Why Did Modi Give Finance to Jaitley?

Policy formulation and decision-making in Indian politics have often been characterized by the principle that financial portfolios should be entrusted to individuals who can be easily controlled by the Prime Minister. This trend has been evident since Yashwant Sinha, Chidambaram, and most notably, Arun Jaitley. These ministers do not hold the power to win elections on their own, and as a result, they are largely dependent on their party for nominations to the upper house of Parliament, the Rajya Sabha. Their primary role is to continue the initiatives of their predecessors, often making only minor adjustments and maintaining a broad political equilibrium.

Understanding the Landscape

A person’s ability to handle complex financial portfolios is often more about political loyalty and trust than actual economic expertise. In the case of Arun Jaitley, his deep-seated confidence in Prime Minister Narendra Modi underscores the importance of personal assurance over professional competence. While Jaitley served as the Leader of the Opposition and had extensive knowledge of economic affairs, he often made decisions that appeared to lack thorough economic analysis. This can be seen in his missteps, such as the implementation of demonetization and the rollout of GST (Goods and Services Tax), both of which were widely criticized for their negative economic impacts.

The Role of Trust and Performance

Modi’s confidence in Jaitley was not merely about his political connections or his position as Leader of the Opposition. Instead, it was rooted in the belief that Jaitley possessed the necessary prudence and trust to manage the financial intricacies of the country. This trust allowed Modi to entrust financial responsibilities to someone who was expected to carry out his vision with minimal political disruption. Jaitley’s role was to implement policies and reforms not decisively, but rather with careful consideration of public opinion and political sensitivities.

The Critics’ Perspective

Many critics argue that Jaitley’s handling of economic affairs was subpar. His lack of strong economic decisions is exemplified by the controversial economic policies he implemented. Demonetization, intended to curb black money and corruption, had severe economic repercussions on the informal sector and resulted in a short-term economic downturn. Similarly, the introduction of GST was heralded as a panacea for economic inefficiencies but faced significant pushback, leading to widespread protests and resistance from different state administrations. These policy failures highlighted the gap between Modi’s vision and Jaitley’s execution.

Conclusion

Modi’s domestic policy-making can be analyzed through the lens of political economy, where trust and loyalty often trump professional competence. The choice to give finance to Jaitley was more about sustaining political unity and maintaining the Prime Minister’s vision, rather than based on economic expertise alone. The economic decisions made under Jaitley’s presidency serve as a cautionary tale about the limitations of relying solely on political trust without strong economic oversight.