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BELATED WISDOM

The finance minister is hardly known for financial wisdom. He has served his present party twice in this capacity during its present double tenure. His first stint was characterized by thoughtless populist generosity. He showered money on unemployed villagers; in fact, he gave so much that the country ran short of such characters. The Mahatma Gandhi National Rural Employment Guarantee Scheme has attracted only a fraction of rural workers; and the average number of days they worked in a year was much less than the number they could have worked for. Similarly, the public food distribution scheme is less famous for the food it distributed than for the mountains of food it uselessly created; the mounds were so huge that the government did not have enough godowns, and had to hunt around for tarpaulins to cover the hills exposed to the skies.

While these facts sum up a certain aspect of the finance ministerís achievements, there is another which has passed unnoticed, largely because it is too recent and the world had written him off as a spendthrift. The figures of the governmentís revenue and expenditure, its borrowings and repayments, undergo slow changes. They see first light in the budget, which is a rather casual statement of intention. Then the money is collected and spent, but it happens too fast for the government to keep count. So it totals up its accounts, such as they are, and presents them at the end of the year. Then, over the next year, it goes through its accounts, spots and corrects errors and omissions, and arrives at revised estimates. If the accounts for 2011-12 are compared with the budget for 2013-14, it emerges that while the governmentís expenditure went up by about a third, this was not true of all its components. Consumption expenditure, as the cost of its employees and the ink they used is called, went up by about a quarter, but investment expenditure went up by almost a half, while financial investment and loans more than doubled.

In other words, the government tilted significantly towards asset building. If it had done so during the United Progressive Alliance governmentís entire tenure, it would have greatly expanded and buttressed the countryís infrastructure, and improved the conditions for growth; perhaps, it would have avoided the halving of the growth rate that it has achieved in the last five years. So it may be said that wisdom dawned late on P. Chidambaram; but it is to be welcomed whenever it dawns. His innings approaches its end. If the Aam Aadmi Party comes to power and be in a position to exercise influence, the country may see another bout of populism. It is never a good idea to place too much hope in Indian politics; but if one does not hope too much, one will tend to be pleasantly surprised by such about-turns as Mr Chidambaramís when they occur.