My only, and perhaps the last, encounter with Finance Minister Pranab Mukherjee was in Mumbai, nearly two years ago. He was presiding over an insurance summit and had even cut a cake to commemorate principal sponsor Life Insurance Corporation’s 54th anniversary celebrations. Shortly after this and the ensuing photo-ops, he decided to field only “a couple of questions” from waiting pen-pushers.
Ensuring one’s query is included in that “couple” and beating an army of cameras and booms is an art, though of the martial variety. Hardened by many a battle, aided by thick-soled shoes and drawing from otherwise hidden high-decibel screaming abilities, I managed to make my query heard by the minister.
Following his speech, which had lauded the new framework introduced by the Insurance Regulatory and Development Authority (Irda) for unit-linked insurance plans, my query was on the delay in tabling the report of the D Swarup committee. Mukherjee deadpanned it, saying something to the effect that the government knew when to deal with it.
“Sir, do you think the changes made by Irda are enough? Should it reform further and adopt a zero-load regime, as recommended by the panel? Is there any timeline?” I again tried to restrict him to the subject.
Alas! Mukherjee didn’t answer; he simply swatted me down with a glare. Obviously, he didn’t like the subject and probably didn’t appreciate the line of questioning, too. Then, he turned to the next best screamer, spoke on the India growth story and walked off.
The Swarup panel report was not the only reform measure brushed aside by the minister in his eventful three years at North Block. While it is the well-earned prerogative of the minister to decide on these matters, the style often made one feel decisions were taken first, with the rationale following. Also, the style, in some ways, contributed to undermining the perceived autonomy of regulatory institutions such as the Securities and Exchange Board of India (Sebi).
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The ministry, during this period, took up reports by a couple of expert panels appointed by Sebi. One such report was on the takeover code for listed companies, while another was on market infrastructure institutions (MIIs)—both exclusive domains of the market regulator. Whether these changes were for the larger good of the public is debatable.
On several instances, North Block convened meetings of Sebi-registered intermediaries to discuss important issues. Sebi was bypassed, its role was reduced to that of a spectator on several occasions.
Around mid-2011, various allegations surfaced of the finance ministry interfering in the disposal of Sebi’s high-profile investigation cases. In a letter to the prime minister, a Sebi member even alleged the involvement of a confidante of the minister himself. The ministry rubbished this, questioning the mental and physical fitness of the member.
Last, but not the least, the ministry tried to influence key appointments and, in at least one case, burnt its fingers. While it managed to have its way on the reappointment of key Sebi officials, its efforts to place a bureaucrat in the corner office of UTI Asset Management hit the T Rowe Price stumbling block. T Rowe Price is the largest shareholder in the fund house.
Also, there is the government’s disinvestment programme. This turned from the lofty “public ownership of PSUs” into a private placement with state-owned institutions. The less one talks about it, the better.