The Arun Jaitley years: Soft skills, hard battles10 min read . Updated: 05 Jun 2019, 08:44 PM IST
Arun Jaitley brought rare skills to the political table, including the fine art of negotiation and consensus building
New Delhi: Two years ago, at the 23rd meeting of the Goods and Services Tax (GST) Council held in Guwahati in November 2017, the representatives of the Bharatiya Janata Party (BJP) and the Congress party were at odds. In fact, their acrimony, which was building up ahead of the meeting, was threatening to spill over into the meeting; worse, it was poised to jeopardize the carefully crafted consensus within the Council. That was when Arun Jaitley, the then Union finance minister and chairman of the Council intervened. In a stern yet polite manner, he said: “Politics outside (the room) is fine, but not inside." Wisdom prevailed and both sides pulled back from the brink.
Insiders maintain that this one anecdote sums up Jaitley’s contribution—first, in ensuring political consensus in Parliament so that the constitutional amendments to introduce the GST could go through and then, later, in ensuring that the Council worked on the principle of consensus. This ability to manage seemingly irreconcilable differences is a key feature of the character of the man who voluntarily recused himself from consideration for the Union cabinet, a day ahead of the swearing-in of Prime Minister Narendra Modi last week.
According to his own admission, Jaitley had signalled his intent to the Prime Minister just after the polls closed on 19 May. The formal letter, also shared by Jaitley on social media, cited health grounds. “I am writing to you to formally request you that I should be allowed a reasonable time for myself, my treatment, and my health, and therefore, not be a part of any responsibility, for the present, in the new government," he said.
Among all the policy decisions that Jaitley shepherded through the legislative maze of Parliament—especially challenging because the numbers in the Rajya Sabha were stacked against the National Democratic Alliance (NDA)— the GST and the Insolvency and Bankruptcy Code (IBC) are standouts. One economically unified India enabling the principle of “One Nation, One Tax" and the other created a bankruptcy code that, for the first time, put errant promoters on notice.
The passage of the GST was where everyone got a glimpse of Jaitley as the reconciler. While everyone agreed on the principle of the GST, states were reluctant to sign off on their fiscal powers; given the history of rocky relations, the states were inherently sceptical of the centre. Exactly why the proposal had languished for 17 years, till Modi decided to lend his social capital to its passage. The task of managing the logistics of implementation was of course Jaitley’s. In similar circumstances, first Pranab Mukherjee and later P. Chidamabaram had failed to build the desired consensus. Insiders claim the virtue of patience is what enabled him to get around the frustrations of frequent logjams in the meetings—first in the group of finance ministers and later in the GST Council. Two current members of the GST Council, coincidentally both from the opposition, said as much.
“I would say that he was a true democrat," said Manpreet Badal, the finance minister for Punjab and senior Congress leader. “Even though the BJP (Bharatiya Janata Party) had an overwhelming majority in the GST Council, every decision was taken by consensus. This standard he set is now the convention."
Arguing similarly, Thomas Isaac, finance minister for Kerala, said: “I found him extremely considerate about other people’s opinions. He (exhibited) no impatience. He sits and listens. GST meeting, particularly in the earlier days and even now, is a whole day meeting. I have wondered how he manages to spend that much time; and doesn’t become impatient."
In a similar vein, Krishna Byre Gowda, the former Karnataka representative in the GST Council for two years, recalled, “He was very democratic. Though the same cannot be said about the supporting establishment, he ensured that we participated in good faith in the deliberations. Perhaps, it may not be an exaggeration if I went as far to say that it was his stewardship that gained the support of some of us. His patience and erudite pursuit of consensus ensured the success of (the) experiment in federal governance."
At the same time, Jaitley was known to draw the red lines and stick to it, regardless of the pressures. According to an insider, at one of the key meetings to chalk out the modalities of the GST, the states refused to come around and some of the finance ministers even chose to be petulant. On that rare occasion, Jaitley, recalls the same person, raised his voice slightly and said: “Look don’t think that the Union government is desperate for the GST. It is good for the country. But if the states believe there are huge problems, then let us defer the GST for another 5-10 years."
The ultimatum worked and everyone actually relented. Guess there is a reason why in 34 meetings of the GST Council, there has never been a vote; by any measure it is a tough standard to breach and part of the credit has to accrue to Jaitley.
According to Haseeb Drabu, the former finance minister of Jammu and Kashmir and a key member of the GST Council, Jaitley’s strength was the timing and manner of his intervention. “He (Jaitley) knew when to intervene. When contentious matters were reaching a tipping point he would either call for a break for chai or advance lunch hour. During this break, he would bilaterally work on the agitated member and defuse the crisis."
A similar sentiment was echoed by Issac: “If it came to a kind of stalemate, he would call for a break, for lunch or so. And after lunch, he has his usual adda; irrespective of political affiliations, everybody loves to gossip. Then, we would slowly settle it (the dispute). So, not only was he in charge, despite such differences (among the members), but he always brokered peace between warring factions."
It is not surprising that food and addas were often the medium employed by Jaitley to broker consensus. It is something that he loves, with a particular relish for street food. As former chief economic advisor, Arvind Subramanian, wrote in Mint recently, he would generously share these dishes.
I recall once he had invited a colleague from The Economic Times and me for a chat on the economy. After we settled down, he asked me if I had ever had “chole-bhature" from Paharganj. I confessed I hadn’t. “They are the best. I got them specially for you today. Eat them first. We will do the interview after that."
Leadership with a soft touch is the characteristic that his former team members at North Block recall about Jaitley. More importantly, the bureaucrats received the desired political backing.
Reserve Bank of India (RBI) governor Shaktikanta Das, who was also the former secretary in the Department of Economic Affairs in Jaitley’s team, recalls, “He is a great team leader who gives a lot of space to the bureaucracy. Highly knowledgeable and excellent in uptake of issues and subjects and in navigating them in Parliament and thereafter."
Inevitably, when Parliament was in session, Jaitley’s room was the destination for politicians of all hue. Even those who minutes previously would have been indulging in scathing attacks on the government would turn up for these lunches—for the culinary treats which were brought from various locations in Delhi. These addas became a pit stop for exchange of views, including on contentious issues.
This contribution is something the NDA will miss, unless someone else steps up to fill the vacuum created by Jaitley’s exit or the BJP and its allies claim majority in both houses in a little under two years.
This social capital is something Jaitley deployed for the passage of the contentious IBC. After the legislation was introduced in Parliament, it was referred to a joint select committee and became a bone of contention with some key opposition members of Parliament (MPs). Insiders recall how Jaitley would seek them out and engage in direct parleys, convincing them on the need for the new law. He prevailed on them by pointing out that unless something structural was undertaken, this cycle would not be broken and the banks would be in crisis. The existing principle he pointed out was that initially industrialists were chasing banks for the loans, but once sanctioned, the banks had to run after the borrowers for repayment. So convinced were these MPs that they actually started quoting this logic inside and outside Parliament. Not surprising, then, within a year of introduction of the legislation, it was passed, notified, and implemented.
However, Jaitley’s critics argue that under him bureaucrats were not subjected to the desired scrutiny. As a result, errors of omission were overlooked that resulted in disastrous consequences. They cite the issue of agrarian distress, which had been brewing since well before the government took over. While colleagues in the Union cabinet were equally accountable, critics point out that the team of economists advising Jaitley could have done better. Eventually, the government did react in the interim budget, but the structural challenges still remain unaddressed.
“Although he led reforms of the indirect tax code, he did nothing on the new direct tax code, which is languishing since the late 90s," Prithviraj Chavan, former Maharashtra chief minister and Union minister, said. “He failed miserably on the reform of the banking sector, on the unemployment front, or on farm distress," he added.
Technically, Jaitley’s public life stretches back 45 years. It was in 1974 that he got elected as the president of the Delhi University Students Union as a candidate of the Akhil Bharatiya Vidyarthi Parishad, the student wing of the BJP. A year later, he was in the forefront of the student movement challenging the imposition of the Emergency by the then Congress government headed by prime minister Indira Gandhi. It resulted in his arrest and incarceration for 19 months. In 1980, he joined the BJP and 11 years later, he was a member of the party’s national executive, even while he pursued his career in law.
Through the 1990s, Jaitley emerged as the party’s face in the media. I recall how he would return from the courts to his then residence on Ashoka Road and change into the customary attire of the Indian politician: kurta and pyjama. Over such extended sessions, the media and Jaitley cemented this relationship. Many missed this when he ascended formal office, particularly in 2014 (initially, he was in charge of the defence portfolio too).
Maybe this media reticence was the reason why Jaitley became most active on social media, especially on Facebook, where he would detail arguments defending the government or challenging the opposition’s criticism. It invited a facetious charge by some of his critics, particularly among the Congress party, who referred to Jaitley as the “blog mantri".
While interactions with the media may have been restricted, Jaitley is among the few politicians who understood the peculiar ways of Delhi. In this, say people close to Jaitley, he invested in meeting or calling at least a hundred people every day—the morning ritual was completed before he reached office by 9.30am, leaving him one of the most informed people in Lutyens’ Delhi. The urban legend has it that there is nothing Jaitley did not know.
A senior journalist, who did not wish to be identified, said, “All this is true, but what most forget is that Jaitley is so large-hearted. He is always so invested in people. In addition, he had this rare quality in Indian politics of grooming juniors; no doubt some of them have gone on to become politicians in their own right, but they owe their first break to him."
Clearly, almost everyone who intersected with Jaitley, including his critics, held a strong, sometimes passionate, view of the man. Something that was summed up aptly by Badal: “This is purely on a selfish note. With the kind of talent I see around me in Punjab, he was probably the last Punjabi to be heading the Union ministry of finance. Sad to see him withdraw on account of health."
M.K. Nidheesh and Sharan Poovanna in Bengaluru, Anuja and Gireesh Chandra Prasad in Delhi, and Abhiram Ghadiyalpatil in Mumbai contributed to this story.