Does India need a full-time FM? Experts argue

Ever since the former Finance Minister P Chidambaram was moved to the Home Ministry and the Prime Minister (PM) took on the additional charge of the Finance Portfolio, there's been a debate raging on whether we need a full-time FM or not, especially in turbulent times like these?
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Dec 11, 2008, 09.40 PM | Source: CNBC-TV18

Does India need a full-time FM? Experts argue

Ever since the former Finance Minister P Chidambaram was moved to the Home Ministry and the Prime Minister (PM) took on the additional charge of the Finance Portfolio, there's been a debate raging on whether we need a full-time FM or not, especially in turbulent times like these?

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Does India need a full-time FM? Experts argue

Ever since the former Finance Minister P Chidambaram was moved to the Home Ministry and the Prime Minister (PM) took on the additional charge of the Finance Portfolio, there's been a debate raging on whether we need a full-time FM or not, especially in turbulent times like these?

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S Narayan, Former Finance Secretary

Ever since the former Finance Minister (FM) P Chidambaram was moved to the Home Ministry and the Prime Minister (PM) took on the additional charge of the Finance Portfolio, there's been a debate raging on whether we need a full-time FM or not, especially in turbulent times like these? Lots of names are doing the rounds including former Karnataka CM and Governor of Maharashtra SM Krishna.

 

Just before taking over as a Home Minister, P Chidambaram had told journalists that his seat in North Block would remain cold for sometime apart from SM Krishna, there are set to be a few more worthies who see Chidambaramís relocation two blocks away as an opportunity. The question is whether we need a resident FM in north block or can the PM double-up for the next few months? S Narayan, Former Finance Secretary and Rajeev Chandrasekhar, MP, Rajya Sabha and President of FICCI comment on the same.

 

Here is a verbatim transcript of the exclusive interview with S Narayan and Rajeev Chandrasekhar on CNBC-TV18. Also watch the accompanying video.

 

Q: You were a Finance Secretary between July 2002 and June 2003 and then you moved to the Prime Ministerís Office (PMO) where you were looking after economic affairs under Former Prime Minister Atal Bihari Vajpayee, do you think that we require a 24/7 FM?

 

Narayan: In a situation like today, there has to be an active involvement of the Finance Ministry particularly, since there is a global turndown of the economy and therefore there needs to be an active person who is able to intervene, take decisions and make things happen in a short period of time.

 

It will be very valuable, whatever the PM maybe able to do but at the same time in the north block it will be very useful to have a person who is hands-on all the time.

 

Q: So you do not think that he can double-up as FM by holding an additional charge?

 

Narayan: The question is of management of time. Today after the Mumbai attacks, issues of security are also becoming extremely important. Besides, there is a responsibility of carrying forward all the issues which he has already concerned with, like N-deals and so many other things.

 

To burden him in addition with the Finance Ministry - certainly he is capable and he can do it, but would it not be fair to him if a full-time FM is available to him, whom he can guide and advice and who together with him will be able to take this country forward.

 

Q: What do you feel, do you agree with Narayan?

 

Chandrasekhar: We are now faced with twin challenges of national security and we have an economic crisis too. These two are significant challenges the nation is facing and there is an argument that both these challenges need to be handled in a focused manner by capable people.

 

So, the argument to have full-time FM is compelling because of the gravity and the nature and the size of the economic challenges. As far as the PM goes, I agree with Narayan, that he is quite capable and he is my first bet anytime for a FM, but the fact is that he is grappling with a serious national security challenge.

 

Q: But the point is that there is no regular budget to be presented, no tax proposals, no headache of finding budgetary support for the third year of 11th plan. So do you require a full-fledged FM to scatter money ahead of elections?

 

Chandrasekhar: It is not about scattering, it is about reviving the economy. It is about sending the message, because we know in a few days there is going to be a new President in US and there is going to be a conscious effort to reverse global sentiment. At that time, we need a FM who works with the global economy and the economist and the global players to take and shepherd our economy back to a path, where our investors can have confidence.

 

Q: But in the past for example Indira Gandhi doubled up FM for a brief, while after she sat Morarji Desai and Rajiv Gandhi presented a budget?

 

Chandrasekhar: But the situation isnít the same. I think we are underestimating the nature, size and scope of the economic challenge in front of us, which is not a trivial situation and it would be best for the nation, if there is a full time FM.

 

Q: You believe that these are turbulent times when markets have to be calmed, investors have to be reassured, when delegations have to be met and files have to be cleared and perhaps it would also help the PM to have a person, who can take the flag and in case things go wrong he should not expose himself as a fall guy?

 

Narayan: No, I donít think that. Firstly, I donít think that the calming of the market is a responsibility of the FM; markets will behave as markets should behave and I donít think the Finance Ministry should engage itself in the market speculation so much.

 

At the same time we are four months away from the elections, and there is an opportunity in the next couple of months to take some corrective measures, both on the fiscal and on the monetary side, as well as in terms of giving an economic impetus to the whole economy - which advantage should not be lost sight of and this cannot be done by someone, who is already overburdened with a lot of other responsibilities. It should be very clear that now it is going to be a team effort. Team effort with Chidambaram in Home Ministry with the PM and quite possibly a full time FM, So, I think there is a team that would be looking at for the next few months.

 

Q: S.M. Krishna is said to be the front runner, you have also worked with him - I would imagine because you were heading the task force that he had set up for infrastructure development in Bangalore, when he was Chief Minister. What do you think of his candidature?

 

Chandrasekhar: I donít think I am equipped to comment on who should be the FM. But I know Krishna, he is extremely capable, extremely dynamic politician, and most importantly he is a man who is able to absorb multiple sets of ideas from multiple sources and create a strategy and he did that very successfully in Karnataka, when he was Chief Minister and I quite enjoyed working with him.

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