Topographically, Chidambaram’s move from the home to the finance ministry is small; from the long room in the east wing of North Block, he moves to the west wing. Now he will not have such a good view down Kingsway, called Rajpath nowadays, but he will have an unrestricted view of the Viceregal Lodge, where his immediate predecessor, Pranab Mukherjee, has taken residence.

It is a room he is familiar with. He spent a couple of years there in the late 1990s. Then, after some years in the wilderness, he was back there from 2004 till 2008; he presented all the budgets of the UPA government in the earlier term. Instead of promoted policemen, he will be surrounded by ex-collectors of customs and income-tax raiders. Some of them have rather shady reputations; they were blamed for Pranab Mukherjee’s vindictive and arbitrary last budget. He will have to be careful with them, unless of course he kicks them upstairs and gets a new team. He will have to get a new chief economic adviser since Mukherjee’s adviser preferred keeping his tenured chair in Cornell to the temporary chair near the door of North Block. Chidambaram was comfortable with his last CEA, Shubhashis Gangopadhyay, who would probably come back if asked. He also has the choice of Raghuram Rajan, who has a far better mind than recent CEAs.

Pranab Mukherjee was a uniformly average finance minister. Formidable political chess-player though he is, he never developed much understanding of the economy, and he was strongly influenced by his bureaucrats; he did not turn out much good at choosing them either. Chidambaram is much sharper; he is not likely to make such bad choices. Some may not choose to work with him. He had a famously irascible temperament. It has not been in the news recently; it is possible that he has mellowed in old — sorry, middle — age. But it is also possible that he has learnt to choose people better. He is intelligent, and easily gets impatient; if only he would surround himself with geniuses, he would have no problem.

When Rajiv Gandhi lured Chidambaram away from his lucrative practice in the 1980s, it was to bolster Rajiv’s move away from his mother’s socialism. Chidambaram is the man who began the dismantling of import controls in 1992. In the two decades that have since passed, Chidambaram has changed little in his looks. He has put on some weight, and lost some hair. But his ideology has changed radically. Political opportunism and loyalty to his political companions have taken a toll; today he would be hardly called a liberal.

In his 2004 budget, Chidambaram introduced the education cess. Taxes earmarked for particular purposes are a bad idea; it would have been more honest to raise income tax and spend more on education out of the general budget. He abolished the excise on tractors; two decades earlier, his Congress party, wedded to labour-intensity, would have considered it a sacrilege. But otherwise, he did not make major changes in taxes. His major initiatives were on the expenditure side. He gave many benefits to farmers, and provided substantial funds for water-related projects. He gave money for school meals and primary schools, and for rural health programmes. He provided modest sums for small industries and small minorities such as the Muslims. He put into action the strategy of the Congress to confront the Bharatiya Janata Party, which had ruled at the Centre for the previous seven years: whereas the BJP had spent liberally on building up the infrastructure such as ports and roads, the Congress poured money into social programmes, better calculated to win votes. Chidambaram promised to triple bank loans to agriculture; the promise was implemented. He also promised to honour Jaswant Singh’s Financial Responsibility and Management goals; neither he nor his successor did.

In 2005, Chidambaram brought down maximum individual income tax to the corporate tax rate, which was sensible, but then showed his lack of understanding by taxing corporate perquisites. That was double taxation, since the perquisites were also added to the employees’ incomes. Luckily, it could be evaded by abolishing the perquisites and adding them instead to employees’ incomes. He also raised the tax on cigarettes and gutka, in the footsteps of many a mindless finance minister. Nine-tenths of tobacco is consumed in the form of biris, which no finance minister taxes, because biris are made by poor villagers. He imposed a securities transactions tax, which had largely a nuisance value. But Chidambaram’s stupidest move was to put a tax on bank withdrawals over Rs 10,000. It was withdrawn before long.

In 2006, Chidambaram promised to bring down the fiscal deficit ratio to 3.6 per cent. His reasoning was that since nominal national income was rising at 20 per cent a year, he had to hold back expenditure only slightly to bring down the deficit. But he could not put even that slight brake; he and his successor continued to make promises of fiscal probity which they never kept. Next year, he promised to introduce a general sales tax by 2010; it has not been introduced till today.

In 2008, Chidambaram reduced many customs duties; they took up many minutes of his budget speech, and sounded good. But most of the reductions were token ones. This happens often. The minister tells his bureaucrats that he wants to bring down taxes; the bureaucrats suggest lots of little reductions which add up to nothing. Surely someone of Chidambaram’s intelligence should know when bureaucrats try to pull wool over his eyes. But then, he is in the same business; he started the extremely costly social programmes, which are supposed to benefit the poor but only fatten lower-level politicians and functionaries.

He also announced that the Forward Markets Commission would soon ban forward trading in wheat and rice. He had so many bright economists around him that it is difficult to believe that none of them told him about the ineffectiveness of bans on forward trading. It is the overall demand and supply situation that determines the price trend; forward trading only smoothes the trend. The way to influence inflation is by influencing total demand, or total liquidity in the economy, and not by controlling the markets.

So in my view, Chidambaram’s performance as finance minister was indifferent. He did some good things, but he also made many mistakes. And there was no consistency in either; he was not acting out of a firm set of intellectual convictions, right or wrong. He was an economic sharpshooter; one never knew whom he would shoot.

One may be inclined to infer that he would be a bad finance minister — that he would be very active, but that there would be no logic or pattern to what he would do. That would not necessarily be wrong, but it would be extrapolation of a trend which, as any good forecaster would tell you, is stupid. What matters in forecasting is guessing the turning points, not the trends. I cannot predict a turning point in Chidambaram’s trajectory, but in view of his intelligence, it would be an error on my part to rule it out.