The author, I should say straightaway, is a former colleague and dear friend. He walks us through the stresses and strains of each Finance Minister’s term in office. His treatment of a dreary subject is deft and light. His lifelong commitment to neutral reporting is plainly evident throughout the book.
Three years ago, I had written about Volume 1*. This very short and necessarily unsatisfying summary is about Volumes 2 and 3 that cover the years from 1977 to 2014. Well researched books like these volumes reveal hitherto unknown facts on how things happened rather than just what happened.
Volume 2 starts in 1977 which saw the first non-Congress government at the Centre. It was therefore natural to expect a budget that marked a clear break from the past. But those who made that budget were old school and stuck to the roads well-travelled by.
Not that there was a dull moment during the life of that first non-Congress government. Thus in 1978, India saw its first demonetization. In 1979 it saw the budget deficit cross 1,000 crore for the first time.
The world forgot India in the five years from 1980 to 1984. But 1985 started with a bang. In October 1984 Indira Gandhi had been assassinated and her elder son, Rajiv, had been sworn in as Prime Minister. He decided to reform the economy and his Finance Minister, VP Singh immediately cut the incidence of income tax in the budget of 1985. It galvanized the country. Bhattacharya gives a detailed description of all that happened. If you are looking to see where and when wide ranging reform started, there is no better place to start. It more-or-less settles the debate about who initiated market friendly economic reforms–Rajiv Gandhi and VP Singh.
By mid-1987, however, Singh had turned against Rajiv who was then forced, after a series of political reverses, to stop reform and start fiscal profligacy. That led, eventually, to the balance of payments crisis of 1991.
By then Bhattacharya was heading the news gathering sections of the Economic Times. Few journalists had a better seat at the ring. That’s why his account of the crisis and the government’s response—both when Chandra Shekhar was Prime Minister for six months from January to July 1991 and after PV Narasimha Rao became Prime Minister—is as authentic as it gets.
The details are well known. What’s not so well-known is what was happening in the background, especially when Yashwant Sinha was Finance Minister in the first six months of 1991. Bhattacharya shows how incredibly skillfully and successfully Sinha and his Prime Minister, Chandra Shekhar, navigated the crisis. But as often happens, it was Manmohan Singh who became Finance Minister after the general election of 1991, and took all the credit for the groundwork that had been laid for the now famous reforms of 1991. Bhattacharya knew Dr Singh well but doesn’t refrain from giving credit where it is really due. He does it quietly and without undue emphasis. That understated style too is a major strength of these volumes.
It might sound harsh but there has been only one memorable budget after the 1991 one, in 1997 when P Chidambaram, as the Finance Minister of a non-BJP coalition, further reduced income taxes. It came to be known as the ‘Dream Budget’ and once again hugely changed the mood in the country.
After that much of the reform moved outside the budget. The biggest reform, the expansion of the service tax, remained within the budget for obvious reasons.
Bhattacharya was by then the executive editor of the reborn Business Standard where he once again had the ringside seat. By now he had the sort of access that most journalists can only dream about. But unlike some other such journalists, he doesn’t tell us what was said privately to him.
That makes his narration of the budgets, and what the Finance Ministers were attempting through them, an invaluable and unbiased source for the future economic histories and historians. The matter-of-fact narration without any literary and gossipy flourishes, is most helpful in keeping the focus on the essentials.
As you read through these volumes you begin to understand why India does both badly and well simultaneously. Bhattacharya’s account reveals in sharp relief the basic premise of Indian economic management: continuity for 99 percent of the time and a sharp poke in the rib just once in a while: 1958, 1985, 1991, 1997.
I can only end by repeating the salutation that Paul Samuelson, the Nobel laureate in Economics for 1970, wrote for a book by another giant of economics, Sukhamoy Chakravarty: Bon apertif.
*See review, The Book Review, Vol. 47, No. 8, August 2023
TCA Srinivasa-Raghavan, columnist with the Business Standard, is the author of Dialogue with the Deaf: The Government and the RBI (Westland, 2017), Politics by Other Means: A Brief History of Indian Budgets (Kindle edition, e-book) (Westland, 2018) and co-author of All the Wrong Turns (Amazon, 2019).