Jaitley In The Eye Of A Storm: Why Modi Has No Option But To Stand By His FM

Modi does not gain anything politically by letting Jaitley take the rap or lose too much by investing political capital in standing by him.

With allegations flying thick and fast around his Finance Minister, both from strong political rivals and from party detractors within, Prime Minister Narendra Modi faces a double or quits moment. Should he double the political capital invested in Arun Jaitley when the budget is just two months away, or cut his losses?

To combat the aggressive allegation-mongering by the Aam Aadmi Party (AAP), Jaitley has, correctly, chosen to go to court with a defamation suit. It is equally obvious that the allegations have been prompted by politics – as someone close to Modi, Jaitley is the obvious one to attack in the government.

It is also more than likely that none of the allegations against Jaitley will stick – they never have against almost any politician. The charges of corruption and “irregularities” in the Delhi District Cricket Association (DDCA), with whom Jaitley was associated for long till 2013, are unlikely to find a direct connect to the Finance Minister. Reason: as someone who knows the law, he would not have been foolish enough to taint himself with any wrongdoing, though there is always the possibility that he may have known what was going on.

However, Jaitley’s dilemma is the same as Manmohan Singh’s. It is nobody’s case that Singh made a rupee out of any of the myriad scams tumbling out of his ministry’s closet, but the fact remains that he presided over them like the blind king Dhritarashtra. Singh’s stature has not recovered from this implied taint. Jaitley is in the same boat.

For Modi, thus, this is going to be a difficult one to decide. For many reasons. Jaitley is part of the three-man power troika at the top of the government, and effectively the No 2 in government. The two men also seem to share some trust, going back more than a decade. Changing FMs so close to the budget is also a no-no, though how much impact FMs actually have on the budget, which is largely constructed by bureaucrats upto 90 percent of the proposals, is anybody’s guess.

Plus there is the point that the BJP has not had a good record fighting its rivals politically whenever its own leaders are targeted. Far too often, it has sacrificed key political leaders – from Bangaru Laxman to BS Yeddyurappa to even Nitin Gadkari – for little gain politically or in terms of public perceptions about probity. So sacrificing Jaitley on an allegation that will probably never be proven makes no sense.

However, there is also the other side of the argument. Will persisting with Jaitley do more damage or less to Modi’s anti-corruption image? Will sacrificing him do more damage than protecting him? Here, game theory enters the picture. In deciding on Jaitley, Modi will have to calculate how far his political rivals – especially the Congress – will push politically on Jaitley, given that the Gandhi family itself is embroiled in the National Herald scam.

In game theory, you have figure out what is opponent is likely to do, and how he will react to your own expected moves. If you guess wrong, you lose; sometimes both may lose for having misjudged what the other will do.

As far as Arvind Kejriwal is concerned, given his pathological need to show himself as the last honest man in India, one can be sure that he will not pull back. But Jaitley is not worth sacrificing for a Delhi CM. It is best to brazen it out. Kejriwal is more likely to over-extend himself and ruin his own credibility in the long run. He is too obsessed with himself.

But what will the Congress do? On Monday (21 December), it was happy to haul the government over the coals, using Jaitley detractor and BJP MP Kirti Azad as its battering ram. Will it go all out against Jaitley, or just be happy to do some political damage and withdraw?

Given the number of skeletons in the Congress cupboard, including the latest National Herald case, the chances are that it will not push beyond a point.

Moreover, Jaitley is a Lutyens insider, with friends in Congress and beyond. The Delhi media eats out of his hands. The DDCA affair is a cricket scam, and in cricket scams, all politicians are in it together, even though they develop temporary alliances to oust someone who becomes too powerful – as had happened with former IPL Commissioner Lalit Modi. So one can count on Sharad Pawar or Rajiv Shukla, one a Congress ally and another a dyed-in-the-wool Congressmen, to help Jaitley covertly, if not overtly.

So the conclusion is simple: Modi does not gain anything politically by letting Jaitley take the rap or lose too much by investing political capital in standing by him.

The real issue though relates less to politics and more to economics, where Jaitley has not set the Yamuna on fire with this budgets or stewardship of the finance ministry.

What Modi needs to do is to create a super-czar in the PMO who will take a close look at what the finance ministry is up to. He should also completely revamp the bureaucratic team in the ministry, which is now of mediocre talent. And, of course, he can give greater autonomy to the junior ministers, especially talented ones like Jayant Sinha. If Jaitley is ring-fenced with competent people all around him, Modi might still pull off a robust economic recovery and deliver good budgets in the remaining years of his government. The NDA’s third budget has to be a cracker – and Jaitley has to deliver on that after two flops. This should be Modi’s primary goal in backing jaitley.