A+| A| A-

Growth by Self-seeking

In an ideological vacuum, what other basic message can one expect from government?

Public memory in these times is typically short. Pranab Mukherjee – who only recently moved from North Block to Rashtrapati Bhavan – is now getting a bad press for a­nnouncing the “retrograde” general anti-avoidance rules (GAAR), trying to reverse Vodafone’s circumvention of payments of capital gains tax to the Government of India, violating the “treasury view”, and a lot more, indeed for “killing the India growth story”. But just two years ago, he was “Finance Minister of the Year”, courtesy the monthly international affairs magazine The Banker, and again, “Finance Minister of the Year for Asia”, awarded by the newspaper Emerging Markets, both for standing by the “treasury view”! The suave and earnest P Chidambaram, who has just occupied Mukherjee’s former office, has started off with a bang. Of course, Prime Minister Manmohan Singh, who presided over the finance ministry after Mukherjee became the presidential candidate, also did the same – he talked about reversing the climate of pessimism and reviving “animal spirits”, and, in a matter of hours, put the GAAR on review.

The public’s powers of recall are short-lived. So what if Chidambaram collaborated in the underpricing of the 2G spectrum when he was last in the long office in North Block; the view in the corridors of power is that animal spirits are needed to r­evive “animal spirits”. As if Manmohan Singh’s hint was not enough, high on Chidambaram’s mind too was the imperative to signal to the markets that GAAR and the retrospective capital gains tax proposal are going to be shelved. But, importantly, while for Manmohan Singh the financing of infrastructure development was to be given the required thrust, for Chidambaram it is to be fiscal consolidation. After a meeting with D Subbarao, the governor of the Reserve Bank of India (RBI), the new finance minister hinted at a reduction of interest rates to stimulate investment and the demand for buy-now-pay-later consumer durables.

To read the full text Login

Get instant access

New 3 Month Subscription
to Digital Archives at

₹826for India

$50for overseas users


(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Using ordinance to protect freedom of expression from foul speech may result in damaging decent communication.

Only an empowered regulator can help boost production and cut coal imports.

Biden’s policy of the “return to the normal” would be inadequate to decisively defeat Trumpism.

*/ */

Only a generous award by the Fifteenth Finance Commission can restore fiscal balance.

*/ */

The assessment of the new military alliance should be informed by its implications for Indian armed forces.

The fiscal stimulus is too little to have any major impact on the economy.

The new alliance is reconfigured around the prospect of democratic politics, but its realisation may face challenges.

A damning critique does not allow India to remain self-complacent on the economic and health fronts.


The dignity of public institutions depends on the practice of constitutional ideals.

The NDA government’s record in controlling hunger is dismal despite rising stocks of cereal.


Back to Top