To the Brink and Back: India’s 1991 Story (20 page)

The
Chelliah Committee set up by the finance minister made far-reaching recommendations; these formed the backbone of the budget proposals on both direct and indirect taxes presented in February 1992 and 1993.

On 31 August 1991, the prime minister addressed a well-attended session of the All-India Kisan
Congress, which was chaired by the senior Congress leader
Ram Chandra Vikal, who was also a member of the CWC. Vikal attacked the government’s policy strongly and was joined by many others, including
Ram Naresh Yadav, a former chief minister of Uttar Pradesh.

The prime minister heard all of them patiently and then spoke his mind out for over an hour. He defended the budget and the industrial policy reforms, giving a background to why they were necessary. He admitted that two years of mismanagement of the economy had forced India to go to the IMF, but reassured the audience that there was no question of being defeated or capitulating to the Fund. He also ruled out going back on what had been done. Further, he exhorted those present to actually spread the message of his government’s enterprise at averting a grave economic crisis and at giving a new direction to the economy consistent with
Indira Gandhi’s vision.

It was a typical
Narasimha Rao performance, but his audience was still sullen and refused to be mollified. Their main grouse remained the hike in urea prices.

⁷⁸
More of this gets elaborated in the chapter, ‘A Final Word’, in
Narasimha Rao’s unpublished self-portrait titled
Two Crucial Years: India under Shri P.V. Narasimha Rao’s Stewardship
.

2 September 1991, a Monday, began, as always, with my being at my desk in South Block at 8.30 a.m. After about an hour,
A.N. Verma called me into his chamber. After exchanging pleasantries, he asked me for an update on what I had been doing, since he had been away for a few days. I told him that just two days back the prime minister had separately met delegations from the three national industry associations—the
Confederation of Engineering Industry (
CEI, later to become the Confederation of Indian Industry [
CII]), FICCI and
ASSOCHAM—for which I was also present. The meetings were very useful and a number of suggestions had been made by the various captains of industry and business. I gave
Verma a run-down of these suggestions. While several industrialists had wholeheartedly supported the policies announced in July 1991, some of them were still a bit hesitant about the big opening up to foreign investment. Verma listened to me patiently and asked for a set of action points for him to follow-up.

After about ten minutes or thereabouts, the principal secretary coolly dropped a bombshell—that the prime minister wanted me to be ‘transferred’ to the
Planning Commission. I was shocked beyond words and asked him whether anything was amiss. Verma was at pains to point out that
Narasimha Rao had specifically asked that I be designated as officer-on-special-duty to the deputy chairman of the Planning Commission and showed me official communication to that effect. He said that the prime minister had praised my contribution and wanted me in the Planning Commission to give shape to the Eighth Five-year Plan which was under preparation. The principal secretary told me repeatedly that he had himself lauded my work on more than one occasion and that the prime minister had agreed with his assessment.

I was convinced that I was being sacked. What baffled me completely was that just forty-eight hours back, the prime minister had asked me to attend his meetings with the three national industry associations—meetings that, in fact, he had asked me to organize. After the discussions were over, he had not given any indication that he was about to jettison me—asking me, instead, to follow-up on the meetings. His decision was (and remains) inexplicable to me.

Hence, I sought time from the prime minister and he saw me in the afternoon of that very day at around 4 p.m. He told me, in no uncertain terms, that he appreciated my work and what I had done in the initial days of his tenure when things were so grim. He went on to repeat what Verma had already told me—that the main objective of his getting me into the PMO had been achieved, and that he now believed that I could assist
Pranab Mukherjee in the
Planning Commission. I kept asking the prime minister whether I had done anything to invite his ire and wrath, but he kept denying that he was shunting me out—which I insisted he was. When I persisted, he said that I would continue working with him since he was the chairman of the Planning Commission and that he would depend on me for various issues. I took leave of the prime minister after about an hour, and his parting words to me were that I should keep sending him notes regularly so that he’d receive unvarnished feedback. I was extremely downbeat but managed to wish him all the best before leaving. A few days earlier, I had hoped to join Narasimha Rao on his maiden foreign visit to Germany as prime minister. That was not to be.

A little later, I called on the finance minister, who was visibly taken aback when I informed him of my shift to the Planning Commission. He hoped that this did not portend the prime minister’s slackening interest in economic reforms. He added that I could meet him any time and that he would continue to count on me.
Manmohan Singh can be philosophical at times, and this moment was no exception. His closing words were, ‘Life is a learning experience,’ and that I was young enough to take a setback in my stride and move on. He expressed confidence in my ability to bounce back and recalled fondly how he had recruited me personally into the Planning Commission along with
Rakesh Mohan and
Arvind Virmani, another eminent economist, in August-September 1986, overcoming the objections of the bureaucracy that people in their early thirties were being given senior positions.

After I left the PMO, I continued to have access to the prime minister and could speak to him on the phone whenever I wanted. I used to call on him now and then, and we would have general discussions on political and economic matters. During one of these conversations, he recalled his admiration for
Swami Ramanand Teerth, a firebrand Congressman who fought the last Nizam of Hyderabad aggressively for over a decade and was also a noted educationist. But never once, during these freewheeling conversations, did I muster up the courage to ask him why he had shifted me out in September 1991. Even when I spent considerable time with him on a couple of occasions, long after he had ceased to be prime minister, the topic of his moving me out never came up.

Interestingly, after he retired, A.N. Verma mentioned that he could not understand why I had been told to leave so abruptly. I asked him whether he had theories or hunches, but his response was that the matter was beyond his comprehension. He did reveal one nugget of information, though—a couple of days after I had left the PMO, the prime minister and Verma had discussed the possibility of my joining the Indian embassy in Washington as minister (economic), but as it turned out, nothing came of that, and it was just as well.

Various theories did the rounds to explain my sudden exit. One wag acerbically commented that while I had failed to get an exit policy included in the
industrial policy reforms, I had succeeded in attracting an exit policy for myself. Some said that I was too open and accessible and could not function self-effacingly; this was not entirely untrue.
⁷⁹
Still others speculated that
Chandraswami
⁸⁰
had never been happy with my presence since he had wanted his aide
Pinaki Misra in the PMO and I had beaten him to it. A few were convinced that I was too close to a number of Congress leaders and that the prime minister resented this proximity. In fact,
Farooq Abdullah, the erstwhile chief minister of Jammu and Kashmir, in a lunch hosted by the industrialist
R.P. Goenka, went to the extent of loudly saying, ‘PV will not stomach anyone who he thinks were Rajiv’s boys.’ But knowing the ebullient Kashmiri leader, I did not believe that charge one bit.

Upon leaving the PMO, I worked very closely with
Pranab Mukherjee in the Planning Commission and he involved me with the various activities of the Congress particularly. On 19 September 1991, at the first meeting of the new Planning Commission, the prime minister took the deputy chairman and me aside during the lunch break and told Pranab Mukherjee, ‘I hope you are keeping Jairam more than busy!’

The prime minister also gave me some special assignments. In early 1993,
Rajesh Pilot, with Rao’s approval, requested me to assist him in his new post as minister of state for internal security and focus on the
economic development of Jammu and Kashmir. I travelled extensively across the state with
Wajahat Habibullah and subsequently, in collaboration with
Haseeb Drabu, now the finance minister of the state, launched a number of new initiatives during my ministerial career between 2006 and 2013. But this is another story altogether.

In the meantime, Rao’s political secretary asked me to help draft the resolutions for the March 1993 session of the All India Congress Committee (AICC) in Surajkund, Haryana, and the June 1994 session in New Delhi. When the
Dunkel Draft
⁸¹
became a serious political issue in late-1993—creating in the process a strange alliance of Murli Manohar Joshi (
BJP),
Ashok Mitra (CPM) and
George Fernandes (Janata Dal)—the prime minister told me to prepare a detailed briefing document in easy-to-understand language for party workers. I did so and he liked my effort. Even so, the first year was a difficult period of adjustment, as it took some time to put the events of 2 September behind me.

The last time I had a substantive conversation with Narasimha Rao was at the
Congress’ plenary session in Bangalore (now Bengaluru) in March 2001. Earlier, Rao had called me after a column of mine had appeared in
India Today
on 16 October 2000, titled ‘Rao Doesn’t Deserve This’, in which I had expressed anguish at his travails in relation to various court cases in which he was embroiled. He had expressed happiness that I had written in his support at a time when he was battered from all sides.

At the Congress’ plenary session,
Sonia Gandhi had given Rao a prominent place on the dais alongside her. Rao saw me after a while and asked me to accompany him to a quiet place. He then proceeded to vehemently criticize the
Vajpayee government’s policy on the privatization of public sector companies, and especially the news that Air India would be sold off, as would other companies in the aluminium and telecommunications sector. He told me that this was never part of the reforms agenda of his government
⁸²
—a matter, he added, that I would doubtless be aware of since I had been with him at the very beginning. That Rao would remember my small role was gratifying and helped assuage the wound that I was carrying even after a decade. Rao kept returning to the ‘middle path’ approach he had advocated as prime minister and said that it merely was an extension of Nehru’s model of a ‘mixed economy’. I asked him why he hadn’t written a book on the reforms period but he said he was tired and that it was up to youngsters like me to do so. That I was forty-seven and could still be called a youngster amused me no end.