The appointment of the articulate Arun Jaitley as finance minister was widely expected and perhaps there could be no better person to handle this most portfolio. Considering the economic mess that Prime Minister Narendra Modi’s government has inherited, if Mr Jaitley gets it right it will lead to bringing in badly needed investment. The two most important items he will have to tackle are the fiscal deficit, by cutting down on unnecessary subsidies and curbing government borrowings, and increasing revenue mobilisation through tax reforms. Finance minister Chidambaram left behind unpaid subsidies totalling over Rs 1 lakh crore, not to mention another Rs 1 lakh crore in dues to exporters and others.
If Mr Jaitley is able to control the deficit, India’s rating, which is triple B minus with a “negative” outlook, could be changed to positive. This will automatically improve India’s credibility, bring in foreign investment and spur exports. He will also have to look into issues like the ease of doing business. Corruption and crony capitalism are other evils that he will have to guard against so that the country’s entrepreneurial talents can be unleashed.
His colleagues — Nirmala Sitharaman, expected to get the commerce portfolio and Ravi Shankar Prasad, expected to get telecom — are also expected to deliver. The underlying strength of the new government is Prime Minister Narendra Modi, who will be in the driver’s seat. One hopes this will be new wine in a new bottle.
