Public sector bankers are probably delighted that Montek Singh Ahluwalia is not a Lok Sabha member. For, it has saved them the trouble of repeatedly visiting a constituency and footing the bill to launch new products or open branches at mega events there.

Instead, many of them have been concentrating on Yojana Bhawan, which seems to have replaced Sivaganga in Tamil Nadu as the hotspot for public sector bank chiefs.

While this may be dismissed as hearsay, there is nothing better than an advertisement on the front page of many dailies last week which reflects the changing power equations. A bank, which was launching a new product, had Ahluwalia’s picture on top.

One really needs to go back and see if there was any other deputy chairman of the Planning Commission who received such prominent display.

Of course, Home Minister P Chidambaram, the Lok Sabha member from Sivaganga, continues to hog the limelight at events such as a branch launch or even the launch of operations of an insurance company promoted by some public sector banks. It may be attributed to a commitment made before Chidambaram moved from one end of North Block to another. Besides, a home minister is one of the key members of the Union Cabinet. But they are no longer in Sivaganga.

After Chidambaram’s exit from the finance ministry, it is the Planning Commission which provides major inputs in key government appointments and recommending extensions.
Ahluwalia is seen as the key player in the present economic set up and more importantly, the former finance secretary is said to be the man Prime Minister Manmohan Singh trusts the most.

Till recently, finance ministry officials would dismiss Planning Commission’s suggestion as something that sounded good in theory but was not practical.

So, a large number of spending proposals were trimmed. But that is no longer the case. Planning Commission’s suggestion to give the fiscal and revenue deficit targets a miss to focus on social sector spending may have been ignored for at least three years, but at a time when stimulus packages are fashionable — and necessary — Fiscal Responsibility and Budget Management Act is very much on the backburner.

There was a time no so long ago when finance ministry officials took pains to explain that the Planning Commission’s suggestion to use India’s growing foreign exchange reserves to fund infrastructure was not legally tenable.

But all that has changed there is now growing acceptance of everything that comes out of Yojana Bhawan. It can also be gauged from the fact that finance ministry plays second fiddle to Planning Commission when pump priming is done to stay away from the effects of the sub-prime problems, affecting almost all economies.

Similarly, term finance institutions are no longer termed as things that are well past their expiry date. While ICICI, IDBI, IFCI and IIBI may be things of the past, there are new players such as India Infrastructure Finance Corporation, which issue government-guaranteed tax-free bonds — again said to be Planning Commission’s idea.

And, bankers usually do not miss out on emerging trends which explains why there is more focus on Yojana Bhawan than on Sivaganga.