In the contested field of Indian politics, one of the few assessments that are beyond dispute is that Manmohan Singh was India’s most outstanding finance minister. He liberated the Indian economy and thus ushered in a new era of growth and promise. A few weeks back he had begun his second innings as finance minister but decided on Tuesday to end it by handing over the finance portfolio to P. Chidambaram. It is not clear why the prime minister chose to do this. After this year’s budget, which had poured cold water on investor confidence regarding India, Pranab Mukherjee’s elevation to the post of president and Mr Singh’s assumption of the finance portfolio had somewhat restored the sentiments of potential investors. There was the expectation that the man who had inaugurated India’s epoch of economic liberalization would push forward the agenda of economic reforms and put the economy back on the growth path. No one apprehended then that the prime minister was merely carrying out a holding operation till he found an able successor. Even those who will regret Mr Singh’s exit from the finance ministry — and their numbers are legion — will find it hard to deny that Mr Chidambaram is a worthy successor.
Once Mr Singh had made up his mind that he was not going to keep the finance portfolio for any length of time, his priorities were clear and choices limited. Under the circumstances, with the economy on the brink of a crisis, he could not afford to appoint someone who was unfamiliar with the way the finance ministry works. The new incumbent could not have the luxury of a learning period. Moreover, the new minister would also have to be committed to reforms. This almost automatically narrowed the choice down to Mr Chidambaram, who had served as finance minister and who is passionate about economic reforms. Thus investors should not be unhappy at all with Mr Chidambaram’s appointment. His track record in the finance ministry confirms his enthusiasm for reforms and there are no grounds to fear that he will suddenly go into reverse or neutral gear so far as reforms are concerned. No one doubts Mr Chidambaram’s abilities — he has a surfeit of it. But like most able and gifted individuals, Mr Chidambaram does not suffer fools gladly. Officials in North Block might find this too much of a contrast after Mr Singh’s innate humility.