Chidambaran is likely to focus on getting more investment, both public and private, domestic and foreign, in manufacturing and agriculture because he believes that this will help generate more employment and growth With an idealist liberal economist at the helm, there''s a strong chance that the country will finally see the sort of policies that can put it on a sustainable path to genuine development and poverty elimination. The one thing that could hold them back is pressure from allies to slide back into old strategies that haven''t worked very well, if at all. A lot hinges on how Manmohan Singh and the Congress Party manage coalition politics.

P Chidambaram, elected as an MP from the Sivaganga constituency of Tamil Nadu and known as someone who was able to introduce some bold measures as part of a previous left-leaning coalition government, is a good choice for the finance minister''s post. As a pro-market reformer, but also someone who was strongly left leaning in his youth and understands the need for economic policy to keep the interests of the poor in focus, Chidambaram has the credentials to take forward the UPA''s agenda of taking the benefits of economic reforms to those who haven''t felt them adequately yet.

Faced with the pressures of coalition politics, the finance minister needs to show resolve. If his own life is anything to go by, Chidambaram has the requisite independence of mind and determination. He resisted pressure from his family to join the family business, the well-diversified MA Chidambaram group, and instead chose to study law at Madras University before doing a stint at Harvard Business School in the US.

After Harvard, he came back to India and chose to enter politics rather than slip into the more comfortable life of the family business. Standing up to strong opposition from his family, he married Nalini, a classmate from another caste.

There is also evidence of steadfastness in his political career. In 1996, after having worked on the Congress manifesto, he split with the party after PV Narasimha Rao decided to ally with Jayalalitha''s ADMK in Tamil Nadu. That''s when he helped G Moopanar establish the Tamil Maanila Congress that swept the Lok Sabha elections that year, allowing Chidambaram to become finance minister in the United Front coalition government.

Management of a coalition also requires the ability to reach intelligent compromises. His tenure as finance minister in the UF coalition would have given him some training in that art. It was only because he compromised in some areas that he was able to introduce bold measure in other areas. It''s obvious that he will have to perform a similar balancing act this time as well.

Known for his dislike of bureaucratic obstructionism and his ability to find ways around it, he is a good administrator and innovative policymaker. People close to him say he has a sharp mind that can cut through layers of complexity to see underlying issues clearly.

He gained fame as the reform-minded commerce minister who teamed up with then finance minister Manmohan Singh to launch India''s historic process of economic liberalisation in 1991.

However, his first budget, presented in 1996, was a disappointing one. It was clear that the compulsions of coalition politics were holding him back from major reform. Chidambaram said then what he is saying now: that the government would remain committed to continued economic reforms and ensuring growth and fiscal prudence, but would "address the concerns of the poor".

It was expected that the insurance sector would be opened to foreign investment, but it was not to be. He did, however, introduce new schemes for the finance of rural development and social spending by the states. The most lasting contribution of that budget was probably the minimum alternate tax on companies, an attempt to gain revenue from Indian companies that were taking advantage of the numerous depreciation allowances and investment exemptions.

His next budget, presented the following year, in contrast to the first, was popularly dubbed a ''dream budget''. It was a ''supply-side'' budget that made deep cuts in income and corporate tax rates but hoped to increase tax revenues (and reduce the fiscal deficit) through the positive effect the tax cuts would have on the growth of the economy. Chidambaram also allowed foreign institutional investors and non-resident Indians to invest up to 30 per cent in Indian companies. The financial markets were extremely happy, even though there was disappointment that Chidambaram only allowed minority foreign participation in private health insurance joint ventures. He also allocated more money for rural credit and basic services and food and fertiliser subsidies for farmers.

One of that budget''s major achievements was tax reform. In order to improve tax revenues, he introduced the innovative ''voluntary income disclosure scheme'' or VIDS, that promised tax-avoiders a limited tax amnesty, provided they registered themselves as taxpayers before the end of the year.

With the 2004-2005 budget looming large, he finds himself in a similar position — needing to effect reform while facing pressures from his leftist allies to go easy on liberalising and privatising measures. He also needs to keep within the parameters set by the common minimum programme and its laudable aim of taking reform to the poor. The difference is that this time he has a reform-minded economist for prime minister. A man who is not only likely to support efforts to introduce innovative reform, but will also have his own well thought out prescriptions for the economy.

If the new finance minister''s first presentation to the press is anything to go by, he is likely to focus on getting more investment, both public and private, domestic and foreign, in manufacturing and agriculture because he believes that this will help generate more employment and growth.

Let''s hope we will continue to see his resolve and creativity at work during this tenure.