india

Updated: Jan 01, 2019 09:22 IST

The Mahagathbandhan or grand alliance (GA) of Opposition parties to take on the Bharatiya Janata Party (BJP) is “a tried, tested and rejected idea”, Union finance minister Arun Jaitley said in an interview.

The 2019 Lok Sabha election is purely a referendum on one issue, Jaitley said, “and that is, do we want [Narendra] Modi back [as Prime Minister].” The choice for voters will be between Modi and a “vague blurred idea” of anybody else, he added. “We would love it if it [the election] becomes a presidential style one between [Congress president] Rahul [Gandhi] and Modi,” Jaitley told Hindustan Times.

Citing Telangana, the only state among the five that went to the polls recently to feature a similar grand alliance to take on the state’s ruling Telangana Rashtriya Samithi (TRS), as an example, Jaitley said it was a case of “a pro-Telangana party and anti-Telangana one” coming together to oust the TRS.

That left people confused, he said, suggesting the same thing could happen in the coming Lok Sabha elections when parties with differing ideologies come together.

“The Mahagathbandhan is an idea that scares India,” the finance minister, who is also one of the key strategists for his party, said. The larger coalition idea is already breaking “into two different ideas of a coalition”, he added. Even as the Congress, the Dravida Munnetra Kazhagam (DMK), some of the Communist parties, and the Telugu Desam Party (TDP) are trying to build a grouping, the TRS is trying to work with the Trinamool Congress and the Biju Janata Dal to form a non-Congress and non-BJP federal front.

Defending his government’s track record on issues related to the economy, the finance minister said the nearly five years of the National Democratic Alliance (NDA) rule was the only time in history that India “remained the fastest-growing economy in the world”.

The period will also go down as “the best period of fiscal prudence”, Jaitley added.

Soaring fuel prices threatened India’s fiscal arithmetic for some time, but prices have fallen sharply over the past month, and with crude oil treading below $50 a barrel, the finance minister can breathe easier.

Populist farm loan waivers by many states, including some rucked by the BJP, could threaten the fiscal arithmetic of the states though, and

Jaitley isn’t convinced they will help.

And some of the states that have announced farm loan waivers do not have the financial resources to follow through, he explained.

In his mind, Indian agriculture is better served, and the ongoing agrarian crisis better addressed, through a price-support mechanism of the sort Madhya Pradesh tried under former chief minister Shivraj Singh Chouhan, a fixed payout such as the one offered by Telangana, and focusing on improving procurement by the state.

Dismissing Rahul Gandhi’s efforts to equate the resolution mechanism for bad loans with farm loan waivers, Jaitley said he is pleased at the progress made under the new Insolvency and Bankruptcy Code (IBC), which, by his calculations, has meant that around Rs 3 lakh crore of the Rs 8.5 lakh crore of stressed assets that were stuck are now “back in the system”.

Over the past two years, under the code, he added, there had been recoveries through resolution, and in some cases, debtors “appeared on day one” of the proceedings under IBC to say, “I will pay the money back”. Close to Rs 1.2 lakh crore has been recovered thus, the finance minister said.

“The threat of promoters being thrown out of management has worked,” he added. Indeed, in some cases there has been an actual change in ownership. Jaitley said the law has been laid down clearly; the Supreme Court “has been extremely efficient and given expeditious judgments”; and there’s an ongoing effort to boost capacity because the National Company Law Tribunal which looks at bankruptcy cases is now clogged.

Neelanjan Sircar, assistant professor at Ashoka University, sounded a word of caution to the ruling party ahead of next year’s electoral contest.

“The fact that the BJP is banking on a Modi vs Rahul contest shows that they are banking more on Narendra Modi’s charisma than substantive achievements for the 2019 elections,” Sircar said. “While Modi’s popularity will definitely add a couple of percentage points of votes to the BJP, whether or not it will be able to compensate for local disillusionment is the question.”