A lawyer-turned politician, Arun Jaitley, who passed away on Saturday, was one of the most important leaders of the BJP. He often acted as the chief troubleshooter of the party. He was also a trusted lieutenant of Prime Minister Narendra Modi. Modi had given him the responsibility of three ministries —finance, defence and information and broadcasting — when he first took office in 2014. He was unable to continue as a minister in Modi’s second tenure due to poor health.
Jaitley's urbane and articulate manner helped him win friends across party lines and industry. But Jaitley’s record as FM was largely mixed. No doubt, in the first five years of the Modi government, Jaitley was instrumental in steering through parliament major economic legislation such as the bankruptcy code and a nationwide goods and services tax, which had languished for nearly two decades. Jaitley loyally carried out some of Modi's more controversial economic initiatives, including tax and welfare reforms and overnight demonetisation — which took 86 percent of cash out of circulation. Jaitley fervently defended demonetisation and GST, saying they led to the higher formalisation of economy resulting in higher direct tax revenue and greater number of income tax return filings.
Most analysts and economists disagree. Both the moves, owing largely to poor implementation, have taken the wind out of the economy. Demonetisation left hundreds of millions of people temporarily without funds and GST has been blamed for the severe cash crunch of businesses. In February this year, Jaitley announced a federal budget with a string of populist giveaways, from affordable housing to a health plan for millions of poor people, in an attempt to woo voters ahead of May's election. India's stock market took a hit after Jaitley announced a 10 percent tax on some long-term capital gains, saying stock market returns were "quite attractive and it was time to bring them under the ambit of capital gains tax". Soon enough, the economy began to lose steam. India was the world's fastest-growing economy in 2018. But growth is now faltering. Economic growth slowed to a five-year low of 5.8 percent in January-March with consumer spending and corporate investment faltering. Declining industrial output and automobile sales also raised fears of a deeper slowdown. On Friday, the government was forced to act to revive the economy. It rolled back a surcharge on foreign portfolio investment and announced steps to lower interest rates on home and auto loans to boost the economy.