| On Monday, P Chidambaram will present his fourth Budget. While he remains unflinchingly correct in his dealings, the finance minister has changed in the way he now manages his ministry.
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| It was 8.00 am on Thursday, 20 May, 2004 when P Chidambaram walked into 19 Safdarjung Road, the residence of Dr Manmohan Singh, to offer him his congratulations and a red brocade shawl.
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| The previous afternoon, Dr Manmohan Singh had met President A P J Abdul Kalam and was declared Prime Minister-designate. This had quietened a jittery stock market but it was Congressmen who were suffering from the heeby-jeebies now.
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| Speculation had begun on the council of ministers. A Congress general secretary considered close to Congress President Sonia Gandhi said with an air of confidence that she didn't think P Chidambaram was getting a ministership.
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| "After all, he's only just returned to the Congress," she said. Another general secretary saw his number flashing on his mobile and switched it off.
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| As he entered the corridor that led to Singh's library and was ushered in, Chidambaram had no idea he would soon be occupying the same house, and certainly didn't know it would be as finance minister.
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| The following evening, he received calls from news networks about his appointment. He had a stock answer: "I don't know. I'm having fried chicken for dinner and then I'm going to bed. Let's see what happens tomorrow."
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| On Saturday, 22 May, he took the oath as finance minister for the fourth time. As before, he took the oath in the name of the constitution (not god) and got down to work on a budget he was required to present in the next six weeks.
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| Budget-making in double-quick time was nothing new for a man who had rewritten India's exim policy in 1991 in a matter of 12 hours. But the context had changed. And so had Chidambaram.
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| The old Chidambaram had no time for dogma and was especially scornful of Left rhetoric. He believed the underdog only represented a set of vested interest that wanted to keep society and economy in perpetually backward mode and therefore, in its thrall.
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| The new Chidambaram, having managed several coalitions partnered by the BJP and the Left, is more receptive to socialist anxieties. In 1991, when he became commerce minister, you would never have heard him talking about microcredit, let alone self help groups (SHGs).
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| Then, the preoccupation was with corporatisation and the principles of economies of scale. Today, not only has his constituency, Sivaganga, seen a mushrooming of SHGs, he himself visits microcredit facilities when he can to understand the problems of very small businesses.
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| At Citibank's microfinance awards earlier this year, he explained that he had been travelling to understand microfinance and the gaps in the delivery mechanism.
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| "I went to see a branch of a bank recently. Because I was present, the manager of the bank forwarded Rs 1,000 as credit to a man who had come seeking a loan. It was more a dole than a loan. That is precisely what is wrong with delivery systems. When the poor get credit, it is treated as a favour. There is no viable credit mechanism," he said.
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| These would not have been the preoccupations of the old Chidambaram.
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| That he attended a meeting organised by the Self Employed Women's Association (SEWA) in January was in itself a surprise.
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| And when SEWA said it wanted banks to recognise its SHGs as viable businesses, and when they didn't it wanted recourse to a regulator who could address their complaints, Chidambaram told them that they did not know it but they could be creating a monster.
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| "A regulator is not part of the solution, he is part of the problem," he said. The finance ministry is now expending a lot of energy in trying to professionalise the microfinance sector.
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| There is a palpable change in his approach, especially in dealings with the Left. He is trying to concentrate on what is achievable, and putting aside to resolve at a later date what is not.
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| Whether it is FDI in telecom or banking, Chidambaram's approach is to chip away at resistance, eliminating the fog of value-loaded arguments and replacing them with sheer economic logic.
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| CPIM's Prakash Karat considers Chidambaram a formidable negotiator "" because you can't fault his economics even if you don't agree with him.
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| There's one thing that hasn't changed about Chidambaram "" and that is a stout resistance to using the law for political advantage. In his book, this classifies as a sharp practice.
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| Tamil Nadu Chief Minister Jayalalithaa is a vulnerable target for cases relating to assets disproportionate to her income. Indeed, Chidambaram has himself spoken and written "" when he was out of office "" about these cases.
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| As finance minister he is privy to mindboggling amounts of information. So far, there's been no attempt by him to institute new cases or speed up old ones.
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| They are not friends, Jayalalithaa and he. In 1992-93, ADMK workers firebombed his car , shattering the windows. Chidambaram sat down on a dharna in the middle of the road and refused to move until the district administration had taken cognizance of the attack.
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| He was a union minister then. Now, Jayalalithaa is keeping a wary distance. His DMK partners can't understand why he doesn't intervene, involve Jayalalithaa in a thousand legal cases and remove a political problem through legal means.
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| Well, that won't happen because Chidambaram is Chidambaram.
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| His recent political adventures "" moving out of the Congress banyan tree to launch the Tamil Maanila Congress (TMC), the electoral debacle of the TMC, mentor G K Moopanar's death and the formation of the miniscule Congress Jananayaka Pervai, and the subsequent return to the Congress "" have reinforced what everyone knew: that Chidambaram has never been wanting in courage.
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| Because he is brave, he expects everyone else to be too, and is always slightly disappointed when people take easier ways out. When he is curt or abrupt, it is his disappointment speaking.
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| Wherever he has been, the locus of his relationship with the Congress has not altered. It was he and his wife who, after Rajiv Gandhi's assassination, fought cases for Gandhi's possessions "" the clothes he was wearing , his shoes etc "" to be restored to Sonia Gandhi. That meant a lot to Gandhi's widow.
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| Now, when professional competence is at a premium in the Congress, Chidambaram is one of the most valued lieutenants of the UPA team. So when you hear rumours of a reshuffle and a replacement in the finance ministry, don't believe a word. He isn't going anywhere.
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| He is valuable for another reason. Every public sector bank chairman would have, in the course of his career as chairman, got letters from various industrialists, forwarded by the finance minister's office, seeking rescheduling of loans.
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| Some finance ministers even dispensed with the formality of writing covering letters, simply making notings on the petitions themselves and passing them on.
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| A dipstick survey reveals this FM's office simply doesn't send such notes. In a ministry where temptations are thick on the ground, incorruptibility is crucial. He continues to believe that money should be one's servant, not one's master.
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| Chidambaram is full of dreams for young people and a new India. Budget 2005-06 is likely to be a product of Hobbesian chains in which he is bound. Once he is unbound, travels with Chidambaram will be voyages of discovery. Get your tickets "" and your insurance "" now!
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Karti on his father, P Chidambaram
EXCLUSIVE
| | | | Karti Palaniappan Chidambaram is fast talking, quick thinking and wants passionately to change India. In that he's his father's son, the Chidambarams' only child.
| | | | His sense of humour is all his own. He's clearly been brought up as a distinct personality and does not shy away from differing from his father, so the senior Chidambaram has got that right!
| | | | He completed his schooling at the Don Bosco School, Chennai, went to the University of Texas, Austin, Texas USA for his Bachelors' degree in Business Administration and followed that with a degree in law from Cambridge University, England.
| | | | He runs a legal consulting firm called Chess Management Services that provides legal compliance services to corporates and a website called vakil.com.
| | | | He has represented the state and the university in tennis. He is also an avid cricket player. In this interview, Chidambaram Jr talks about Chidambaram Sr.
| | | | "He" is the finance minister.
| | | | Is he a strict or a lenient father?
| | | | He is very strict but has always given me tremendous freedom and leeway.
| | | | He said once that he has never and would never raise his hand at his child.
| | | | That is absolutely true, he has never raised his hand. I too don't believe in corporal punishment.
| | | | But have you always got what you want?
| | | | Generally, I have got what I wanted.
| | | | Is he stubborn? Does 'no' always mean 'no' or can you persuade him to review a course of action he intends to take?
| | | | Yes, he is pretty set in his views.
| | | | I know through experience and trial and error what will meet his approval and what won't. Timing and presentation of the issue is important in getting his approval.
| | | | I 've always believed he's a perfectionist.
| | | | He is rather unforgiving of failure, which I think is a huge drawback. He is very quick on the uptake on most issues, and at times doesn't appreciate that others don't get it at once. He has a very good eye for detail. I am more of a generalist. This is perhaps the biggest difference between us and at times the cause for differences.
| | | | How does he react to your losing ?
| | | | Not too badly as long as he knows I did my best. The question of losing doesn't arise now since I have stopped playing competitive tennis.
| | | | Are you always expected to be the first, the best, the ablest?
| | | | Yes, I was expected to be good at pretty much everything I did. But the pressure was not abnormal or high. I have known cases of parents who are unduly demanding.
| | | | When you're disappointed, can he sense it? How does he comfort you?
| | | | I don't show my disappointments easily. He is pretty strong willed, his being there is comfort enough for me.
| | | | If you look at the continuum that is your father's life, what have the turning points been ?
| | | | His biggest break was getting the ticket to contest the Lok Sabha for the first time in 1984. His national prominence is greatly due to Rajiv Gandhi.
| | | | People don't really know that he started off his political career at the age of 23. He was a union leader for MRF and worked his way up in the Congress party.
| | | | He was the TN Youth Congress president and then the general secretary of the TNCC unit. His rise was not sudden; in fact, it is truly a growth from the grassroot level.
| | | | I know that he was closest to G K Moopanar and everything Moopanar represented in Tamil Nadu politics "" and Moopanar was very fond of you
| | | | True. I'd known Moopanar since I was a kid.
| | | | So the decision to form the Tamil Maanila Congress was a big event.
| | | | Yes. Parting from it and forming the Congress Jananayaka Pervai was also an important event. Rajiv Gandhi's death was another.
| | | | I was personally affected by this, I had come down for the election campaign during my vacation from college. Rajiv Gandhi was supposed to come down to Sivaganga the day after to campaign for my father and I was really looking forward to it.
| | | | It never happened. I never met Rajiv Gandhi.
| | | | What values has he taught you to cherish most?
| | | | Ethical behaviour.
| | | | I've noticed that he never takes his oath in the name of god, always in the name of the constitution. So truthfulness in law is more important to him than religion.
| | | | I am a believer in god, a bit more religious than my father.
| | | | Can you cut corners and get away with it?
| | | | Absolutely not.
| | | | He loves children. What was his first reaction when he got the news about his first grandchild ?
| | | | He dotes on Aditi. But he seldom spends time with her, since he is away from Madras most of the time.
| | | | How much of your father do you have in you?
| | | | Most people think we look alike and are surprised to know that he has a son as old as me. I am 33. He is more cerebral, but I am more passionate.
| | | | I have grown up, and continue to live, in his shadow. Even though it has brought me great privileges, it irks me at times. Since I have political ambitions and aspirations.
| | | | I am sure the comparisons are going to get more shrill as time goes by. But I am confident of my identity. |
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His budgets at a glance
| | | | Palaniappan Chidambaram seems to have a special fondness for the number seven. In his first Budget speech on July 22, 1996, as the finance minister in the United Front government, he listed seven broad objectives of his fiscal proposals.
| | | | Eight years later, he delivered his third Budget speech on July 8, 2004, as the finance minister in the United Progressive Alliance government, listing seven economic objectives.
| | | | The pursuit of a common minimum programme is another common factor in Chidambaram's budgets "" a pointer that Chidambaram has always been FM in a coalition government.
| | | | TAX BREAKS
| | | | Chidambaram's budgets will be remembered for their steep cuts in direct taxes. In 1997, he reduced individual income-tax rates to three slabs of 10, 20 and 30 per cent, even though he introduced compulsory filing of returns by some categories of individuals.
| | | | Similarly, he cut the corporation tax rate to 35 per cent. Successive finance ministers have stuck to these basic rates, making only marginal changes here and there.
| | | | He is the author of the unpopular minimum alternate tax, through which he brought under the tax net several companies that were earlier paying no taxes by using various exemption routes.
| | | | Chidambaram will also be remembered for introducing the controversial amnesty scheme for those who wanted to disclose their past, unaccounted income and pay tax. The government mopped up additional tax revenue, but the scheme came in for general criticism.
| | | | COMMITTEE MAN
| | | | In his three budgets so far, Chidambaram succeeded in setting up four new committees "" the Disinvestment Commission, Tariff Commission, Foreign Investment Promotion Council and the Board for Reconstruction of Public Sector Enterprises.
| | | | What he could not set up was the proposed expenditure management and administration reforms commission.
| | | | Chidambaram set up the Infrastructure Development Finance Company, an organisation to provide funds to the infrastructure sector.
| | | | He introduced the idea of imparting greater autonomy to the public sector by declaring nine PSUs as Navaratnas. It is a different matter that two of them were later privatised by the BJP-led coalition government.
| | | | Of far-reaching significance were his decisions on phasing out completely the system of the Reserve Bank of India issuing ad-hoc treasury bills to finance budget deficits, permitting Indian companies to buy back their shares from the market, abolishing the tax on dividends in the hands of the shareholder, replacing FERA with the Foreign Exchange Management Act and the limited opening of the insurance sector.
| | | | Chidambaram has another fondness: Saint Thiruvalluvar. All his budget speeches have a quote or two from his writings.
- A K Bhattacharya |
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His legal cases
| | | | Chidambaram's reputation as a lawyer is well known. He has appeared in cases to defend corporates ranging from Coke and Pepsi to the Birla group and most telecom players, but also appeared against the Tamil Nadu government in the case relating to the mass termination of its employees services by Chief Minister J Jayalalithaa.
| | | | He is rated one of the best senior lawyers in the Supreme Court. His son Karti studied law but does not practice it because the shoes are too big to fit into.
| | | | Law students in Chennai crowd the High Court when they know Chidambaram is appearing there, which is not that often. |
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