Fixing The Cabinet

Prime Minister Modi needs a new finance minister.

Labelling Arun Shourie as a “fair-weather friend” is easy but it is difficult to fault his analytical criticisms of the Narendra Modi government, especially as they follow a pattern first established by this magazine [Newsinsight]. In this context, the two-part commentary, Modi’s troubles -1 and Modi’s troubles-2, are instructive. Prime Minister Modi’s problems root on three persons, and if he has to stay on top of the political situation, he must find ways and opportunities to move around or drop Arun Jaitley, Amit Shah and Smriti Irani. The time to indulge them is over.

Arun Jaitley is an absolute disaster as Union finance minister. Regular Newsinsight readers would note this view was not formed recently but tacked with Modi’s earliest decision as prime minister to give finance to Jaitley. It has always been held by this magazine that Jaitley is a P. Chidambaram clone and equally mediocre. He was a hopeless defence minister who was impatient with file work pertaining to that ministry and the timely induction of Manohar Parrikar plugged a vital gap. Jaitley has now proved unsuccessful with the finance portfolio as well. Any growth that has happened with the economy comes with the feel good factor generated by Prime Minister Modi and does not reflect, inter alia, in industry earnings that have been so poor as to pull down stock markets for more than a month now. Unless the economy actually and rapidly grows, Modi can commence feeling nervous and insecure about re-election in 2019.

If he desires a contrary narrative of strong, sustained growth, he must replace Jaitley at finance with a technocrat. The governance model of a political prime minister and a technocrat finance minister brought to fruition the 1991 reforms. The mistake was to make a technocrat like Manmohan Singh prime minister. He knew what was wrong but couldn’t fix it because politics was controlled by Sonia Gandhi who followed her own agenda. It will equally fail if Modi who is not a trained economist persists with Jaitley who is neither an economist nor a mass politician but that peculiar creature called a “networker” that Delhi has an unceasing and voracious craving for. Jaitley’s claim to fame is that he is the “biggest gossip in town”. What an extraordinary reputation to have.

Who should be the technocrat to replace Jaitley as finance minister? Someone with the stature of Manmohan Singh but young and dynamic as the present Reserve Bank Governor, Raghuram Rajan. Perhaps at the end of his second term, should he pass that milestone, this writer would recommend Rajan as finance minister. But he is a good benchmark for any technocrat being considered to replace Jaitley. This technocrat should instantly be able to calm markets and foreign and domestic investors, win the trust of the country to the growth-oriented running of its complex economics, impart direction to economic affairs, create conditions for speedy industrialization and wealth-creation, and deliver on high job-creation targets. Arun Jaitley has failed on all these parameters; the mainstream media is too beholden to him to write the truth.

The story emerging from government is that Arun Jaitley does not keep well despite undergoing a bariatric surgery some months ago. He is not attentive to files and does not care for details. He trusts to the judgment of subordinates which makes him and his ministry over-bureaucratic and risk-averse. Prime Minister Modi is bringing trusted Gujarat-cadre officers to the Union finance ministry presumably because Jaitley is not up to speed but this can only be a stopgap measure. There is no alternative to a trained economist as finance minister and the sooner Modi proceeds on this, the better.

Dropping Jaitley from the Union cabinet will be difficult for Modi nevertheless so shifting him to a less demanding portfolio would be better. He would not consent to take human resources development (HRD) because it would eject him from important cabinet committees and downgrade him besides rivals like Rajnath Singh and Sushma Swaraj. Rajnath Singh understands mass politics better than Jaitley and would make for a more appealing Bharatiya Janata Party president than Amit Shah who has been disastrous for the party since Modi turned fulltime attention to the prime ministry. If Modi feels confident to make Rajnath BJP president, Jaitley could be moved to the home ministry, where his lawyerly training could be put to some use.

This leaves to fix Smriti Irani and her controversial tenure as HRD minister. A minister who remains perpetually embroiled in controversy ultimately cannot do justice to his or her work. Irani has shown no vision and needs to go. A good candidate to replace her is Sushma Swaraj who may agree if the HRD profile is raised as it was in Murli Manohar Joshi and Arjun Singh’s tenure. Until Modi gets a good replacement for Sushma Swaraj in external affairs, he could manage it with competent junior ministers and the able Foreign Secretary, S. Jaishankar. In any case, Modi does most of his own foreign policy-making. There is no timeline within which Prime Minister Modi should reshuffle his cabinet, but it would be a good way to mark one year of his government.

The views expressed here are the personal views of the author. They do not necessarily reflect the views of Swarajya. 

This piece is published with the permission of, and in collaboration with, www.newsinsight.net