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Jun 17, 2012 12:54 PM IST | Source:

Race for Finance Minister: After Pranab, who next?

The race to Rashtrapati Bhawan may be over but the hunt has now begun to find a replacement for Pranab Mukherjee in the Finance Ministry. But what is corporate India's expectation from the new minister in this crucial portfolio?

The race to Rashtrapati Bhawan may be over but the hunt has now begun to find a replacement for Pranab Mukherjee in the Finance Ministry. But what is corporate India's expectation from the new minister in this crucial portfolio?

The corporate India is looking forward to a reformer in the North Block. Former Infosys director Mohandas Pai said, "Corporate sector is disappointed with the Finance Minister's Budget which sends back to the pre-reforms days. India Inc is relieved and hoping for a finance minister who will be much more open, transparent and growth oriented."

But who will be that person? The spin-doctor of 1991 Dr Manmohan Singh, the Prime Minister himself, is likely to hold the portfolio temporarily and sneak in some changes he wants.

The other options for the post are:

 Jairam Ramesh, 58, Rural Development Minister: An economist, the MIT graduate is seen as close to the Gandhi family. He was one of the backroom players who shepherded the Congress party's election campaigns in 2004 and 2009.

Articulate and media savvy, Ramesh supports cutting fuel subsidies and opening up the supermarket industry, which he opposed earlier.

In a recent interview with a local business daily, he said time for "pussyfooting" on major economic reforms was over and the government needed to "take the bull by its horns".

To his advantage, Ramesh is able to build rapport with alliance partners as well as opposition parties. At a time when the government has been left hamstrung by unruly allies, Sonia Gandhi could settle for a person who can bring partners on board to push divisive reforms needed to revive the economy.

However, he carries an image of being anti-development. As an environment minister, he had red-flagged several mining and infrastructure projects on environmental concerns.

P Chidambaram, 66, Home Minister: A familiar face and a senior party stalwart who held the post during the global financial crisis in 2008.

His deft handling of the situation then, helping India avoid the worst of the downturn, makes him a leading candidate to take over an economy mired in the doldrums.

Although it's been nearly four years since he moved over to the interior ministry, his heart is seen to be in his previous job. Former colleagues from the finance ministry recall him as having an eye for detail and cannot be bluffed.

Considered to be a reform-oriented taskmaster and a market friendly face, Chidambaram enjoys the confidence of both Prime Minister Singh and Sonia Gandhi.

But an image of "intellectual arrogance" has earned him detractors both within and outside the party.

He is also under siege. Opposition parties question his role in a multi-billion dollar telecoms scam that has undermined the Congress-led government. His family is under scrutiny over a controversial telecom deal. Chidambaram, himself, is battling charges of rigging his election to parliament in 2009.

C Rangarajan, 80, Chairman of the Economic Advisory Council to the Prime Minister: Seen as a dark horse in the running for finance minister, he is one of the most trusted aides of Prime Minister Singh.

Rangarajan has worn various hats both within and outside the government, and would bring long experience to the job. Unlike other contenders, he has generally avoided controversy.

He is widely perceived as a hawk who frowns upon expansionary fiscal policy and high inflation, and is an advocate for fuel subsidy reforms and long-pending financial sector reforms. He favours building consensus before allowing foreign investment in multi-brand retail and aviation.

However, Rangarajan is not seen as a political heavyweight, even though he was governor of Andhra Pradesh for six years and was a member of the Rajya Sabha. Congress is seen to prefer a politician who can deliver votes in the 2014 parliamentary elections.

Montek Singh Ahluwalia, 68, Deputy Chairman, Planning Commission: The Oxford-trained economist has been a key figure in Indian economic policy since the mid-1980s. He is an influential adviser to the prime minister and is also India's Sherpa for the G20 Summit.

A supporter of open markets, he has been pushing the government to implement long-pending reforms like ending controls on fuel prices, lifting caps on foreign stakes in the insurance sector and allowing in foreign supermarkets.

He is close to Singh and was a key member of the team that navigated the economy out of the 1991 balance of payment crisis.

Ahluwalia is said to harbour political ambitions and was seen as front-runner for finance minister in 2009, but was thought by Congress to be too market friendly. A lack of political base also went against him.

He has also been hurt by controversies, including the definition of a poverty line at 32 rupees a day.

Anand Sharma, 59, Trade Minister: A lawyer-turned politician, Sharma is perceived to be reform-oriented and enjoys the confidence of the Gandhi family.

He is credited with arresting the slide in India's exports after taking over as trade minister in 2009 through a combination of bilateral trade agreements and diversification of export markets. He has also overseen bold steps to liberalise trade ties with arch-rival Pakistan.

Sharma has been pushing for liberalising foreign direct investment rules and succeeded in getting the government's approval for allowing foreign direct investment (FDI) in multi-brand retail, an initiative thwarted by coalition allies. Permitting FDI in the aviation sector is the next big ticket item on his agenda.

Sharma's stature in the party could be a handicap. He is not seen as a political operator and does not bring a large base of political support. Blame for the embarrassing flip-flop on FDI in retail is often put at his doorstep.

The challenge is immediate and daunting. How to restore India's economic growth miracles, the omens are not good, a farewell to incredible India could also mean a farewell to the party in power.

(With inputs from Reuters)


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