NEW DELHI (BLOOMBERG) – Mr Pranab Mukherjee, India’s former finance minister who introduced a controversial tax rule that alarmed investors, and who later rose to become the nation’s president, has died. He was 84.
Mr Mukherjee died on Monday (Aug 31) at a hospital in New Delhi where he was being treated for lung infection. His son made the announcement via a tweet.
The veteran politician was also found to be Covid-19 positive, making him the first high-profile figure in the country to have died after being infected.
Mukherjee, often called Pranab-da – a suffix added to a name to denote elder brother in Bengali, was born in Mirati village on Dec 11, 1935 under the then Bengal Presidency in British India. He earned a degree in law, and also pursued a master’s degree in history as well as one in political science. He was a teacher and a journalist before entering politics.
He was nominated to India’s Upper House of Parliament in 1969 by the Congress party, for which he served as a key troubleshooter.
A close aide of former prime minister Indira Gandhi, Mr Mukherjee has had stints as a federal minister of finance, defence, trade and external affairs, among others. In July 2012, he was elected as head of the world’s most-populous democracy, although the role of India’s president is largely ceremonial.
His leadership of steering India’s economy in the aftermath of the 2008 global financial crisis is well acclaimed, but he will be most remembered for his tax move in 2012 as finance minister. Mr Mukherjee introduced a retrospective tax after the nation’s income tax office lost a case demanding Vodafone Group pay capital gains levies for its 2007 acquisition of the then Hutchison Whampoa’s Indian operations, spooking global investors.
Mr Mukherjee’s move was aimed at shoring up the government coffers after an economic slowdown had sapped tax revenues, leaving the economy with a yawning budget deficit – then the widest among the biggest emerging markets.
“The amendment became applicable not only to Vodafone but also a number of other cases in the pipeline, and led to the reopening” of several tax cases, Mr Montek Singh Ahluwalia, a former secretary in the Ministry of Finance wrote in his book Backstage. The Story Behind India’s High Growth Years.
“It remains to be seen how it will turn out for net revenue mobilisation.”
It was not just the country’s finances that Mr Mukherjee influenced. As minister for external affairs, he signed a deal with the former US Secretary of State Condoleezza Rice in 2008 that allowed any country to nuclear trade with India despite the nation not being a signatory to the Non-Proliferation Treaty.
Mr Mukherjee’s first stint as finance minister was in 1982, when he allowed overseas Indians to invest in locally listed companies in a bid to lure funds to help him narrow a budget gap. But that inadvertently triggered one of India’s first hostile acquisition bids.
His last stint in the finance ministry from 2009 to 2012 saw growth slowing to a near-decade low, borrowings surge to a record and perceptions of a policy paralysis grow amid corruption charges and infighting within the governing alliance.
Mr Mukherjee was last year awarded the Bharat Ratna, the country’s top civilian honour.
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