January 2008, just days after Raja went ahead and issued the 2G licences, Chidambaram himself suggested that Raja's allotment of spectrum at 2001 prices should be treated as a "closed chapter." Nor did Jaitley point out that the spectrum could have been cancelled even till end-February. In fact, a later note from Pranab Mukherjee’s finance ministry said both Manmohan Singh and Chidambaram could have stopped Raja. Raman Kirpal wrote in _Firstpost_ at that time: “Both Chidambaram and Manmohan Singh were in position to stop Raja from signing the deals as the latter had only issued 122 letters of intent (LOIs) on 10 January 2008. The licences were still to be given. But given the silence of the Prime Minister, Raja went on signing licence agreements on the basis of the 122 LOIs even a month after Chidambaram’s note to the Prime Minister.”

Jaitley also failed to point out that Chidambaram himself cleared the high-premium sale of shares by Swan Telecom and Unitech to foreign partners when their only asset was the cheap spectrum allotted by Raja. This clearly established the fact that spectrum was sold for a song - and thus the Raja decision prima facie mala fide.

Quite clearly, Jaitley was unwilling to take the fight to Chidambaram, and the latter won by default.

Even on the issue of retrospective taxation of Vodafone, another UPA legacy, Jaitley took a blow to the head and failed to give it back. When the anchor pointed out a claim in Sardesai’s book that Pranab Mukherjee introduced the retrospective tax almost without consulting Manmohan Singh, Chidambaram got away by saying he was in the home ministry at that time, and made a general observation that the budget is usually decided between the PM and the FM, with the rest of the cabinet having almost no role to play in it.

Chidambaram even claimed the high ground by saying that if had had 282 seats in parliament, as the BJP did now, he would have repealed the retrospective law. Jaitley said little, embarrassed by this point, but he could have asked why Chidambaram didn’t do so when he had the chance in 2013. It is not as if the UPA had a problem with passing any budget in any of its 10 years in power. Jaitley allowed him to get away with the claim that he could not change the law in the 2013 budget as he would have been accused of selling out to Vodafone. This is, of course, hogwash. Chidambaram planned to push key proposals through even in the 2014 interim budget. It wasn’t as if he could not have modified the retrospective tax without a majority in parliament.

To make matters worse, Chidambaram even rubbed it in by congratulating Jaitley for asking the Comptroller and Auditor General (CAG) to stop making sensational statements, saying this advice to the CAG was good though it had come a bit late. By making this statement to a CAG conference, Jaitley effectively allowed the Congress party - which has always been anti-CAG for showing up its lapses in CWG, 2G and Coalgate - to claim victory.

What the debate proved was that there was very little to choose between Chidambaram’s world view and Jaitley’s, and that both are part of the Delhi insider consensus on economic policy and centrist politics. Neither wanted to show up the other, thus giving credence to the oft-repeated claim that the NDA was little more than UPA with “saffron lipstick” - the latter remark being made on Swaminathan Anklesaria Aiyar in the context of Jaitley’s 2014-15 budget last July.

In many ways, Jaitley has been Narendra Modi’s go-to man. He has been the most powerful minister in the cabinet (a position that could change with defence now set to go to Manohar Parrikar) both because he has been a strong defender of Modi in regard to 2002, and also because he is Modi’s channel to Delhi’s elite.

But this is a double-edged sword. Jaitley’s acceptability in Delhi’s power elite both helps and hinders Modi’s agenda of bringing about a change in power structure. It helps by giving Modi an inside access to Jaitley’s connections, but it probably hinders more by making the NDA seem like nothing more than UPA with more effective Prime Minister.

If the attractiveness of Modi to voters is that he is an outsider to Delhi and can thus be trusted to uproot the old cosy Delhi consensus and shake things up, Jaitley is his Achilles Heel. He is part of the old establishment in more ways than one.