New Delhi: In another country, Palaniappan Chidambaram would be sacked for the mayhem in the markets. But here, he has the gall to proclaim that things will turn out fine, and is dutifully featured on newspaper frontpages with a smiling face. In truth, the finance minister carries no credibility with the markets, and since economics and finance are so biased towards credibility and sentiments, Chidambaram has lost the sanction to continue.

Naysayers will argue that Chidambaram is not so much to blame as Pranab Mukherjee and that the real culprits are prime minister Manmohan Singh and Congress president Sonia Gandhi. These are lame excuses. The buck indubitably stops with the prime minister and ultimately he must take the full rap for a failed government. If Sonia is all to blame, why does he remain prime minister?

But the same logic in a different form applies to Chidambaram. If the prime minister must shoulder the entire responsibility for the non-performance of the government, why have a cabinet? Why should the finance minister take any decision? Why can’t he like a docile bureaucrat simply sign on the file and let the prime minister act? By that principle, the prime minister should present the budget, not Chidambaram. The finance ministry need not have a separate existence and ought to be clubbed with the prime minister’s office.

But the fact that Pranab Mukherjee and Chidambaram fought tooth and nail for the finance portfolio with one getting ahead shows there is much going there. A whole lot, actually. Depending on the prime minister, a finance minister can also tweak the budget to a lesser or greater extent to conform to his philosophy of life and politics. Mukherjee did it with the disastrous provision for retrospective tax. And Chidambaram is hell-bent on interfering with the Reserve Bank’s primary function of taming inflation whilst doing little on the fiscal side to kick-start the economy. Going to Washington with a begging bowl won’t help.

In the rating of the key players of the 2014 election, this writer had give Chidambaram 2 upon 10 as finance minister (“Rating the contestants,” 17 July 2013). Chidambaram holds a strange power over the media. His arrogance and clipped English are confused for super efficiency and brilliance and a Harvard degree comes as the icing. This writer knew him in a small way as Rajiv Gandhi’s internal security minister in the 1980s when he was highly insecure about dynasty chamchas like Satish Sharma and later when he became P.V.Narasimha Rao’s commerce minister where he had a few run-ins with Manmohan Singh in finance on the subject of import compression.

The impression that this writer carried away from those meetings was that he was clever but not deep, a systems’ man with no vision or conviction and who was uncomfortable with big ideas. Chidambaram certainly is not prime minister material though he has vaulting ambitions in that direction. But from those early interactions and subsequent reflections, it was clear that Chidambaram was vastly over-rated. He was hugely lucky in previous terms as finance minister, when he cashed in on the good work done by predecessors or predecessor governments, but he was programmed to meet his comeuppance in a financial crisis. This is exactly what has happened.

You can’t bluff your way in the cruel world of money. Some of the sharpest minds operate there. They know what will work and what won’t. Why is wealth-creation such a tricky thing? Why do more people fail in business than succeed? Money has a terrible and ruthless way of picking winners and discarding losers. Players of money are a whole lot smarter than votebanks. They cannot be bamboozled with the financial equivalent of phoney secularism which is the mainstay of the Congress party and even Chidambaram. They will see through the con and they have made up their minds about Chidambaram. His words are not to be trusted. Check in Bombay. Until he remains the finance minister, there is no real hope for the national economy.

Would the new Reserve Bank governor joining next month make a difference? Not much. One of Manmohan Singh’s former advisors considers him too academic. Even assuming that is righted, Raghuram Rajan, the man in question, would start being servile to the ideas of Chidambaram because he got him the job, and that will hurt the economy worse. It would be a case of the blind leading the blindfolded. By the time the new governor realizes the horror of the situation, it would be late, and then he would be compelled to return to the institutional wisdom of the Reserve Bank.

With a new Reserve Bank governor, therefore, Manmohan Singh should also appoint a replacement for Chidambaram. Who could it be? It should be someone whose words carry weight in the market, is immediately credible, buoys sentiments, and returns confidence in the ability of the government to turn around the economy. Confidence-building is key. The search should begin and end with a financial genius like Hjalmar Horace Greeley Schacht who rescued the destroyed economies of the Weimar Republic and Nazi Germany and got eventually rounded up in the anti-Hitler conspiracy. The new finance minister should be a rock-solid politician with an intuitive grasp of finance and economics or a bold, independent-minded industrialist who is given a free hand.

But at any rate, Palaniappan Chidambaram has to go.