Arun Jaitley worked without any sentimentality; his legacy lives on

The 2014 Lok Sabha elections represented the first Modi wave. Arun Jaitley was fielded as the BJP's Lok Sabha candidate from Amritsar in Punjab. The Congress was in a decrepit state, but fielded the Maharaja of Patiala, Amarinder Singh, against Jaitley. At the height of the Modi wave, contesting a seat vacated for him by the wildly popular Navjot Singh Sidhu (who was in the BJP at the time), with the Akali Dal working for him overtime, Jaitley still lost.

Jaitley was sitting in his room in the Rajya Sabha hours after his defeat when BJP colleague Sudhanshu Trivedi walked in. Trivedi has an MSc in physics and is an astrologer. Jaitley look at him and said: “Bata nahin sakta tha ki main haarne wala hoon?” ("Couldn’t you have told me I would lose?")

Trivedi squirmed a bit, the phone rang and Jaitley picked up. He looked at the reporters gathered there and said abruptly: "I have to go."

The call was from the prime minister’s secretariat. That evening, Prime Minister Modi called on Jaitley at his residence and requested him to join his cabinet. “How many people do you know who have lost the election but have been made cabinet ministers after the PM personally went to their home,” asked a friend of Jaitley’s, who was an official in the Vajpayee government. Jaitley became Finance Minister.

Jaitley could not have known that the Prime Minister’s Office (PMO) would micromanage the Finance Ministry to the extent that it did. If truth were told, it was all a bit disappointing for him--and his admirers--that he did not really get the chance to reveal the full extent of his capacities. But he used his talents in other ways. A top bureaucrat in PMO once said that he really didn’t know how the Modi government would have functioned in the initial years if Jaitley had not been part of it. Jaitley brought to bear his understanding of finance and law to advise the government on many mines in the field. He spotted in Pranab Mukherjee’s Finance Bill in 2012, a mention buried in the fine print that the government would bring in retrospective taxation effectively amending the Income Tax Act, 1961, but he did not reverse the provision.

Later, speaking on the issue in the Rajya Sabha, he said: “Sir, I have said this in this House earlier, and I am saying it again. The Finance Minister in his Budget speech at page 7 has spoken in terms of providing tax certainty. He says this in the context advance pricing agreements. Now, tax certainty is essential for any taxation planning. When investors come in, they must know how much tax they are going to pay if they earn money. When a domestic investor takes up a project, he must know for what period he has a rebate and for what period he has to pay. Finance Minister after Finance Minister have resorted to this concept of retrospective planning. You are not the first one, and you will not be the last one.

But I think at some stage we must consider it. In this modern age of tax planning, is it fair to impose taxes retrospectively or change legislation retrospectively? Assessments have been closed. People have planned their business and their personal income accordingly.

Therefore, from the point of view of an investment environment, both domestically and internationally, this is an issue which is not sending the correct signal.”

Minister and politician

Jaitley fell grievously ill but Modi retained him as his Finance Minister. In that capacity Jaitley stayed as a permanent fixture though others came and went: Manohar Parrikar, who as defence minister had serious differences with Jaitley on One Rank One Pension (OROP), left for Goa as chief minister and Rajnath Singh was moved to defence from home.

Jaitley’s record in politics was mixed. Few remember that as general secretary of the party in 2003 he handled several elections. He never won a Lok Sabha election himself. In states under his charge that had had a BJP presence from before, like Madhya Pradesh, Gujarat and Himachal Pradesh, Jaitley almost invariably delivered a victory by influencing both the choice of candidates and the campaign.

In Karnataka, he took over charge when the party was on the rise and needed just that one push to win on its own in 2007.

But in states where the BJP had very little to call its own in electoral terms, the party stayed pretty much where it was. Jaitley did the best he could when he was appointed to oversee the West Bengal assembly elections in 2006. In the 2001 assembly elections, the BJP got 5.1 per cent of the votes but got no seats. In 2006, the seats were still zero but the vote share went down to 1.93 per cent.

Jaitley’s most spectacularly managed election was the BJP’s result in Jammu in the 2008 assembly elections in Jammu and Kashmir. In the 2002 assembly elections, the BJP won just one seat. In 2008, it won 11. This was because the party recognised the Amarnath Shrine Board agitation, which was run from Jammu, as an issue of discrimination against the region rather than a religious matter. Jaitley gave this edge to the election campaign.

In states where the BJP was the junior partner, like Bihar and Punjab, he managed allies realistically. His practice prompted many in the BJP to grumble that he favoured the allies over the BJP. In fact, this was just a recognition of the BJP’s strengths and weaknesses without being clouded by sentimentality.

Finance Ministers in any government are crucial but Arun Jaitley’s credentials were much more than being just Narendra Modi’s Finance Minister. He was an enabler who tolerated the Prime Minister's tendency to micromanage and yet steered him in the direction he ought to go. Jaitley was the PM’s conduit to the Delhi chatterati: a group Modi didn’t particularly care for but knew he has to keep on the right side of. Jaitley’s stamp was very evident on the National Democratic Alliance’s first council of ministers. His legacy lives on--to some extent--through them.