Prime minister Narendra Modi would do well by continuing with Arun Jaitley as finance minister. While he has succeeded in resolving many of the pending tax issues and the economy appears to be holding on well despite tough global scenario, implementation of GST and other tax reforms would also require a leader of his stature.
That finance minister Arun Jaitley has no penchant for numbers and nitty-gritty of economic policy-making like former finance minister P Chidambaram, is well known in the finance ministry.
Also known is his reluctance to be the principal trouble-shooter of the government, a role played by Pranab Mukherjee for UPA.
And with prime minister Narendra Modi himself guiding and monitoring the economic policies and their outcomes, even someone with less experience but having the enthusiasm to deliver, like power minister Piyush Goyal, could be seen as a good choice to take up the top job at North Block if FM Jaitley decides to go to any other core ministry like defence.
But, any of these factors don’t reflect in any manner that the finance ministry has not been functioning well under FM Jaitley, it is just a matter of working style that may not appear compatible with the finance minister’s job.
While this is one side of the coin, the other side is the fact that the finance ministry probably works better if the officials are allowed to function without too much interference. This was seen during the period of Jaswant Singh in the previous NDA regime, who was also said to be a reluctant finance minister.
This is why PM Modi needs to be extremely cautious in getting a new finance minister at this juncture, especially when the government plans to get the Goods and Services Tax (GST) Bill passed in Parliament in the monsoon session next month.
FM Jaitley has done well by ensuring the support of the Trinamool Congress Party and other non-Congress parties to the GST Bill, and if it gets passed in the monsoon session, the decks will be cleared for the implementation of GST from April 1, 2017.
This would require immense co-ordination with the state governments and a leader of his stature will be a binding force as there will be no confusion in terms of decision-making.
Another factor that needs to be recognized is, though the 2012 retrospective tax amendment is still part of the statute, many of the teething tax issues have been resolved in the last two years.
Then, there are tax reforms like phasing out of tax exemptions for companies and reduction in the corporate tax rate from 30% to 25% that he has initiated, and which need to be pursued in the next three years.
The basic point is if things are going in the right direction, why unnecessarily disturb the momentum by changing the finance minister.
In any case, it is the prime minister who is in the driving seat, and his faith on FM Jaitley, ensures there is no confusion in policy formulation and delivery.
A status quo at this juncture, apparently, would be more beneficial.