New Delhi: When Pranab Mukherjee rises to present the interim budget, he will be returning to the finance minister’s podium in the Lok Sabha after 25 years. A lot has changed since then.
The economy has grown manifold to trillion-dollar-plus and politically there has been a dramatic change; it will be the first time that in a coalition regime he will represent the Congress as its finance minister, even if stand-in, and with a different Gandhi at the helm. Then, he was the first member of the Rajya Sabha to take charge as the finance minister; now, as an elected member of the Lok Sabha, he probably has a unique double.
Edit | A spectacular self-goal
In 1982-83, his first budget as finance minister, Mukherjee, an experienced politician, had Indira Gandhi, till then the unchallenged leader of the Congress party, as the Prime Minister. He returns, with the leadership now vested with her daughter-in-law, Sonia Gandhi.
(Clockwise, left to right)First innings: Finance minister Pranab Mukherjee before presenting his maiden budget on 27 February 1982. Prime Minister Indira Gandhi arriving at Parliament on budget day, 29 February 1984.Budget papers for 1984-85 being unloaded at Parliament,February 1984. Photos: Press Information Bureau
Then, life was much simpler. There was hardly any challenge to the Congress. Further, a Gandhi was not only the party leader but also the Prime Minister. Ever since the concept of coalitions found a permanent place in Indian polity, it has been different. After being out in the political wilderness for nearly a decade following Rajiv Gandhi’s assassination, Sonia Gandhi led the Congress back to power but preferred to install Manmohan Singh as prime minister.
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Circumstances changed dramatically after Singh took ill immediately after effecting a Cabinet reshuffle—which left the finance ministry headless after P. Chidambaram was made home minister. It was decided that 73-year-old Mukherjee would hold charge in the interim. Like at the time of a previous budget, the irritant of Pakistan will continue to dominate the backdrop. At that time, in the context of Pakistan’s role in stoking the Khalistan problem, he had said, “While we strive to resolve the situation in a spirit of goodwill, we have to take all necessary steps to safeguard the security of the nation. This burden, which is not our seeking, will involve sacrifices on the part of our people.”
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Similarly, the economic backdrop, too, is radically different. At the time of his first budget, India was still recovering from a balance of payments crisis—winding down an emergency loan availed of from the International Monetary Fund (IMF). In 2009, the crisis is located in the real sector—flagging output and growing unemployment.
Mukherjee’s budgets also throw up a very interesting insight: the stunning continuity of reforms. Few may recall it, but the idea of dismantling industrial licensing was first proposed as part of the IMF loan programme in 1980-81. It is another matter that India back-ended all the conditionalities and managed to bypass them by ending the loan prematurely. But the spirit of reform had nonetheless taken root.
The 1982-83 budget freed up foreign investment when it allowed non-resident Indians to acquire up to 40% shareholding in companies, including through purchase of listed stock. A step that his cabinet colleague, commerce and industry minister Kamal Nath, took dramatically forward last week when he announced the equation of foreign direct investment and portfolio investment.
Will Mukherjee take up from where he left off, even while he does not miss out an opportunity to spell out his party’s agenda ahead of the elections?
Video by Rahul Sharma
Graphics by Sandeep Bhatnagar / Mint