Modern day Chanakya

[RaaoSaab]

PV Narasimha Rao, Prime Minister of India from 1991 to 1996, will always be remembered as the man who took office when the country was in its worst phase of economic turmoil and led the way to recovery and transformation.

Through his keen foresight, Rao initiated a new era of liberalization. His reforms opened up the Indian economy for speedy development and growth. He was called the "modern-day Chanakya" for steering in tough economic and political reforms.

 

On the occasion of his 97th birth anniversary on June 28, let's take a look at his journey towards becoming the Father of Indian Economic Reform, a renowned politician and a prolific writer

Rao's governance

Pamulaparti Venkata Narasimha Rao services to the nation were invaluable. Under Rao’s governance, the rupee was made convertible on trade account, the idea of a nuclear test in India was first mooted and the 'Look East' policy was initiated.

Under his administration, the Licence Raj was dismantled — a major milestone in the history of Indian economics as it reversed the socialist policies of Rajiv Gandhi's government and paved the way for India to be an active participant in the wave of globalization.

With Rao's mandate, then finance minister Manmohan Singh launched  a series of pro-globalisation reforms, including International Monetary Fund (IMF) policies, to rescue the almost-bankrupt nation from economic collapse.

Political Career

Narasimha Rao joined the Indian National Congress (INC) after Independence. When the INC split in 1969, Rao stayed on the side of then Prime Minister Indira Gandhi and remained loyal to her during the Emergency period (1975 - 77).

His years as Prime Minister were eventful for Indian history. The period saw destruction of the Babri Mosque in Ayodhya, which triggered one of the worst Hindu-Muslim riots in the country since Independence. Bharatiya Janata Party (BJP), a major right-wing party, also emerged as an alternative to Congress during his reign.

Rao is also famous for being the first Prime Minister to hail from "non-Hindi-speaking" south India. While remembering Narasimha Rao on his birth anniversary, Telangana Chief Minister K Chandrashekhar Rao on Wednesday said it was a proud moment for the state.

Rao's later life, however, was marked with political isolation due to corruption charges. It was alleged that Rao, through a representative, offered millions of rupees to members of Jharkhand Mukti Morcha (JMM), and possibly a breakaway faction of the Janata Dal, to vote for him during the no-confidence motion. Rao was acquitted of all charges prior to his death in 2004 in New Delhi. He was cremated in Hyderabad.

In the 1996 general elections, Rao's Congress was badly defeated and he had to step down as PM. He retained the leadership of the Congress party until late 1996, after which he was replaced by Sitaram Kesri.

Among other roles, Rao also played a vital part in the freedom struggle against the Nizam who ruled Hyderabad during the 1940s.

Early Life

Rao was born to a wealthy Telugu Brahmin family, headed by PV Ranga Rao and Rukminiamma, who hailed from agrarian background in a village in Warangal District, now in Telangana.

He studied at Fergusson College and at the Universities of Mumbai and Nagpur, where he obtained Bachelor's and Master's degrees in law.

Rao was a multi-faceted personality who was also a scholar and an intellectual. He could speak in nearly 17 languages and held interest in varied subjects like computer programming and literature.

[RaaoSaab]

 P.V. Narasimha Rao and Sonia Gandhi had tried to outmanoeuvre each other all through the former Prime Minister's five-year tenure.

A well-documented book based on Rao's private papers and diaries reveals that the former Prime Minister had little respect for Sonia's political abilities. He was opposed to Sonia running the party and country, says Princeton scholar Vinay Sitapati in Half Lion: How P.V. Narasimha Rao Transformed India (Penguin Random House).

Speaking to The Telegraph, Sitapati said: "The evidence suggests both Rao and Sonia are to blame for poor relations while Rao was Prime Minister: both were trying to outmanoeuvre the other. But Sonia Gandhi and her aides must take sole blame for their vindictive treatment of Rao after his resignation as Prime Minister. It is Rao's vision of India that we live in today; the Congress should own it."

In his initial years, Rao would visit Sonia - she had declined to head the Congress in May 1991 hours after Rajiv Gandhi's assassination - every week. He was also deeply sympathetic towards her and shared her concern for the safety and security of her children, Rahul and Priyanka.

Sitapati quotes a letter from Rao's archives to substantiate this. Three months after he took over as Prime Minister, Rao had written to the then US President, George H.W. Bush, raising the issue of Rahul's security. Rahul was then studying at Harvard.

"I had ventured to do so," Rao wrote, "knowing the warmth of your friendship as also the affection that Mrs Bush and you had for Mr Rajiv Gandhi and his family."

Rao, while acknowledging that the US authorities had "been most helpful in providing a certain level of security assistance to Rahul Gandhi", pointed out that "in normal circumstances these arrangements would have been deemed satisfactory".

However, Rao added, Indian security agencies believed that Sikh extremists were plotting to kill Rahul.

So, he needed to be given more security, Rao urged the US President. "The minimum, I believe, would be the availability of one trained person with him, who has also the necessary intelligence backing of various agencies, and effective means of communication."

Sitapati says this request for tighter American security for Rahul, enhanced protection for Sonia and Priyanka, regular visits to 10 Janpath and ritualistic invocations of Rajiv's legacy kept Rao's first year and a half "incident free".

The author quotes an unnamed friend of Rao's as saying that Sonia trusted the former Prime Minister enough to ask him: "People are asking me to come to politics. If I was your daughter, what would you advise?" Rao, 25 years older than Sonia, is reported to have replied: "Since you are asking as my daughter, I would say, don't come."

Occasionally, the infamous gatekeepers at 10 Janpath made Rao wait on the phone for a few minutes. Rao's dry wit would then come in handy. He told his press secretary, P.V.R.K. Prasad: "I do not mind. It is the Prime Minister who minds."

But December 6, 1992, worsened the Rao-Sonia equations. Sonia issued a terse statement, condemning the razing of the Babri Masjid. The Rao camp viewed it as her first political act. Although Sonia's statement did not blame Rao directly, he took note.

Gradually, Rao stopped visiting 10 Janpath to brief Sonia about the affairs of state. Sitapati says that by mid-1993, the then Prime Minister had begun to imagine the unimaginable: "That he could sever the engine from the train and finally rid himself - and the party - of the Nehru-Gandhis."

This had an opposite effect - it prompted Rao's detractors like Arjun Singh, M.L. Fotedar and Natwar Singh to incessantly complain to Sonia. Rao did not have a forum to present his side of the story.

He, however, did not sit idle. On one occasion, he called up Gopalkrishna Gandhi, then heading the Nehru Centre in London, and told him to serve as high commissioner to South Africa.

Gopalkrishna, the grandson of Mahatma Gandhi and C. Rajagopalachari, represented a lineage that was, perhaps, more central to the freedom struggle than the Nehru-Gandhis.

Sitapati quotes Gopalkrishna as saying: "I do not think that the political significance of that was lost on Narasimha Rao. This was the first time a member of the family with a political heritage which is very different from the Nehru-Gandhi family was being honoured."

When Gopalkrishna became Bengal governor in 2004, Rao sent loyalist R.K. Khandekar to congratulate him. Sitapati quotes Gopalkrishna as saying: "I think he (Rao) had some political ambitions for me. It is possible that he was trying to wean off the Congress from the Nehru-Gandhi family."

Around mid-1995, Rao hosted an iftar at Delhi's Hyderabad House. Sitapati claims Rao's astrologer, N.K. Sharma, walked up to Sonia and asked her: "Do you want Rao's resignation?" Sonia is said to have replied: "No, no, who asked you?" Sonia then told Sharma: "Please continue supporting Mr Narasimha Rao."

When Sharma got back to the Prime Minister, Rao did not believe him. Sitapati believes Rao was paranoid that Sonia was plotting a coup.

The author insists that Rao's private papers contain no evidence to support Subramanian Swamy's claim that Rao had collected some material on Sonia, especially her citizenship documents.

Rao called for the national elections in May 1996. He was counting a lot on Tamil Nadu, where electoral logic dictated that the Congress should tie up with the DMK, which was expected to sweep the state. But this was not to be.

Sitapati quotes Rao's son, Prabhakara Rao, as saying: "A case was being built up (by his enemies within the Congress) that Rao was trying to support the people who killed Rajiv Gandhi." Sensitive to the charge, Rao sided with the AIADMK instead of the DMK.

Sitapati quotes Rao's press secretary Prasad as saying: "He would have come back to power in 1996 but he chose to follow his principles. It cost him."

In the author's assessment, Rao kowtowed to Sonia but never altered government policy. When their relationship deteriorated, Rao discarded Rajiv's associates and contemplated sidelining Sonia but did not publicly challenge her.

"Rao had simultaneously played both lion and mouse with Sonia," remarks Sitapati.

[RaaoSaab]

In 1991, India’s economy was on the brink of collapse.

The country’s foreign debt had climbed to about $72 billion, the third highest in the world at that time, and its imports far outweighed exports. That meant that the country’s reserves of foreign currency weren’t even enough to support any more imports, especially petroleum. The situation was so grim that the Indian government had to mortgage some 20 tonnes of gold for $240 million, just to keep the economy afloat.

That same year, after being out of power for two years, the Congress party was elected back. Though a minority government—the Congress was still 40 seats short of majority—P V Narasimha Rao became prime minister.

Within weeks of coming to power, Rao and his finance minister, Manmohan Singh, announced a series of policy decisions that kickstarted the liberalisation and privatisation of the Indian economy. These reforms freed up India from many bureaucratic hurdles and red tape, providing the foundation for strong economic growth.

Since then, India’s economy has turned into Asia’s third-largest, and is today the world’s fastest-growing large one.

Amidst all this, Rao’s legacy seems to have been buried, even as the credit for the reforms was widely given to Singh (who later also became prime minister) and some of the economists in the government.

In his book, 1991—How P V Narasimha Rao made History, Sanjaya Baru, a former newspaper editor and media advisor to prime minister Singh, analyses Rao’s role during that landmark year. Earlier this week, Baru spoke to Quartz about his book. Here are edited excerpts from the interview:

How crucial was P V Narasimha Rao’s leadership in 1991?

It is the political leadership, first with Chandra Shekhar (prime minister before Rao) and then with Rao, who were able to create a political environment in which the economic crisis was dealt with.

The economists in government, be it Manmohan Singh, Montek Singh Ahluwalia, Rakesh Mohan or many others, were only facilitating policy making.

But the political leadership in a democracy is provided by the prime minister. The tragedy of the last 25 years is that the Congress party buried Rao’s legacy.

Professional economists have written of it as though the reforms were all thought of by economists and conducted by economists. But why is it that Rajiv Gandhi, who was prime minister for five years with 400 members of parliaments, failed to undertake these reforms? Because he did not have the political skills.

Where did Rao go wrong as Congress president, and why was there so much disregard for him?

He did nothing wrong.

He kept the party together and led the government for a full term. He lost the election in 1995. Rajiv lost in 1989. Rahul Gandhi lost elections in 2014, Indira Gandhi in 1977. Merely because family members lost the election, they did not get removed, while Rao was. So the Congress party decided it is the party of the Nehru-Gandhi family. And once he was out of power, Rao was sidelined.

What is the family doing in the party? The Congress is the inheritance of the Indian national freedom movement.

But did Rao not want to take credit for what he did?

He allowed Dr Manmohan Singh to get all the credit for the economic policy.

But in the realm of foreign policy, he was quite happy to take credit. The Look East policy, the recognition of Israel, beginning the talks with China, he deserves credit for all that. He did not shy away from taking credit on the foreign policy front.

But the problem is not that he did not want to take credit. The problem is that, once he was out of office, the Congress party simply buried him and his legacy.

How do you rate his foreign policy initiatives?

I would rate him next to Jawaharlal Nehru in that area. Nehru gave Indian foreign policy a direction after independence. He was the architect of foreign policy. In 1991… Rao redefined India’s foreign policy.

One by reaching out to our neighbours. He was the first prime minister to reach out to Nawaz (Sharif). He also reached out to the leadership in Bangladesh and Sri Lanka. In fact, he is the original architect of Narendra Modi’s neighbourhood policy.

Second, he reached out to east Asian nations, particularly Japan, South Korea, and Singapore and defined what is now called as the Look East policy. Third, he recognised Israel and redefined India’s relations with West Asia, particularly with Saudi Arabia and Iran.

Fourth, he began border talks with China, and laid the framework for the negotiations over the next 30 years. Fifth, he managed the transition of the Soviet Union, especially with the rise of Russia. Finally, he began a new phase with India’s engagement with the US.

How do you see the future of the Congress party and its leader, Rahul Gandhi?

It is unfair to just blame Rahul Gandhi. I think Rahul has been an uninspiring leader. The fact is that the party is in such serious trouble across the country. In large parts of the country, it doesn’t have a base. It doesn’t have cadre. It needs a leader who can unite the party, mobilise it, and inspire young people. And, obviously Rahul hasn’t been able to do that. Who can do that, one doesn’t know.

As India’s best prime ministers, how do you rate Manmohan Singh and Narasimha Rao?

There is no doubt in my mind. Next to Nehru, the greatest prime minister has been Rao. I would not have written this book if I weren’t convinced. Every prime minister makes mistakes. Nehru made big mistakes in handling Kashmir, China, and the 1962 war. Indira made mistakes, so did Rajiv. Rao also made mistakes. On an average I would rate Rao’s tenure as the most significant as it put India on a new trajectory.

Singh was certainly a good and effective prime minister in UPA-I. In UPA-II, he lost control, for the same reason as the party was divided in its loyalty between the PM and the family. One section of the party wanted Rahul to replace Singh.

[Kool_SRG]

[sattipandu]

ebbeyyyy chaanakya antey maa CBn eyyy antunna @psycopk and @Android_Halwa

[RaaoSaab]

India’s Look East Policy is an effort being made by the Indian government to cultivate and strengthen economic and strategic relations with the nations of Southeast Asia in order to solidify its standing as a regional power. This aspect of India’s foreign policy also serves to position India as a counterweight to the strategic influence of the People's Republic of China in the region. Initiated in 1991, it marked a strategic shift in India’s perspective of the world. It was developed and enacted during the government of Prime Minister P.V. Narasimha Rao and has continued to enjoy energetic support from the successive administrations of Atal Bihari Vajpayee, Manmohan Singh and Narendra Modi, each of whom represents a different political party in India.

India’s Pre-1991 Foreign Policy

 

Before the fall of the Soviet Union, India made scant efforts to foster close relationships with the governments of Southeast Asia. There are several reasons for this. First, due to its colonial history, India’s ruling elite in the post-1947 era had an overwhelmingly pro-Western orientation. Western countries also made for better trade partners as they were significantly more developed than India’s neighbors. Second, India’s physical access to Southeast Asia was barred by Myanmar’s isolationist policies as well as Bangladesh’s refusal to provide transit facilities through its territory.

 

Third, India and the Southeast Asian countries were on opposing sides of the Cold War divide. 

 

India’s lack of interest in and access to Southeast Asia between its independence and the fall of the Soviet Union left much of Southeast Asia open to China’s influence. This came first in the form of China’s territorial expansionist policies. Following Deng Xiaoping’s ascent to leadership in China in 1979, China replaced its policy of expansionism with campaigns to foster extensive trade and economic relations with other Asian nations. During this period, China became the closest partner and supporter of the military junta of Burma, which had been ostracized from the international community following the violent suppression of pro-democracy activities in 1988.

 

[RaaoSaab]

 

Unsung hero of the India story 

 2011.Jun.26 Swaminathan S. Anklesaria Aiyar 30 Comments

Twenty years ago, Narasimha Rao became Prime Minister and initiated economic reforms that transformed India. The Congress party doesn’t want to remember him: it is based entirely on loyalty to the Gandhi family, and Rao was not a family member. But the nation should remember Rao as the man who changed India, and the world too.

In June 1991, India was seen globally as a bottomless pit for foreign aid. It had exhausted an IMF loan taken six months earlier and so was desperate. Nobody imagined that, 20 years later, India would be called an emerging superpower, backed by the US to join the UN Security Council, and poised to overtake China as the world’s fastest growing economy.

For three decades after Independence, India followed inward looking socialist policies aiming at public sector dominance. The licence-permit raj mandated government clearance to produce, import or innovate. If you were productive enough to create something new or produce more from existing machinery, you faced imprisonment for the dreadful crime of exceeding licensed capacity.

Socialism reached its zenith in the garibi hatao phase of Indira Gandhi (1969-77), when several industries were nationalized and income tax went up to 97.75%. This produced neither fast growth nor social justice. GDP growth remained stuck at 3.5% per year, half the rate in Japan and the Asian tigers. India’s social indicators were dismal, often worse than in Africa. Poverty did not fall at all despite three decades of independence.

In the 1980s, creeping economic liberalization plus a government-spending spree saw GDP growth rise to 5.5%. But the spending spree was based on unsustainable foreign borrowing, and ended in tears in 1991.

When Rao assumed office, the once-admired Soviet model was collapsing. Meanwhile, Deng had transformed China through market-oriented reforms. Rao opted for market reforms too. He was no free market ideologue like Ronald Reagan or Margaret Thatcher: he talked of the middle path. His model was Willy Brandt of Germany.

His master stroke was to appoint Manmohan Singh as finance minister. Rao wanted a non-political reformer at the centre of decision-making, who could be backed or dumped as required. He presented Singh as the spearhead of reform while he himself advocated a middle path. Yet, ultimately, it was his vision that Singh executed.

In his first month in office, the rupee was devalued. There followed the virtual abolition of industrial licensing and MRTP clearance. At one stroke, the biggest hurdles to industrial expansion disappeared. Who was the industry minister who initiated these revolutionary reforms? Narasimha Rao himself! He held the industry portfolio too.

Yet he did not want draw attention to himself. So he ingeniously made the delicensing announcement on the morning of the day Manmohan Singh was presenting his first Budget. The media clubbed the Budget and delicensing stories together as one composite reform story. In the public mind, Manmohan Singh was seen as the liberalizer, while Rao stayed in the background.

Singh initiated the gradual reduction of import duties, income tax and corporate tax. Foreign investment was gradually liberalized. Imports of technology were freed. Yet the overall government approach was anything but radically reformist. When bank staff threatened to go on strike, Rao assured them that there would be no bank privatization or staff reforms. When farmers threatened to take to the streets, Rao assured them there would be no opening up of Indian agriculture.

The IMF and World Bank believed that when a country went bust, that was the best time for painful reforms like labour reforms. However, Rao took the very opposite line. He focused on reforms that would produce the least mass losers (such as industrial delicensing) and yet produced 7.5% growth in the mid-1990s. These gave reforms a good name, and ensured their continuance even when Opposition parties later came to power.

In the 2000s, the cumulative effect of gradual reform finally made India an 8.5% miracle growth economy. Rao got no glory for this. He had lost the 1996 election amidst charges of buying the support of JMM legislators. This led to his exit as Congress chief. Although he was eventually exonerated by the courts, he died a political nobody.

How unjust! He deserves a high place in economic history for challenging the Bank-IMF approach on painful austerity, and focusing instead on a few key changes that produced fast growth with minimum pain. The World Bank itself later changed its policy and started targeting “binding constraints” (like industrial licensing).

Manmohan Singh said repeatedly that he could have achieved nothing without Rao’s backing. Today, 20 years after the start of India’s economic miracle, let us toast India’s most underrated Prime Minister — Narasimha Rao

[AryaD]

Asalau sisalina telugu tejam ante mana Rao gaare. Kaani ethics konchem kuda leni oka vedhavani telugu pride ga maarchesaru.

[sattipandu]

1 minute ago, AryaD said:

Asalau sisalina telugu tejam ante mana Rao gaare. Kaani ethics konchem kuda leni oka vedhavani telugu pride ga maarchesaru.

are you referring to Sr NTR??  @psycopk

[Android_Halwa]

16 minutes ago, sattipandu said:

ebbeyyyy chaanakya antey maa CBn eyyy antunna @psycopk and @Android_Halwa

ae vuko sattena....meda mida jambia pettina kuda ie maata sachina ananu...

 

[Android_Halwa]

8 minutes ago, sattipandu said:

are you referring to Sr NTR??  @psycopk

Yeah, manufactured and porpagated asalu sisalaina telugu tejam...

We all now know the legacy of telugu tejams since 1983...

[Roopkumar]

Chanakya Ani we Picchi p kula kukka CBN ni mudduga yellow 🐕s pilusukuntar gaa😂😂😂😂

[RaaoSaab]

crisis ante adi 1991 lo...desham nijamina klista paristutullo unde with 71 billion dollar debt.....dannundi eroju ila unnam ante only becoz of PV rao and MMS a bit

Chanakya ante vachina position tho peru sampainchadam, avathali valla position lakkoni and part ni lakkoni media lo dappukotam kadu @Android_Halwa @psycopk

[RaaoSaab]

Bringing an end to the insurgency in Punjab

Little is known about Rao’s significant contribution towards bringing an end to militancy in Punjab, which by 1991 had killed 50,000 people. Despite the grave threat posed by Khalistani militancy, Rao was determined to hold elections in Punjab the following year. Militants had issued a boycott of the polls. Various political parties, especially the Akalis, were running scared, and many of Rao’s advisors had warned him against the move of holding elections at such a restive time.

“When I voiced my misgivings to the then cabinet secretary, he told me that the decision had been taken solely by the PM, who was determined to bring back an elected government in Punjab no matter how narrow the electorate base. Only this, he believed, could isolate the militants from the majority of the Sikh population. Rao’s insight proved prophetic,” writes noted political journalist Prem Shankar Jha, in a 2005 tribute to him for Outlook magazine

The elections brought a Congress government under Chief Minister Beant Singh into power. Under his leadership, police chief KPS Gill undertook a series of operations which would break the back of Sikh militancy. Beant also played his part by mobilising the Jat Sikh community against the militants and within a year the militancy in Punjab had fallen apart.

[RaaoSaab]

When Pamulaparti Venkata Narasimha Rao was born, a Sufi pir came up to his father’s door and said, “Your son will be a badshah.” Vinay Sitapati mentions this possibly apocryphal story in his new biography of Narasimha Rao, Half Lion. Yet, in the beginning of 1991, Rao could not bank on any such premonition.

Rajiv Gandhi denied him a ticket for the general elections in May. The 69-year-old Rao knew this was an unceremonious send-off into the political wilderness. He noted in his diary, w .. 
 

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