So Nirmala Sitharaman has remained unchanged as Finance Minister since 2019. She will present her sixth Budget tomorrow.
This long stint raises the question: Why do prime ministers change their finance ministers? What must a Finance Minister do to stay in the job?
There are some finance ministers, of course, who quit on their own. There are three in this last category that are prominent: John Mathai in 1952, CD Deshmukh in 1956 and Morarji Desai in 1969.
Mathai disagreed with Jawaharlal Nehru on the setting up of the Planning Commission and resigned. Deshmukh was opposed to the bifurcation of the old Bombay presidency.
Mrarji disagreed with Indira Gandhi over control of banks: nationalisation or social control.
The rest have either been reshuffled or have seen their governments lose the general election.
This last isn’t a very interesting category except for the one who changed his party to become, and remain, the finance minister. He presented 10 budgets under two different parties.
So the only interesting cases are those removed — or not.
The rapidity record for removing finance ministers goes to Rajiv Gandhi. Excluding himself, he had three finance ministers in his five years as Prime Minister: VP Singh, ND Tiwari, SB Chavan.
His grandfather did better. Excluding himself, and not counting Liaquat Ali Khan in the interim government of 1946, he had four in 17 years.
Indira’s fickleness
Indira Gandhi, too, had a problem with finance ministers. Her first Finance Minister was Sachin Chaudhary. He was replaced by Morarji Desai who was replaced by YB Chavan who was replaced by C Subramaniam who was replaced by R Venkataraman who was replaced by Pranab Mukherjee.
That’s six in 16 years as Prime Minister or one every two-and-a-half years. No one has explained this fickleness satisfactorily.
When Morarji became Prime Minister he had two finance ministers in 26 months. He was forced to remove the first one, HM Patel, by the Home Minister, Chaudhary Charan Singh — who then removed Morarji himself!
VP Singh was removed by Rajiv under corporate pressure even though he had reduced the tax rates.
But he was going after corporate tax evaders and had to go himself, instead. ND Tiwari was removed for incompetence and SB Chavan went when Rajiv lost the 1989 general election.
FMs vs PMs
It’s an interesting nugget that three finance ministers displaced their prime ministers: Morarji Desai, Charan Singh and VP Singh. A fourth, Manmohan Singh did become Prime Minister but largely as a placeholder for Prince Rahul Gandhi.
In 2002 Yashwant Sinha was removed and sent to external affairs. That seems to have been an internal party affair. He had been Finance Minister briefly in early 1991 also before Rajiv Gandhi pulled his boss, Chandrashekhar down.
In 2008 Finance Minister P Chidambaram was sent to the Home Ministry. This was the sole political response of the Sonia-Manmohan government to 26/11.
Nirmala Sitharaman thus joins a very select group of finance ministers who have not been removed, for either good or for bad reasons, despite a long innings.
That group had two others only: CD Deshmukh and Manmohan Singh.
Hence the question: what do such finance ministers do right that prime ministers keep them on year after year?
In the end it boils down to good old trust. In the case of Deshmukh and Singh it was professional trust. Both had held very high posts including that of governor of the Reserve Bank Bank of India.
Sitharaman’s stint
Sitharaman has none of these attributes. But what she does have is doggedness in solving problems and a very light administrative touch. Even the Opposition can’t complain about the way she runs the ministry. Indeed, even her party people haven’t been complaining about her barring the usual and expected grumbling.
Do finance ministers listen to their prime ministers? Some of the more arrogant ones are known to have ignored or defied the boss. This can and does create very difficult situations, especially if the Finance Minister has strong support, either political or corporate.
The opposite can also be true if the Finance Minister has neither. Then the evidence suggests that the Prime Minister and the Finance Minister get along splendidly. It’s called knowing your place.