A visibly relaxed Pranabda, as the Finance Minister is popularly known, on Tuesday bid farewell to his North Block office to stake claim for the ceremonial office of the President of India.

His exit from North Block comes at a time when the economy is not in great shape with faltering growth, high inflation, risk of sovereign rating downgrade and twin deficits that are virtually beyond control.

The sharp slide in rupee against the dollar over the last year and the retroactive legislation on the tax front have not helped bolster foreign investor confidence.

Although many feel that his latest Budget scared away foreign investors, Mr Pranab Mukherjee, defended his decisions as Finance Minister.

Often tied down by political compulsions in taking key decisions or pushing reforms ahead, Mr Mukherjee’s stint saw no big-bang reforms on the banking, insurance and pension front.

Mr Mukherjee was at the helm of the Finance Ministry when two major crises — global financial crisis of 2008 and Euro Zone debt crisis — had adversely impacted emerging markets like India.

The volatility in crude oil and metal prices worsened the economic situation for India, despite strong performance on the export front in the last decade.

But his astute stewardship of the economy in 2009 helped it face the turbulence of the global financial crisis of 2008-09. This, however, came at a stiff price of a fiscal stimulus equivalent to 3 per cent of GDP.

While India’s economic growth came down merely to 6.7 per cent in 2008-09, the subsequent two years saw GDP growth of 8.4 per cent. The Indian economy is estimated to have grown 6.5 per cent in 2011-12.

Bowing out of active politics, Mr Mukherjee told reporters outside his North Block office that not all his decisions may have been right, but “I have taken those decisions keeping in view the interests of the people”.

While the global financial crisis of 2008 was tackled through a big fiscal stimulus, the latest round of economic woes has put the Government in a spot in the absence of any fiscal ammunition.

So the Government has been largely relying on the RBI’s monetary policy to get the economy out of the woods.

Being the shrewd politician, Mr Mukherjee told the waiting newspersons,“You have many questions to ask me, but today, which is my last day in the Ministry, is not the day to open any new dialogue (with the media)”, adding that he was embarking on a new journey.

PM writes to Pranab

In a late evening letter to Mr Mukherjee, the Prime Minister, Dr Manmohan Singh, said he has received the resignation letter dated June 26. Mr Mukherjee's resignation from the Union Cabinet has been forwarded to the President with the recommendation that it be accepted with immediate effect, the letter said.

> krsrivats@thehindu.co.in

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