Palaniappan Chidambaram should not really have any regrets over his sudden departure from the finance ministry last month.

One, he was shifted to the home ministry, which was badly in need of the services of an efficient minister at its helm. Chidambaram was an ideal choice to be the central government's home minister at this hour of an acute internal security crisis. So it was a vote of confidence in him.

Two, if he had remained the finance minister in the Manmohan Singh government till the end of its tenure, his record as the central exchequer may well have been sullied a bit.

Consider the following. The Centre's fiscal deficit was 4.5 per cent of gross domestic product (GDP) in 2003-04, which was the last year of the Vajpayee government's tenure. As finance minister in the Manmohan Singh government, Chidambaram reduced the fiscal deficit in each of the first four years. It came down from 4 per cent in 2004-05 to 3.1 per cent in 2007-08.

He had projected the deficit to come down to 2.5 per cent in 2008-09. But the huge expenditure planned in the current fiscal year (thanks to higher subsidies, more pay for government employees, a farm debt waiver scheme etc.) ensured that the fiscal deficit would have been close to 4.5 per cent of GDP.

He had already begun realising that he would have to pay the political price for keeping the electorate happy in a year in which the ruling party was scheduled to go for general elections. He might not have been happy, but had no option.

Now, after Chidambaram has exited the finance ministry, there is a fresh dose of extra expenditure that threatens to widen the fiscal deficit to five per cent. Mind you, this deficit figure does not account for the huge off-budget liabilities on account of the bonds issued to oil and fertiliser companies to help them meet the costs they incur on selling petroleum products and fertilisers at subsidised prices.

If you include these bonds, experts say, the actual fiscal deficit for the current year may well be over 8 per cent. That is a record Chidambaram would not have liked to be associated with.

Take inflation. After struggling with an average inflation rate of 6.5 per cent in 2004-05 (based on the rise in the wholesale price index), Chidambaram succeeded in bringing it down to 4.4 per cent in 2005-06. In the following year, the inflation rate again went up a little to 5.4 per cent, but was brought under control at 4.67 per cent in 2007-08. This was a fairly impressive record.

What is likely to happen in 2008-09? The annual average inflation rate so far in the current fiscal year is 10.7 per cent (even though the point-to-point inflation rate for the latest week has come down to around 8 per cent).

Experts say that assuming that the wholesale price index sees no further upward movement during the remaining weeks of the year, the average annual inflation rate for the current year would be between 7 and 8 per cent. Which finance minister would have liked this?

Even on the GDP growth front, the performance in 2008-09 would see a clear decline. Chidambaram started his stint in the Manmohan Singh government with 7.5 per cent growth in 2004-05. In the three years that followed, the economy grew by over 9 per cent per annum.

But the last year of the Manmohan Singh government may see the economy return to a much lower growth rate of 7.5 per cent, ironically the rate at which the economy grew in the first year of the Manmohan Singh government.

Note that in each of these areas -- deficit control, inflation management and growth -- the Manmohan Singh government will be ending its tenure with a marked decline in performance.

In sharp contrast, the Narasimha Rao government (which had Manmohan Singh as the finance minister for all the five years), recorded a steady, though slow, improvement in its performance in each of these parameters. Inflation, raging in double-digit levels in the early 1990s, began declining and was 8 per cent in 1995-96. GDP growth moved up steadily to 7.3 per cent and the fiscal deficit declined to 4.1 per cent in 1995-96.

Who would history remember as the better finance minister?