Budgets have ceased to be about a big idea—the way, say, Manmohan Singh's presentation in 1991 was—but Chidambaram has strived to stamp each of his with one bold thought, if not more.

The boldest came in what is referred to as the 'dream budget', in 1997 in a Deve Gowda-led coalition that lasted 10 months, when he slashed the highest tax rate to 30% for individuals and 35% for companies, from 40%.

India ended up a peak tax rate that was lower than many developed countries and the 40% recommended by a Tax Reforms Committee.

"This called for considerable courage and he mustered it," says a fiscal expert who has served in various government committees in the last 20 years.
He declined to be named as he holds a government position and is not authorised to speak on such matters.

This fiscal expert says Chidambaram's thinking was that lower rates, backed by greater accountability, would increase compliance. He was proven right.

In 1995-96, a year before the cut in peak rates, personal income tax accounted for 14% of gross tax revenues.

By 2011-12, that share had increased to 18.5%. Similarly, in 2004, Chidambaram set a target to double agricultural credit in three years. It was done in two.

By 2008, when he moved from finance to the home ministry, bank credit to agriculture—which employs half of India's workers—was Rs 2,00,000 crore, against Rs 60,000 crore in 2004.

A Reserve Bank of India paper in 2009 concluded the spike in credit had a "significant impact" on agri production even though small and marginal farmers did not have great access to institutional credit.
"He takes his job seriously," says Surjit Bhalla, managing director of Oxus Investments, a Delhi-based economic advisory and research firm. "He identifies the task ahead and goes about achieving it methodically. The task now is to keep the fiscal house in order."

REFORMER ALWAYS, POPULIST WHEN NEEDED

For all his reformist and market-friendly credentials , Chidambaram is not averse to resorting to a dose of populism to make a big political statement. Even if it challenges popular, even his own, notions of fiscal rectitude.

In 2008, a year before general elections, Chidambaram announced a scheme to waive farm loans, which ended up touching 36.8 million farmers and cost the government Rs 65,000 crore.