On a delicate balancing act

As a military brass band played the national anthem to close the induction ceremony for India's new ministers, the ministers stood, some at attention, some slouching. One, however, not only stood ramrod erect but also sang the anthem: P. Chidambaram.

India's new finance minister is an unabashed idealist. That explains in large measure his starchy manner, which at times extends to the acerbic. He sets high standards – for himself and for others – and will not suffer fools or sycophants.

He was once returning from a foreign trip when he was finance minister the first time round – in the United Front government from 1996-98 – and told the officer in charge of the customs shift at New Delhi's Palam airport to charge duty for the scanner he had brought with him.

When the officer politely informed him that it was within his import limit, he fixed her with a steely stare and told her coldly that he wanted duty to be charged. Of course it was. He was the officer's boss's boss's boss.

Chidambaram began life with a sliver spoon, the scion of a family of industrialists in Tamil Nadu, but his idealism turned him early in life into the leader of Chennai's bus driver's union. He was not just left-leaning, he was a flaming red Communist in those days. Chidambaram's experience, study and reflection has gradually brought him round to the realisation that greed is the engine that drives economic growth and thus prosperity in society. Asked if he means the profit motive or naked greed, his answer is pat: "Greed."

He is talking of course of greed as a socio-economic motive force. That does not mean that he subscribes to that disease so common among Indian politicians: greed for lining one's own pockets. His official bungalow when he was finance minister the first time was among the most simply furnished one could find, Spartan in fact.

Idealism caused Chidambaram to risk political oblivion when he defied the Tamil Mannila Congress' decision to reunite with the parent Congress, insisting that the party must first make a policy decision not to ally itself with Jaya-led AIADMK. He was and remains unwilling to be associated with the Tamil Nadu Chief Minister's high-handed politics.

Chidambaram may have come a long way from his early Communist notions but he showed recently that he remains sensitive to workers' rights. When the Tamil Nadu government sacked leaders of a government staff employees union, he represented them before the Supreme Court.

He acknowledges that he believes that some of India's economic laws are archaic, even at times counter-productive, but he also believes that a country with such huge poverty and unemployment cannot afford to leave the working class without any protection.

It is his conviction and idealism that powered Chidambaram to push through his reformist agenda in negotiations over the United Front government's Common Minimum Programme in 1996. He found it easy to trump the arguments of CPI(M) ideologue Sitaram Yechury in the drafting committee, having come to his market-oriented convictions from the very Communist axioms that Yechury based his arguments on.

This time, Prime Minister Manmohan Singh and Chidambaram have compromised on such matters on divestment from profit-making public sector units, tax reform, labour law reform and subsidy cuts. Their decision probably stems less from the pressure of the Left than Congress's assessment that the economic reforms of the Narasimha Rao years hurt it at the hustings – like the BJP more recently.

However, Chidambaram has to contend with the skittishness of foreign institutional investors who are perhaps influenced by the unease of US policymakers about the new Indian government's foreign policy agenda as much as by the slowdown of reforms.

The impact that those foreign institutional investors have had on the markets since the new government took office indicate that Chidambaram will have to call into play over the next few months not only his idealism but also every reserve of political and administrative acumen.

HIGH STANDARDS

Among the best

• Chidambaram, 58, was elected from Sivaganga in Tamil Nadu under the Tamil Democratic Forum ticket.

• Master of Business Administration from Harvard University and Bachelor of Law from Madras University.

• Made his debut in 1984 general elections and won the Shivganga seat in the next four elections in a row. The winning streak ended in 1999. Re-elected from the same seat for the sixth term.

• Junior minister for commerce, personnel, administrative reforms, training, public grievances and pension. Junior minister for home and in-charge for internal security. Junior minister for commerce with independent charge. Minister of Finance and Law and Justice between 1996-1998 in the United Front government.

• Rated as one of the best finance ministers of the country.