In his new book, Sanjaya Baru makes the convincing argument that Narasimha Rao’s reforms made 1991 as momentous a year as 1947 for India’s political history.
P.V. Narasimha Rao’s is, by any standards, an extraordinary story. A loyal, time-serving Congressman of no great distinction, he rose through the ranks in the Indira Gandhi-era, almost without a trace. He was at Gandhi’s side when she returned to power in 1980 and though he occupied many important posts (including home minister) during her tenure in government, he was rarely regarded as worthy of much media – or political, for that matter – attention.
Such was his aura of invisibility that when the Delhi police failed to protect Sikhs during the pogrom of 1984, nobody blamed Rao who was home minister at the time. Poor fellow, they all said, no one listens to him! It is people like Arun Nehru who really call the shots.
Rao’s time in Rajiv Gandhi’s government was similarly low-profile. In all the issues that dominated that era – Babri Masjid, Bofors, the battle with Zail Singh, the start of the reforms process, Operation Brasstacks and so on – Rao had minimal involvement.
Small wonder then that by the end of the Rajiv era, Rao was widely regarded as washed-up. He had health problems, was said to be out-of-sync with the leadership of the Congress and seemed unlikely to ever hold high office again. Rao withdrew from electoral politics and made plans to retire to his native Andhra Pradesh, just one more forgotten politician in an age when a new generation had come to the fore.
Lives can change in a matter of minutes. Certainly, Rao’s did.
When a suicide bomber killed Rajiv in 1991 while he was campaigning in Tamil Nadu, a panic-stricken Congress Working Committee asked Sonia Gandhi – who, at that stage, had no interest in politics – to take his place. Sonia turned them down and the Congress grandees searched for an alternative. Rao, who seemed old and tired was the safest choice: he would be no threat to anyone. It was on this I-am-so-feeble-and-harmless platform that Rao was able to enlist the support of the party leadership to fight off a challenge from Sharad Pawar – who Sonia disliked anyway because she had been told he was a crook – and become prime minister.
In 1991: How P.V. Narasimha Rao Made History, his new book on the liberalisation process, Sanjaya Baru tells the story of what happened next. India was bankrupt when Rao moved into 5, Race Course Road (RCR) and soon after annexed yet another bungalow at 3, RCR for his personal use in addition to the existing PM House complex of 5 and 7 RCR. There was no money to pay for essential imports and things looked bleak.
Dismantling the license-raj
The IMF would bail India out. But it had its conditions. These included the liberalisation of the license-permit-quota raj that, most people agreed, had done little to help the poor while actually enriching a cosy cartel of industrialists, oligarchs, politicians and bureaucrats.
The problem was that while most politicians agreed, in private, that it was time to reform the system, none of them were willing to do much more than tinker with the permit raj. Rao, of all people, was the one politician who took the plunge. He permanently dismantled the license-permit-quota system and had the courage to make the deep structural changes that the Indian economy needed.
In 1991: How P.V. Narasimha Rao Made History, Baru tells the tale of how Rao pulled this off. And it is a remarkable story: a seemingly feeble old man with no political base of his own, heading a minority government that depended on the Left for its survival, pulled off the most comprehensive reform of India’s economic system since Independence.
And Baru tells the story well. At times the book feels like a thriller and it is a compulsive page-turner. Because Baru is also a serious economist, in addition to being a veteran journalist, he never over-simplifies the issues at stake and his research is meticulous. It helps also that he is what some would now call a Lutyens insider, who had nearly unparalleled access to the Prime Minister’s Office (PMO) under Rao and also family connections with some of the key players of the time. Plus, Rao’s closest aide at the time, his private secretary Ramu Damodaran, seems to have collaborated closely with Baru, offering up a wealth of detail.
Baru’s thesis is that the story does not end with the 1991 reforms; in fact, they were the beginning of far-reaching changes in Indian society.
He argues, convincingly, that without Rao’s 1991 liberalisation, India would never have become the potential economic superpower it is today. He points out that the reforms transformed Indian industry. From 1947 to 1991, the same bania (caste of traders and merchants) names appeared again and again in any list of the top business houses. But 1991 changed all that. It ended the cosy cartel of India’s richest businessmen and it allowed new entrepreneurs to emerge and flourish.
The south, he points out, was of little consequence industrially till 1991. But the reforms enabled the software boom and the growth of Bangalore and Hyderabad (and now Chennai) as centres of information technology. Without 1991, we would have no Nandan Nilekani or Narayan Murthy and no GVK or GMR.
But would we have had no Narendra Modi?
Rao’s social agenda
Baru’s book deals only with 1991, so he is able to side-step the hot potato of Rao’s social agenda but in an interview with me for Virtuosity, my show on CNN News 18 (soon to be telecast), Baru confronted that charge.
Within the Congress, there is a widespread consensus that the party’s decline in north India began with the demolition of the Babri Masjid on Rao’s watch. (Baru dates the decline to 1989 when Rajiv lost power.)
L.K. Advani went on his first rath yatra in the late 1980s and pushed the divisive, hate-driven agenda that saw the BJP’s support swell in the Hindi belt.
By the time Rao took office, the BJP was officially the party of the Ram temple and India’s Muslims who had traditionally counted on the Congress to protect them now felt insecure. Rao shunned the aggressive secularism of Indira and Rajiv (perhaps out of fear of alienating moderate Hindus) but he did little to reassure Muslims. When kar sevaks demolished the Babri Masjid, Muslims treated this as the ultimate betrayal and deserted the Congress in droves. By the time the party tried to win them back a few years later, the Muslims had found more assertive champions in the shape of Mulayam, Laloo and others.
Rao’s critics argue that his abandonment of old-style Congress secularism created a climate where it was okay to diss Muslims (“all fanatics” et cetera) and to say, in polite company, the sort of communal things that would once have been regarded as completely unacceptable.
It is significant that for all his economic achievements, Rao’s Congress lost votes from both Hindus and Muslims. The Hindus were increasingly drawn to the BJP, which emerged as the single largest party in the 1996 election as the Congress slumped to defeat.
Could one argue that Rao’s children – Indians who grew up in the post-reforms era – came of age in a country that had a liberal economy but an illiberal mindset? That Narendra Modi was the logical consequence of the death of the liberal-secular Congress tradition that had dominated discourse till then?
It is an old argument. And in his interview with me, Baru sidestepped it by arguing that a) there is no such thing as a Muslim block vote and b) that on Ayodhya, Rao’s own book on the subject explains the prime minister’s role clearly enough to exonerate him.
An air of sleaze
More difficult to contest is that an air of sleaze surrounded Rao in his later years at RCR. Chandraswami would fix appointments for businessmen who wanted to meet the PM and perform havans at 5 RCR. An astrologer called N.K. Sharma became so close to Rao that ministers would sit at his feet. Harshad Mehta claimed that he had personally handed over a suitcase containing a crore in cash to Rao at 7 RCR. Rao’s aides went out and bought MPs to win a no confidence motion.
The hawala case was seen by Advani and many of the others charge-sheeted in the matter (which was later thrown out by the courts) as Rao’s attempt to fix his rivals and opponents. The Tamil Nadu Congress unit walked out and created the Tamil Maanila Congress after Rao went behind its back to ally with Jayalalithaa. (Predictably, Jayalalithaa told me, a few months later, that Rao had reached out to her through his astrologer.)
By the end, Rao cut a sorry figure. No party would have anything to do with him. The Congress shunned him. He fought a jail sentence in a corruption case. And his pal Chandraswami did actually go to jail.
I asked Baru during our interview whether he thought the sleaziness of Rao’s last years would cloud his legacy. He got a little agitated arguing that there was no evidence that Rao profited personally from corruption (Mehta’s money; the buying of MP’s et cetera were all party activities) and that there was a deliberate campaign to besmirch Rao’s reputation.
Perhaps he is right, though I’m not sure I agree. Although he is correct on the larger issue. No prime minister after Jawaharlal Nehru has had such a profound and lasting impact on India. Baru says that 1991 deserves to be remembered alongside 1947 as the most significant year in our recent political history.
Whether you agree with him or not, his book is worth reading. It is the story of an extraordinary time and of an ordinary man who, when he was caught up in those times, showed us how extraordinary he really was.