Budget 2016 May Be Arun Jaitley's Best Chance to Overcome His Underperformer Image

If Arun Jaitley is the symbol for the underwhelming performance of the Modi government, Budget 2016 is most likely his last chance to redeem himself

Arun Jaitley, once  a key LK Advani  protégé, Delhi-based and supremely well-connected, is still the least rickety bridge between the old BJP, led by  the octogenarian Advani, and the brave new BJP, epitomised by the outsider from Gujarat.

This, even though Jaitley is thought to be Modi’s most trusted lieutenant, even as Modi’s own relationship with Advani is seen to be reasonably adversarial. Obviously, it takes great skill and tact to ride these very contrary horses at the same time, but, in a sense, this is precisely what makes Arun Jaitley what he is.

But today it is not his political survival skills which are being questioned, but his curious lack of achievement in governance, despite all the power, prominence, and connections at his command.

Jaitley was a greatly valued insider under Advani, as a General Secretary of the BJP, and then as the articulate but obstructionist Leader of the Opposition in the Rajya Sabha between 2009 and 2014. He was hand-picked for the role by Advani, who also appointed another protégé, Sushma Swaraj, to lead the opposition in the Lok Sabha.

Jaitley’s pre-eminence lasted throughout the 10 years in the opposition, including the sadly flubbed 2009 election. And before that, in the Vajpayee administration, he also held several  prominent ministerial berths—Law & Justice, Company Affairs, Commerce & Industry.

Narendra Modi, however, was the one who secured the 2014 general election—some say, single-handedly—helped, of course, by his trusted groundsman Amit Shah, now President of the BJP.

And soon after Modi formed a government, he relegated the Advani brigade to the sidelines, putting the elderly amongst them in the advisory Margdarshak Mandal, and the younger ones in their camp out to pasture.

This internal exile, however, has provided a recurrent fault line in the ruling party, that erupts into sniping and dissidence every chance it gets, much to the delight of the opposition. And there are those who are looking for opportunities to play ducks and drakes in this matter.

But the eternal insider at Modi’s side, the suave and articulate Arun Jaitley, has meanwhile, not exactly covered the government in glory, even as 2016 will mark the half-way point for his term.

If the performance of Modi’s administration is seen as lacklustre, Jaitley is being increasingly blamed for it. Not only has he delivered two unexciting ‘babu budgets’, while presumably preparing a better third, none of his vaunted networking skills have done much for the government, either inside parliament, or outside.

This is surprising, given Jaitley’s impressive track record, particularly as a negotiator and backroom strategist in a number of successful state elections over the years, including those won by Modi in Gujarat.

And while the government has been receiving unfair and propagandist brickbats for its alleged ‘intolerance’, especially during the Bihar Assembly elections, Jaitley has emerged from that debacle to begin ploughing his own personal furrow.

He has, of late, begun projecting himself as a liberal, at variance with his party line, with regard to his view on the lifting of article 377 in favour of the LGBT community, calling the present position ‘anachronistic’. He also wanted the reform of film censorship into mere certification, airing his views some time before Shyam Benegal was asked to look into the role of the censor board. This suggests, if only by implication, that it was Jaitley, rather than Modi, who is behind the reformist and liberal move.  Of course, the decision could have been arrived at collectively by the Cabinet too.

But why is Jaitley positioning himself to appeal to a wider political audience beyond the confines of the BJP and the RSS, even though he originally cut his political teeth in the Hindutva-loving ABVP? And why at a time when his own performance in government has been criticised in the media for being average at best?

There are also controversial Wikileaks revelations that Jaitley wants to avoid a probe into the murky finances of the pro-Congress NDTV, even though they have been recently appeared in a detailed expose in Caravan magazine.

And now Delhi Chief Minister Arvind Kejriwal, and BJP’s own suspended leader from Bihar, Kirti Azad, probably for their own reasons (political expediency and dissidence respectively), have managed to suggest that a lot of the corruption that went on in the DDCA when Jaitley was chief, was done with his knowledge and tacit concurrence, even though they don’t go so far as to suggest he or his family benefited financially from any of it.

Jaitley has reacted sharply to the slur by slapping both a civil and a criminal suit on Kejriwal for defamation, while seeking massive damages. Meanwhile, a probe ordered by Kejriwal under the Delhi government and headed by Gopal Subramanium has been declared illegal by the central government.

The quick-witted CPI(M) chief  Sitaram Yechury has made it known that he thinks Modi wants Jaitley to resign till his name is cleared. Modi himself has only said he expects Jaitley to come out of any probe or investigation with ‘flying colours’ as Advani himself did, in the long-ago Jain hawala scam.

However, it remains a mystery why, as the virtual and de facto No 2 in the government, with extensive experience in governance, straddling the highly visible and important ministries of finance and I&B, Jaitley has not managed to carry forward the election-time dynamism projected by Modi. He was also, till Manohar Parrikar was prised loose from Goa, the Defence Minister for some months, again performing there ‘part-time’ and without any special distinction.

Jaitley has also failed to obtain favourable media attention for the Modi administration, the BJP, or its affiliates, including the RSS, in his I&B role. This, despite his wide media contacts, particularly amongst the hostile ‘Lutyens media’, built up over many years.

Perhaps, some say, Jaitley has too much on his plate altogether, given his indifferent health. Jaitley is seen to be a smooth English-speaking Lutyens Delhi insider, with elaborate contacts across political parties, business, industry, the media and the legal fraternity, to which he still belongs, as a Senior Counsel.

Jaitley practiced law in the High Courts and the Supreme Court till 2009, representing a galaxy of political heavyweights cutting across party lines, and also a plethora of large Indian and multinational corporations. All these contacts, built up over several decades, should have smoothed the way for the Modi government, but they most certainly have not. Instead, Jaitley’s legacy of obstructionism as leader of the opposition in the Rajya Sabha during the UPA rule, has come back to haunt the current administration, and wreak vengeance on its legislative agenda. Congress calls it paying the BJP back in its own coin.

Despite all this, the fact that Jaitley has not been pulled up for average performance is attributed to the perception that the BJP has a paucity of trustworthy and capable talent in its upper echelons.

Also, it is said that the Prime Minister is beholden to Jaitley for coming through for him time and again at crucial junctures during his political career, right from when he was a mid-level RSS functionary, to the aftermath of the 2002 Gujarat riots, when he nearly lost his job.

But the fact remains that even the most ardent Modi fan is miffed that the administration is so timid and bureaucratic in its functioning. The economy has improved to some extent, but mainly on the back of cheaper petroleum imports. And even here, the finance minister has thought fit to increase taxes on aviation fuel, as well as petrol and diesel at the pumps. This, presumably was an easy way to plump up the government coffers, rather than pass on the bulk of the savings to the consumer, even after allowing the erstwhile subsidies, except on LPG and kerosene, to lapse. The states, inevitably, have followed suit, slapping on their own taxes on top.

The finance minister has also, at the behest of the banking lobby presumably,  burdened investment in debt funds with a three-year lock-in period on pain of any profits being taxed at the marginal rate applicable; with indexation benefits on a 20 percent tax rate surfacing only on completion of  the three years. This was done in Jaitley’s last budget, cancelling out the previous one-year lock-in, just like equities, which however are exempted from any tax on dividends or capital gain profits after the first year.

With an equity market that is doing poorly, this provision does not help the debt market either.

But, such examples apart, where are the bold budgetary decisions in the absence of new laws?

Let us hope Jaitley comes up with something worthwhile on Budget Day 2016, though he has already been saying that the budget and the fiscal deficit are under pressure, thanks to provisioning for OROP and the 7th Pay Commission. Can we expect anything good over and above? Only the enigmatic Mr Jaitley knows the answer for sure.