Arun Jaitley vs Arun Shourie: Frontrunners for FM in Modi sarkar?

There is no ministry more crucial for the success of Narendra Modi’s government than the Ministry of Finance. The BJP has won a stunning mandate on a promise to revive the stalled economy. And five years from now, the government will be judged on its economic performance. So it’s hardly surprising that all eyes are on who Modi will choose for the important task. There has been plenty of speculation on who will be the finance minister: Arun Jaitley, Arun Shourie or Bimal Jalan/Deepak Parekh/Arvind Panagariya. Leave aside for a moment the individuals. The choice before Modi is this: appoint a professional politician, appoint someone who combines politics with obvious economic expertise or choose a hitherto apolitical technocrat. [caption id=“attachment_1534481” align=“alignleft” width=“380”] Bharatiya Janata Party leader and the next Prime Minister Narendra Modi is greeted by party leader Arun Jaitley. PTI[/caption] Each has its merits and pitfalls. In the end, some of the toughest and most important reform measures to revive the economy need immense political skills. Would not a hardened politician, like Arun Jaitley, be best positioned to get the Good and Services Tax implemented? After all, it would require someone with political stature to negotiate with powerful chief ministers, across party lines, driving a hard bargain. Would it also not make sense for a politician to persuade the country, with forceful articulation in simple language, about the need to prune wasteful subsidies? Remember also, that the BJP will not have a majority in the Rajya Sabha, so legislation will require support from opposition parties. Again, only a veteran politician would have the skills to acquire this support. A seasoned politician would also be able to crack the whip on cabinet colleagues who lobby for wasteful expenditures. Still, there isn’t an open and shut case for a professional politician to occupy the finance ministry. Could not someone like Arun Shourie, who has been in active politics (but no longer is) and who also has considerable domain expertise as a trained economist be better suited to the job? Perhaps someone who is not mired in partisan politics and whose outstanding reputation as a technocrat is better positioned to persuade chief ministers on the merits of the GST. Also, someone with some expertise in economics may be better placed to direct a cutting down in subsidies and reorientation of government expenditure. However, on legislative matters, the political weight of the prime minister may be required. But that disadvantage could be more than made up by the extra confidence such an appointment would inspire in investors, both domestic and foreign. The case for an outsider technocrat is based on the Manmohan Singh experiment of 1991. Of course Manmohan Singh wasn’t much of an outsider having been finance secretary, RBI Governor and Deputy Chairman of the Planning Commission. He knew the way government functioned. The chief argument against someone who doesn’t have extensive experience in government is that they won’t be able to navigate the byzantine world of politics and babudom. The main argument in favour is that a technocrat would not be burdened in any way by the need to appease particular interest groups or constituencies, a weakness of anyone in active politics. In a crisis, a technocrat backed by a powerful prime minister may be an option worth considering. But is India in such a crisis today? Not necessarily. Modi’s final decision may depend on how much of the heavy lifting on the economy he would want to do himself. If he wants to be hands on, he will appoint a technocrat. But a prime minister has several responsibilities, and Modi may not want to get tied down to the many battles the finance ministry will have to fight its way through, with other ministries, with states, with the bureaucracy. If that is the case, a politician like Arun Jaitley or a semi-politician like Arun Shourie is the likely choice and not a technocrat. Fortunately for all those with an eye on the economy, both the Aruns would be eminently suitable finance ministers.