A person should not be too honest,
— Chanakya also known as Kautilya, 320 bce
straight trees are cut first;
never share your secrets with anybody;
A man is great by deeds not by birth
In Hindu belief, Narasimha is one of the divine avatars of Vishnu who assumed the form of part-man and part-lion to destroy evil and restore dharma. Two well-documented biographies of PV Narasimha Rao have been published in recent years.
Rao was a member of the Andhra legislative assembly from 1956 onwards and a minister in the Andhra Pradesh (AP) government for nine years by the time he became the chief minister in september 1971. Rao was selected for the post of AP CM by Indira Gandhi because of his deference to her and his years of experience in state-level politics. One of Rao’s major initiatives after becoming CM was land reforms. This became an important objective for him, and legislation was enacted to limit landownership which inevitably angered large landowners.
The average Andhra voter too turned against Rao for accepting a Supreme Court judgment which provided for reservations in government jobs for people from the Telangana region of Andhra Pradesh. Consequently, support for Rao within the AP Congress eroded, and Indira Gandhi asked him to step down from the position of CM in January 1973. President’s rule was imposed thereafter, and this happened even though the Congress party had an absolute majority in the state legislature.
Clearly, IG viewed land reforms as secondary to retaining the support of the politically influential large landowners. She also probably did not want Rao to develop too large a following among the landless in AP.
In keeping with his prudent nature, Rao hid his disappointment and stayed out of Andhra politics, doing his reading and visiting his daughter in the us for the next few years. Rao never returned to state-level politics post-1973, although he was a veteran of state government administrations. Another Congress leader, Vengala Rao, was appointed CM by IG.
In October 1974, in a signal that he was being rehabilitated, Rao was appointed a general secretary in the Congress party. However, Rao was not part of IG’s inner circle. Like the average Indian, he too learnt about the Emergency on the morning of 26 June 1975 from an announcement on All India Radio.
Unlike in the north, the Congress party did extremely well in Andhra Pradesh, even in the post-Emergency general elections of 1977, and Rao was elected from Hanamkonda in Andhra Pradesh. Rao won again from this constituency in the midterm general elections in 1980. Rao was quietly and consistently loyal to IG in her wilderness years between 1977 and 1980. For this, and for keeping quiet after losing his CM position in 1973, he was appointed foreign minister after she came back as PM in 1980.
Despite Rao’s win in 1989, he was disappointed with his low profile within the Congress. He packed up his belongings and was all set to leave Delhi when Rajiv Gandhi was assassinated on 21 May 1991. Despite the consequent wave of sympathy, Congress fell well short of an absolute majority, winning 226 out of 545 Lok Sabha seats in the 1991 general election.
Meanwhile, the BJP increased its share of seats from two in 1984 to 85 in 1989 and to 120 in 1991. The Janata Dal’s seats fell sharply from 143 in 1989 to 69 in 1991. The changes in the political fortunes of the various parties in the 1991 general elections provides a sense of the uncertain environment which prevailed prior to formation of the Central government in mid-1991.
Although there were other contenders in the Congress party such as Arjun Singh for the post of PM, a set of fortuitous circumstances led to their elimination. Rumour has it that it was on PN Haksar’s advice that Rao was chosen. He was sworn in on 21 June 1991 to become India’s first “accidental prime minister”. Rao was acutely aware that he was a compromise candidate and that many in the Congress party were waiting for an opportunity to unseat him. For instance, Arjun Singh left in protest after the demolition of the Babri Masjid.
Rao looked for an economist of standing to take charge of the Ministry of Finance, and he first requested IG Patel who declined for personal reasons. This position was then offered to Manmohan singh. Rao understood that the country needed an economist with experience in government as the finance minister.
At the same time, Rao appointed seasoned civil servants Amarnath Verma and Naresh Chandra as principal secretary to the PM and cabinet secretary respectively. He gave them the required authority within government to push through decisions taken on economic reforms. The various ministries of the Central government tend to work in silos. Hence this delegation of authority to proven administrators was a shrewd move on Rao’s part.
In another calculated move, Rao rehabilitated Pranab Mukherjee who was in political wilderness during the Rajiv Gandhi years. Rao appointed Mukherjee as the deputy chairman of the Planning Commission (June 1991 to May 1996). The Gadgil formula was revised by the National Development Council (NDC) after Mukherjee took over. The revised construct for assistance to states stood the test of time and was used till 2014–15.
Rao gave political cover to Manmohan Singh and his team while they implemented reforms which hurt established private-sector interests and went against the grain of the political left. For instance, when Manmohan Singh offered to resign following the Harshad Mehta stock market scam, Rao did not accept his resignation. Rao was aware that for economic reforms to gain ground, he needed continuity in crucial positions.
The principal message in Rao’s first Independence Day speech on 15 August 1991, less than two months after taking over as PM, was that the “country had been brought back from the brink of economic disaster”. Despite his expertise in the area of foreign policy, for the most part Rao stayed away from this topic in his speech.
His strategy on the Kashmir and Ram Mandir–Babri Masjid fronts was to address these issues quietly and through procrastination. In the first two years of his government, Rao stayed away from controversial issues to fight the battles on the economic front where he faced entrenched interests. With his experience of the aborted land reforms in Andhra Pradesh, Rao did not want economic reforms to be sidetracked by outcries that foreign companies were being favoured over domestic Indian industry.
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The economic reforms were essentially about reducing discretionary decision making by government, and some progress was made towards this goal. All PMs after Narasimha Rao have continued to reduce controls and the direction, although halting at times, has been towards further economic liberalisation.
...[T]he steps taken during the years Rao was PM combined with those implemented post-1998 have pushed India’s GDP growth rate above the global average from the 1990s till 2019. Availability of televisions, phones, cars and two-wheelers has increased. Telecom too has been a hugely successful story since the late 1990s. India is now much more of a consumers’ market.
This is a substantial positive change from the pre-1990s era when products and services were rationed to applicants waiting in interminable queues for a scooter or a telephone connection. The wider and easier availability of consumer items has made the sense of deprivation higher among the poor.
By 1993 the important change for the Indian economy was that it had shifted from industrial licensing and tight controls on imports and FDI to one in which decisions which impacted domestic and foreign investments and foreign trade were more determined by market signals. Within two years of Rao taking over, India’s crisis in servicing its hard currency debt abated and the pace of reforms also slowed down in tandem.
Another factor which reduced Rao’s appetite for reforms was that state-level electoral results were negative for Rao. For instance, in the 1993 UP elections, the Congress party was marginalised by a combination of the Samajwadi Party and the Bahujan Samaj Party, and it lost in Delhi in the same year to the BJP. This reduced Rao’s writ, which was limited to begin with, within the Congress and may have contributed to his reluctance to continue with economic reforms.
Excerpted with permission from The Promise of India: How Prime Ministers Nehru to Modi Shaped The Nation (1947 - 2019), Jaimini Bhagwati, Penguin Books.