To the Brink and Back: India’s 1991 Story (21 page)

Much was to happen after the reforms blitz of July 1991.
Manmohan Singh presented four more regular budgets, each hugely significant in their own way but none to match the sheer courage and boldness of the 24 July 1991 one. The economy did poorly in 1991-92 but that was expected. The finance minister had warned the country that the turnaround would take at least two years and indeed, it did. Growth momentum and investor confidence returned gradually, and from 1993-94 onwards, the economy was on a roll. When they left office in May 1996, the Rao-Singh duo had left behind foreign exchange reserves equal to five months of imports and three consecutive years of +7 per cent rate of GDP growth—something that had never happened before.

Success made new believers of old sceptics. What had started out as a matter of compulsion soon became a matter of conviction, and nothing epitomized this metamorphosis better than the attitude of the prime minister himself. He became increasingly assertive and started taking full credit for the emergence of a new India. I did not begrudge him that one bit, but felt the pre-1991 roots of the post-1991 successes were not being given adequate credit. I wrote about this in 1994 in
Business Standard
, only to invite rebuke from the establishment and from some neo-converts.

One issue on which I publicly differed with Rao and his administration was the
Enron power project. Indeed, he was quite irked when
L.K. Advani issued a press statement in early 1995 quoting my opposition to that power project and voicing his party’s criticism as well. When the Shiv Sena-BJP government came to power in Maharashtra in early-1995, it cancelled the contract, but after a while took the project forward. In May 1996, the thirteen-day
Vajpayee government gave the project its stamp of approval—offering a ‘sovereign’ counter-guarantee—just as the vote of confidence was being debated in the Lok Sabha.

⁷⁹
R.D. Pradhan writes of my exit in
My Years with Rajiv and Sonia
(New Delhi: Hay House India, 2014). He says: ‘With his journalistic attitude he [Jairam Ramesh] could not work in anonymity, so essential for working in the PMO.’

⁸⁰
Chandraswami, a controversial Indian godman, was believed to have been Narasimha Rao’s spiritual adviser.

⁸¹
The Dunkel Draft was prepared by Arthur Dunkel, then director general of GATT (General Agreement on Tariffs and Trade), for further trade liberalization; this was to later form the basis of the World Trade Organisation (WTO).

⁸²
It was only in June 2015, thanks to Narasimha Rao’s son, P.V. Prabhakar Rao, that I was able to see a paper written by Narasimha Rao himself titled ‘Liberalisation and the Public Sector’. Apparently, he had prepared it for the AICC plenary session in March 2001. But he had not spoken at the plenary and so the paper was not circulated, although the economic resolution adopted reaffirmed the Congress’ commitment to the public sector as a key differentiator from the BJP. The Narasimha Rao paper finds echoes in the conversation I had with him on the sidelines. Because it gives great insights into his thinking, and because of its contemporary relevance as well, I have included it in this book (Annexure 9).

o, at the end of it all, what do I make of Narasimha Rao? There is no need to revile him—as indeed he has been—or render him with a halo—as is being done to fight today’s political battles. What is important is an objective assessment, a frank appraisal, something that the Chinese do but we seem to be incapable of. After all, Mao was officially declared 70 per cent right, 30 per cent wrong. And Mao himself had said that ‘we consider that out of Stalin’s ten fingers, only three were bad.’

There is no doubt that Rao was navigating India through a most troubled period, and that he had inherited a number of encumbrances. He was not in the best of health. He headed a minority government—a government that won a vote of confidence because many parties had walked out. Rao came to power against the backdrop of the brutal assassination of a young leader of immense charm and charisma, a man of great energy and exuberance—all qualities that he himself lacked in abundance. Even while the party he headed was in a state of shock, he had to stave off a leadership challenge from one of his colleagues, who he went on to accommodate in his cabinet as defence minister.
⁸³

At the same time, Rao was buffeted by all sorts of problems. A senior oil industry executive had been abducted in the Kashmir Valley—which was in ferment—and was kept in captivity for fifty-five days.
⁸⁴
Punjab was in a state of tumult.
⁸⁵
The abrasive chief election commissioner was giving the government a hard time.
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Rao’s party’s government in Karnataka, a traditional bastion, was tottering. Another ally ruling in Tamil Nadu had started giving him huge headaches by her theatrical actions on the Cauvery river waters issue.
⁸⁷
The principal opposition party had resumed its shrill campaign for building a Ram Mandir in Ayodhya.
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To make matters worse, Rao was under immense pressure to implement the hundred-day agenda mentioned in the party’s manifesto, even while the economy was in the doldrums—gold continued being hypothecated to the Bank of England; foreign exchange remained at dangerously low levels; and inflation was running at over 16 per cent. As though this weren’t bad enough, Rao had appointed somebody from outside the world of mainstream politics as his
finance minister.

Without doubt, Narasimha Rao confronted huge challenges. Yet, in the very brief period I saw him at the closest of quarters, I have to say that he was simply magnificent. A lifetime of circumspection gave way to courage. From the outset, Rao proved everybody wrong. A man who famously remarked, ‘Even not taking a decision is a decision,’ was remarkably decisive in the initial months. Indeed, one of Narasimha Rao’s closest aides, who worked with him when he was union minister and prime minister, but who prefers to be anonymous, says: ‘I don’t believe he [Rao] was indecisive; he was deferential to authority or to positions where the ultimate responsibility for decisions lay, but where he was assured that the position was his to hold, he was quick to decide. He crafted the
National Policy on Education in May 1986 within eight months of taking charge of that [human resource development] ministry, and directed its modification, as prime minister, six years later.’ The aide went on to say, ‘I think he [Rao] was confident that the public postures of pressure to which he appeared subject would never, at that point in time, translate into actions that would threaten his government or indeed—and this was crucial and borne out in his private conversations with those who pressured—thwart the essential pace of reform.’

Would anybody else in his place have done differently in the initial months? It’s hard to tell, but undoubtedly, Rao brought some unique characteristics. For one, by surprising everyone and ensuring that quick decisions were taken, by being exceedingly crafty as well as bold, he propelled change; critics could carp about the state of things, but they, too, knew in their heart of hearts that what he was doing was inevitable. Rao did not have the image of being pro-business and pro-industry, but to be fair, that could be because he had never served in an economic ministry earlier. This further meant that if he was championing liberalization, there may well have been something of value in it for the nation. Moreover, Rao had been around in Parliament for over a decade and hence, his voice did command respect. His reputation was that of a scholar who had been given a lot of importance by
Indira Gandhi and
Rajiv Gandhi and hence, when he spoke, he was heard intently, even if, more often than not, what he said appeared metaphysical and complicated.

For the most part, Rao was the author of whatever he spoke and wrote; he may have received inputs from here and there, but like Nehru before him, he was an original and crafted his own speeches. Reading them now after a gap of so many years is truly an education. His interventions in Parliament were also mostly extempore with, of course, notes and points prepared by his aides, which mostly remained in the folder in front of him.

Undoubtedly, Narasimha Rao, self-effacing at one level, was a man acutely conscious of his own capabilities, without ever projecting a machismo of any kind. He could certainly not be accused of
Narendra Modi’s style of arrogance; rather, in him, one could see a strong sense of self-awareness. His was not the in-your-face conceit of his current successor but the self-pride of an intellectually superior person—of one who knows that he knows. This is evident in what he himself said of his succession, in a fascinating unpublished forty-six-page self-portrait he left behind titled
Two Crucial Years: India under Shri
P.V. Narasimha Rao’s Stewardship
:
⁸⁹

Two years ago, when the young and dynamic Shri
Rajiv Gandhi was martyred in the cause of the nation’s unity and integrity, veteran freedom fighter Shri P.V. Narasimha Rao was called upon to make up his unfinished task. At that time the country was half-way through a mid-term parliamentary election. Nearly half the constituencies had already gone to polls, and Rajiv Gandhi was on the last leg of his cross-country campaign, when he was felled by a “human bomb”. On May 29, 1991, the Congress Working Committee asked the scholarly Narasimha Rao to lead the party at the hustings in the remaining constituencies. The Congress once again emerged as the largest single party in the country; although it was still short of a majority, it had allies and supporters. The Congress Parliamentary Party elected Shri Narasimha Rao as its leader and accepted the President’s invitation to form the government. With a long administrative experience he had served in almost all key ministries at the centre, except finance, and had been a close associate of both Shrimati
Indira Gandhi and Shri Rajiv Gandhi, both in office and opposition. Another reason why he was regarded as a natural successor to Indiraji and Rajivji was that he was not only acquainted with their thinking but had also been involved in the formation of their new ideas on how to carry the country to a new stage in its development.

When Indiraji returned to power in 1980, she had to devote herself to the difficult task of pulling the country out of the morass in which the 1977-79 Janata interregnum had landed it, and return it to the path of national advance which it had taken under the leadership of Mahatma Gandhi and Jawaharlal Nehru and which had been endorsed by the nation in successive general elections. But she had also come to realise from her long experience at the helm of the nation that having reached the stage and level of development already, the country needed fresh thinking and innovative practice. That is where
Narasimha Raoji’s sagacious advice proved useful and she did initiate some new ideas and measures. The young Rajivji pursued these ideas and practices with youthful boldness and greater vigour, and elaborated his thinking in terms of concrete time-bound measures in the election manifesto for the 1991 mid-term poll.
Narasimha Raoji has helped him in drawing up the manifesto and has come to realise in the period since the Congress went out of office, the economic situation in the country has so deteriorated that immediate remedial measures were needed.

The national finances were in a particularly bad shape. Narasimha Raoji felt that he needed an expert to handle it. That is why, even before the cabinet was sworn in, he invited
Manmohan Singh, one of the country’s foremost economists with a long experience at home and in international organisations to take charge of the economy and immediately begin formulating measures to reverse its decline. Naturally, the new policy had to update the basic approach to national development written into the second and third five year plan documents by Jawaharlal Nehru and carry forward the new thinking initiated by Indiraji and pursued by
Rajivji. But the
BJP, which has emerged as the main opposition party, mistook the innovative measures suggested by Manmohan Singhji as abandonment of the Nehruvian approach. Partly taken in by the BJP propaganda, but largely because of their inability to free themselves from the hold of their dogmas, which in any case had proved mistaken, the Left Front parties also were critical of the new economic measures. They, however, had no alternatives to suggest. If the BJP hailed the measures for toning up the economy for wrong reasons, the Left Front’s criticism lacked rationality. Now, of course, the BJP too has become critical of the economic policy, and is talking in terms of certain old concepts whose definitions have to be changed with the changing times […]