Arun Jaitley, the former finance minister of India
The passing of Arun Jaitley, the former finance minister of India, offers a chance to assess his legacy. History will judge him to have overseen some of the most momentous financial moments in the country’s modern history.
Jaitley was minister of finance and corporate affairs under Narendra Modi’s first government, from 2014 to 2019; he declined to be part of the next government following Modi’s election this year, citing ill-health.
The biggest change he drove through under his tenure was tax reform, and in particular the introduction of the goods and services tax (GST).
It was not popular at the time: many smaller Indian businesses in the informal economy had never paid taxes. It was complicated, and beyond the reach of many it affected: at the time the Confederation of All India Traders said that one in three of its 60 million members did not have a computer to register on the government’s tax network.
But go through it did. In the month of April 2019, Rs1.139 trillion ($15.9 billion) was collected in GST, a vital level of state income in a country with a widening fiscal deficit. India’s fabulously complex tax environment was simplified – not completely, but it improved – and the country has gone from 172nd to 121st in the World Bank’s ease of paying taxes index since the GST was introduced.
Equally momentous, though more associated with Modi than Jaitley, was the extraordinary demonetization programme that took place one night in November 2016, with the withdrawal of large denomination banknotes from supply in order to try to avoid crime and bring the informal sector into the financial mainstream.