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 CURRENT ISSUE FEB 25, 2002  

VIEWPOINT: KAUTILYA

Time To Tune In To FM
Very soon it will be the day of the annual Big B in Delhi

By Jairam Ramesh

In February 1991 when the Congress withdrew its support to the Chandra Shekhar government, it appeared that Yashwant Sinha would have the dubious distinction of being the only finance minister (FM) never to have presented a regular budget. Since then Sinha has come a long way. On February 28, he will present his fifth budget in a row. Last year, he surpassed T.T. Krishnamachari's (TTK) and Pranab Mukherjee's tally of three. This year, he will cross Y.B. Chavan's mark of four. Next year, he could equal Sir C.D. Deshmukh's and Manmohan Singh's record of six consecutive budgets and reach seven in 2004. Morarji Desai would, however, still be on top with eight budgets though in two separate terms.

Free India's first FM was Sir R.K. Shanmukham Chetty, chosen by Jawaharlal Nehru even though he had opposed the Congress. However, Chetty resigned in May 1948 following a furore over his role in protecting a Coimbatore industrialist from investigation for income-tax evasion. Chetty has immortalised himself as the father of the daughter of pioneering dancer Balasaraswati.

Chetty was succeeded by John Mathai, an economist who had worked with the Tatas. Mathai also went prematurely in May 1950 in protest against the creation of the Planning Commission. His son, Ravi, was to later make the IIM Ahmedabad a premier institution. Mathai's successor was Deshmukh who had earlier been the first Indian governor of the Reserve Bank of India. Deshmukh had a distinguished six-year tenure and liked to pepper his budgets with Sanskrit, Tamil and Urdu, reflecting his erudition. Ultimately, he too quit in a huff over the future of Bombay. His most enduring legacy is Delhi's India International Centre.

Among the politicians who followed this technocratic trio-a remarkable tribute to Nehru's eclecticism-TTK and Desai stand out. TTK's budget of May 1957 was a watershed. It introduced the expenditure tax and other taxes recommended by the eminent Cambridge economist Nicholas Kaldor. These were to be accompanied by lower rates of income tax. This did not happen and tax rates zoomed to almost 100 per cent, earning TTK, one of the great builders of industrial India, the sobriquet "Tax, Tax and Kill". Desai was workmanlike, with his February 1967 offering being the only budget to propose a zero deficit. Desai selected H.M. Patel as his FM in March 1977, a vindication for Patel who had quit the ICs over the lic-Mundhra share controversy which had also claimed TTK almost two decades earlier.

Some prime ministers have also presented budgets as stop-gap FMs-Nehru in February 1958, Indira Gandhi in February 1970 and Rajiv Gandhi in February 1987. Ironically, Mrs Gandhi proposed clubbing the income and wealth of husband and wife for purposes of income and wealth taxation saying "those who are united in heaven should not be put asunder by a mere tax collector". And one of Rajiv's promises which has relevance today-a White Paper on the public sector-never saw the light of day because of great resistance although a reforms blueprint had been prepared by some public-sector CEOs headed by V. Krishnamurthy, then chairman of sail.

Till the mid-1970s, the budget focused on financial management. It was C. Subramanian who changed its entire complexion in February 1975 and March 1976 with his emphasis on agriculture, rural development, energy and science and technology. The 1976 Budget was unusual in another respect-it was the first and last to see the direct involvement of a minister of state for finance, Pranab Mukherjee. The March 1985 budget presented by V.P. Singh and reflecting Rajiv's bold views and L.K. Jha's advice signalled a revolution. Alas, political turbulence aborted this turnabout two years later.

Manmohan's budgets of July 1991, February 1992 and February 1993 unveiled a whole new vision for India. Reform fatigue set in thereafter, although tax corrections continued. Incidentally, Manmohan, who loved quoting Iqbal, almost didn't make it. Noted economist I.G. Patel, who as an official in the Finance Ministry during 1953-1972 had helped prepare a staggering 14 budgets, was P.V. Narasimha Rao's first choice as FM. But he declined. P. Chidambaram, who was managerially the most capable and who recalled the poet Tiruvalluvar in his speeches like TTK, was also the unluckiest FM. But he left a mark with his February 1997 budget. Sinha's earlier budgets have brought about major changes in excise duties, apart from revealing his penchant for using film titles in his speeches.

Five FMs have come from Tamil Nadu, four from Maharashtra, three from Uttar Pradesh (not counting the PMs), two each from Gujarat and West Bengal and one each from Bihar, Kerala and Punjab/Assam. But nobody has been parochial. The FM's job is the toughest, loneliest and the most thankless. On the whole, North Block has been served well by men of great distinction and competence.

(The author is with the Congress party. These are his personal views)

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