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Sreedhar Pillai

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Will Harvard Boy Chidambaram Make India The Promised Land Again for American Business?

Posted: 08/10/2012 1:09 pm

There are ways to test the worth of things. But the means of real tests are always harsh and bruising like the touchstone on which you rub your gold nugget to see if it is genuine. For Harvard, the proof of the pudding is when its alumni get roasted in the harshest ovens of real life business and come out shining.

Palaniyappan Chidambaram, an alumnus of Harvard, is about to prove his worth with another stint as India's Finance Minister. But in his case, his nemesis and his biggest distracter is also an ex professor of Harvard, Dr Subramanian Swamy.

The problem is that, to gain the confidence of foreign investors, Chidambaram has to find ways to arrest and reverse the powerful negative trend in India's growth which has ended up in a yawning gap in the nation's fiscal balance and high inflation, left behind by his predecessor and the new Indian President Pranab Mukherjee. Perhaps this was also the main reason behind the decision of the UPA leadership to project Pranab Mukherjee as the presidential candidate.

Moreover, since his last stint, despite the confidence of the political leadership he enjoys and repeatedly publicly proclaimed by the Prime Minister, Chidambaram is confronted with a variety of allegations from electoral tinkering to corruption.

While being the country's Finance Minister, Chidambaram has also to fight off extreme political attacks and damaging allegations of corruption, pending legal scrutiny in the courts, which Dr Swamy and the main opposition BJP are spearheading, making his task really daunting for any politician.

To be fair to Chidambaram, he has already been credited with some convincing reforms to India's archaic investment framework during his stint as the Finance Minister during the previous government of the United Progressive alliance of Sonia Gandhi.

Though Chidambaram had to leave the position in the Finance Ministry with an unfinished agenda in the wake of the 9/11 Mumbai Terror attack to take over the Home Ministry, at the behest of the party leadership, unfortunately, no one gives him the credit for stabilizing the country's governance and internal security with swift and decisive actions. Like everywhere good acts in politics have no rewards in India too.

However the impressive measures of modernisation and reforms he undertook as the finance minister is much recognised by the foreign and Indian business community.

In fact this is the main reason why the sentiment of foreign investors has been boosted raising the NIFTY a couple of hundred points since his elevation, from the beginning of the month, as the Finance Minister by the Prime Minister Dr Man Mohan Singh.

Though the political baggage he has to carry is making his task of putting the country's economy back on track extremely hard, his task is in fact not only important for India and its future but is vital for the survival of the UPA and its success in the elections to be held in 2014.

It is this imperative against which Chidambaram's mettle being tested which makes his actions and steps so vital to the world investors looking for successful business in India. It looks like the UPA leadership has realised that it is time for decisive action if the government has to expect another term after the next elections. This will certainly strengthen the hands of the new Finance Minister, giving hope to the investors in India and abroad.

However, a host of other issues from land reforms to mining and power generation which are outside of the Finance Minister's control also need to be sorted out on extremely high priority, which will decide Chidambaram's success in turning the economy around.

So far, it looks like Chidambaram has been successful in boosting the sentiments by quick and decisive measures and steps everyone has appreciated. Whether he will be able to carry through the political anarchy which modern India is turning in to through the so called civil society and anti corruption movement of Anna Hazare and others is a matter to see.

If what Harvard instilled in the Finance Minister by his education will stand him in his seemingly gargantuan tasks of being decisive and taking assertive actions in the face of furious opposition, the world famous university can really be proud.

 

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