Pranab Mukherjee and the Future of Indian Politics

Through his second stint as finance minister, Mukherjee presided over the decline of the Indian economy from growth of nine percent to six percent. Reforms slowed down and key indicators went into reverse. The global turmoil and coalition partner inflexibility have been blamed, but several episodes and their consequences can be traced to the finance minister's doorstep. Pranab cleverly assumed to the finance ministry the role of an arbiter over all regulators as a result of a quarrel between the securities and insurance regulators, thus taking away from the Reserve Bank of India a part of the autonomy that ought to be its.

Then again came a time where the retrospective tax laws signaled in the last budget shook foreign investors' confidence at a time when foreign direct investment was sorely needed to counter the rising current account deficit in the country.

A range of measures have been signaled that will add to the country's foreign debt and increase its stock of volatile short-term capital.

Mukherjee is a pre-reform politician with strong political skills. By supporting him, Mulayam Singh Yadav and party may be indicating the culture of governance that they are comfortable with. Contrastingly, Jayalalithaa and Naveen Patnaik are, if anything, pro-reform and Mamata Banerjee could go with anything as long as West Bengal's needs are taken care of.