P. V. Narasimha Rao

Pamulaparti Venkata "Narasimha Rao" (Telugu: పాములపర్తి వెంకట నరసింహారావు; 28 June 1921 – 23 December 2004) was the ninth Prime Minister of India (1991–1996).^[1] He led an important administration, overseeing a major economic transformation and several home incidents affecting national security of India.^[2] Rao accelerated the dismantling of the Licence Raj. He is often referred to as the "Father of Indian Economic Reforms".^[3] He is best remembered for employing Dr. Manmohan Singh as his Finance Minister. Dr. Manmohan Singh launched India's free market reforms that rescued the almost bankrupt nation from economic collapse.^[4] Rao was also referred to as Chanakya for his ability to steer tough economic and political legislation through the parliament at a time when he headed a minority government.^[5][6]

Rao's term as Prime Minister was an eventful one in India's history. Besides marking a paradigm shift from the industrializing, mixed economic model of Jawaharlal Nehru to a market driven one, his years as Prime Minister also saw the emergence of the Bharatiya Janata Party (BJP), a major right-wing party, as an alternative to the Indian National Congress which had been governing India for most of its post-independence history. Rao's term also saw the destruction of the Babri Mosque in Ayodhya which triggered one of the worst Hindu-Muslim riots in the country since its independence.^[7] Rao died in 2004 of a heart attack in New Delhi. He was cremated in Hyderabad.^[8]

Early life

P.V. Narasimha Rao had "humble social origins".^[5] He was born at Laknepally village -Near Narsampet in Warangal District to a Niyogi Telugu Brahmin family. At the age of 3 years he was adopted and brought up to Vangara village in the present-day Karimnagar district of Andhra Pradesh (then part of Hyderabad capital city of the state of Andhra Pradesh).^[5][9] His father P. Ranga Rao and mother Rukminiamma hailed from agrarian families.^[5]

Narasimha Rao was popularly known as PV. He studied Bachelor's in the Arts college at the Osmania University and later on went to Fergusson College now under University of Pune where he completed a Master's degree in law^[10] His mother tongue was Telugu and had an excellent grasp on Marathi. In addition to eight Indian languages (Telugu, Hindi, Urdu, Oriya, Marathi, Bengali, Gujarati, Tamil), he spoke English, French, Arabic, Spanish, German, Greek, Latin and Persian.^[11] Along with his distant cousin Pamulaparthi Sadasiva Rao, Ch. Raja Narendra and Devulapalli Damodar Rao, PV edited a Telugu weekly magazine called Kakatiya Patrika in the 1940s.^[12] PV and Sadasiva Rao used to contribute articles under the pen-name Jaya-Vijaya.^[12][13]

Narasimha Rao has three sons and five daughters. His eldest son P.V. Rangarao was an education minister in Kotla Vijaya Bhaskar Reddy cabinet and MLA from HanmaKonda Assembly Constituency for two terms. His second son P.V. Rajeshwar Rao was a Member of Parliament of the 11th Lok Sabha (15 May 1996-4 December 1997) from Secunderabad Constituency.^[14][15]

Political career

Narasimha Rao was an active freedom fighter during the Indian Independence movement^[9] and joined full time politics after independence as a member of the Indian National Congress. Narasimha Rao served brief stints in the Andhra Pradesh cabinet (1962–1971) and as Chief minister of the state of Andhra Pradesh (1971–1973).^[16] His tenure as Chief minister of Andhra Pradesh is well remembered even today for his land reforms and strict implementation of land ceiling acts in Telangana region. President rule had to be imposed to counter the 'Jai Andhra' movement during his tenure.

When the Indian National Congress 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).^[11] He rose to national prominence in 1972 for handling several diverse portfolios, most significantly Home, Defence and Foreign Affairs (1980–1984), in the cabinets of both Indira Gandhi and Rajiv Gandhi.^[16] In fact it is speculated that he was in the running for the post of India's President along with Zail Singh in 1982.^[17]

Rao very nearly retired from politics in 1991. It was the assassination of the Congress President Rajiv Gandhi that made him make a comeback.^[18] As the Congress had won the largest number of seats in the 1991 elections, he got the opportunity to head the minority government as Prime Minister. He was the first person outside the Nehru-Gandhi family to serve as Prime Minister for five continuous years, the first to hail from southern India and also the first from the state of Andhra Pradesh.^[2][19] Since Rao had not contested the general elections, he then participated in a by-election in Nandyal to join the parliament. Rao won from Nandyal with a victory margin of a record 5 lakh (500,000) votes and his win was recorded in the Guinness Book Of World Records.^[20][21] His cabinet included Sharad Pawar, himself a strong contender for the Prime Minister's post, as defence minister. He also broke convention by appointing a non-political economist and future prime minister, Manmohan Singh as his finance minister.^[22][23]

Achievements

Economic reforms

Rao's major achievement is generally considered to be the liberalization of the Indian economy. The reforms were adopted to avert impending international default in 1991.^[4] The reforms progressed furthest in the areas of opening up to foreign investment, reforming capital markets, deregulating domestic business, and reforming the trade regime. Rao's government's goals were reducing the fiscal deficit, Privatization of the public sector, and increasing investment in infrastructure. Trade reforms and changes in the regulation of foreign direct investment were introduced to open India to foreign trade while stabilizing external loans. Rao wanted I.G. Patel as his finance minister.^[24] Patel was an official who helped prepare 14 budgets, an ex-governor of Reserve Bank of India and had headed The London School of Economics and Political Science.^[24] But Patel declined. Rao then chose Manmohan Singh for the job. Manmohan Singh, an acclaimed economist, played a central role in implementing these reforms.

Major reforms in India's capital markets led to an influx of foreign portfolio investment. The major economic policies adopted by Rao include:

• Abolishing in 1992 the Controller of Capital Issues which decided the prices and number of shares that firms could issue.^[4][25]

• Introducing the SEBI Act of 1992 and the Security Laws (Amendment) which gave SEBI the legal authority to register and regulate all security market intermediaries.^[4][26]

• Opening up in 1992 of India's equity markets to investment by foreign institutional investors and permitting Indian firms to raise capital on international markets by issuing Global Depository Receipts (GDRs).^[27]

• Starting in 1994 of the National Stock Exchange as a computer-based trading system which served as an instrument to leverage reforms of India's other stock exchanges. The NSE emerged as India's largest exchange by 1996.^[28]

• Reducing tariffs from an average of 85 percent to 25 percent, and rolling back quantitative controls. (The rupee was made convertible on trade account.)^[29]

• Encouraging foreign direct investment by increasing the maximum limit on share of foreign capital in joint ventures from 40 to 51 percent with 100 percent foreign equity permitted in priority sectors.^[30]

• Streamlining procedures for FDI approvals, and in at least 35 industries, automatically approving projects within the limits for foreign participation.^[4][31]

The impact of these reforms may be gauged from the fact that total foreign investment (including foreign direct investment, portfolio investment, and investment raised on international capital markets) in India grew from a minuscule US $132 million in 1991-92 to $5.3 billion in 1995-96.^[30] Rao began industrial policy reforms with the manufacturing sector. He slashed industrial licensing, leaving only 18 industries subject to licensing. Industrial regulation was rationalized.^[4]

National security, foreign policy and crisis management

Rao energized the national nuclear security and ballistic missiles program, which ultimately resulted in the 1998 Pokhran nuclear tests. It is speculated that the tests were actually planned in 1995, during Rao's term in office,^[32] and that they were dropped under American pressure when the US intelligence got the whiff of it.^[33] Another view was that he purposefully leaked the information to gain time to develop and test thermonuclear device which was not yet ready.^[34] He increased military spending, and set the Indian Army on course to fight the emerging threat of terrorism and insurgencies, as well as Pakistan and China's nuclear potentials. It was during his term that terrorism in the Indian state of Punjab was finally defeated.^[35] Also scenarios of plane hijackings, which occurred during Rao's time ended without the government conceding the terrorists' demands.^[36] He also directed negotiations to secure the release of Doraiswamy, an Indian Oil executive, from Kashmiri terrorists who kidnapped him,^[37] and Liviu Radu, a Romanian diplomat posted in New Delhi in October 1991, who was kidnapped by Sikh terrorists.^[38] Rao also handled the Indian response to the occupation of the Hazratbal holy shrine in Jammu and Kashmir by terrorists in October 1993.^[39] He brought the occupation to an end without damage to the shrine. Similarly, he dealt with the kidnapping of some foreign tourists by a terrorist group called Al Faran in Kashmir in 1995 effectively. Although he could not secure the release of the hostages, his policies ensured that the terrorists demands were not conceded to, and that the action of the terrorists was condemned internationally, including by Pakistan.^[40]

Rao also made diplomatic overtures to Western Europe, the United States, and China.^[41] He decided in 1992 to bring into the open India's relations with Israel, which had been kept covertly active for a few years during his tenure as a Foreign Minister, and permitted Israel to open an embassy in New Delhi.^[42] He ordered the intelligence community in 1992 to start a systematic drive to draw the international community's attention to alleged Pakistan's sponsorship of terrorism against India and not to be discouraged by US efforts to undermine the exercise.^[43][44] Rao launched the Look East foreign policy, which brought India closer to ASEAN.^[45] He decided to maintain a distance from the Dalai Lama in order to avoid aggravating Beijing's suspicions and concerns, and made successful overtures to Tehran. The 'cultivate Iran' policy was pushed through vigorously by him.^[46] These policies paid rich dividends for India in March 1994, when Benazir Bhutto's efforts to have a resolution passed by the UN Human Rights Commission in Geneva on the human rights situation in Jammu and Kashmir failed, with opposition by China and Iran.^[47]

Rao's crisis management after the 12 March, 1993 Bombay bombings was highly praised. He personally visited Bombay after the blasts and after seeing evidence of Pakistani involvement in the blasts, ordered the intelligence community to invite the intelligence agencies of the US, UK and other West European countries to send their counter-terrorism experts to Bombay to examine the facts for themselves.^[48]

Challenges faced in office

Economic crisis and initiation of liberalization

Rao decided that India, which in 1991 was on the brink of bankruptcy,^[49] would benefit from liberalizing its economy. He appointed an economist, Dr. Manmohan Singh, a former governor of the Reserve Bank of India, as Finance Minister to accomplish his goals.^[2] This liberalization was criticized by many socialist nationalists at that time.^[50]

Rise in separatist movements

Rao has successfully decimated the Punjab separatist movement and neutralized Kashmir separatist movement. In dealing with Kashmir Rao's government was highly restrained by US government and its president Mr.Clinton. Rao's government introduced the Terrorist and Disruptive Activities (Prevention) Act (TADA),^[51] India's first anti-terrorism legislation, and directed the Indian Army to eliminate the infiltrators.^[52] Despite a heavy and largely successful Army campaign, the state descended into a security nightmare. Tourism and commerce were largely disrupted. Special police units were often accused of committing atrocities against the local population, Rape, kidnapping, torture and detention under false accusations.^[53]

see also Separatist movements of India

Babri Mosque riots

Members of the Vishva Hindu Parishad (VHP) demolished the Babri Mosque (which was constructed by India's first Mughal emperor, Babar) in Ayodhya on 6 December 1992.^[54] The site is believed by Hindus to be the birthplace of the Hindu god Rama and is believed by the Hindu Community to be a place of a Hindu temple created in the early 16th century. The destruction of the disputed structure, which was widely reported in the international media, unleashed large scale communal violence, the most extensive since the Partition of India. Hindus and Muslims were indulged in massive rioting across the country, and almost every major city including Delhi, Mumbai, Kolkata, Ahmedabad, Hyderabad, Bhopal struggled to control the Unrest.

Later Liberhan Commission, after extensive hearing and investigation, exonerated PV Narasimha Rao. It pointed out that Rao was heading a minority government, the Commission accepted the centre’s submission that central forces could neither be deployed by the Union in the totality of facts and circumstances then prevailing, nor could President’s Rule be imposed "on the basis of rumours or media reports". Taking such a step would have created "bad precedent" damaging the federal structure of and would have "amounted to interference" in the state administration, it said. The state “deliberately and consciously understated" the risk to the disputed structure and general law and order. It also said that the Governor’s assessment of the situation was either badly flawed or overly optimistic and was thus a major impediment for the central government. The Commission further said, "... knowing fully well that its facetious undertakings before the Supreme Court had bought it sufficient breathing space, it (state government) proceeded with the planning for the destruction of the disputed structure. The Supreme Court’s own observer failed to alert it to the sinister undercurrents. The Governor and its intelligence agencies, charged with acting as the eyes and ears of the central government also failed in their task. Without substantive procedural prerequisites, neither the Supreme Court, nor the Union of India was able to take any meaningful steps."^[55]

In yet another discussion with journalist Shekhar Gupta, Rao answered several of the questions on the demolition. He said he was wary of the impact of hundreds of deaths on the nation, and it could have been far worse. And also he had to consider the scenario in which some of troops turned around and joined the mobs instead. Regarding dismissal of Kalyan Singh (government), he said, "mere dismissal does not mean you can take control. It takes a day or so appointing advisers, sending them to Lucknow, taking control of the state. Meanwhile, what had to happen would have happened and there would have been no Kalyan Singh to blame either."^[56]

Latur earthquake

A strong earthquake in Latur, Maharashtra, also killed 10,000 people and displaced hundreds of thousands in 1993.^[57] Rao was applauded by many for using modern technology and resources to organize major relief operations to assuage the stricken people, and for schemes of economic reconstruction.

Corruption scandals

In July 1993, Rao's government was facing a no-confidence motion, because the opposition felt that it did not have sufficient numbers to prove a majority. It was alleged that Rao, through a representative, offered millions of rupees to members of the Jharkhand Mukti Morcha (JMM), and possibly a breakaway faction of the Janata Dal, to vote for him during the confidence motion. Shailendra Mahato, one of those members who had accepted the bribe, turned approver. In 1996, after Rao's term in office had expired, investigations began in earnest in the case. In 2000, after years of legal proceedings, a special court convicted Rao and his colleague, Buta Singh (who is alleged to have escorted the MPs to the Prime Minister).^[58] Rao appealed to a higher court and remained free on bail. The decision was overturned mainly due to the doubt in credibility of Mahato's statements (which were extremely inconsistent) and both Rao and Buta Singh were cleared of the charges in 2002.^[59]

Rao, along with fellow minister K.K. Tewary, Chandraswami and K.N. Aggarwal were accused of forging documents showing that Ajeya Singh had opened a bank account in the First Trust Corporation Bank in St. Kitts and deposited $21 million in it, making his father V.P. Singh its beneficiary. The alleged intent was to tarnish V.P. Singh's image. This supposedly happened in 1989. However only after Rao's term as PM had expired in 1996, was he formally charged by the Central Bureau of Investigation for the crime. Less than a year later the court acquitted him due to lack of evidence linking him with the case.^[60]

Lakhubhai Pathak, an Indian businessman living in England alleged that Chandraswami and K.N. Aggarwal alias Mamaji, along with Mr. Rao, cheated him out of $100,000. The amount was given for an express promise for allowing supplies of paper pulp in India, and Pathak alleged that he spent an additional $30,000 entertaining Chandraswami and his secretary. Rao and Chandraswami were acquitted of the charges in 2003,^[61]

Later life and financial difficulties

In the 1996 general elections Rao's Congress Party was badly defeated and he had to step down as Prime Minister. He retained the leadership of the Congress party until late 1996 after which he was replaced by Sitaram Kesri. According to Congress insiders who spoke with the media, Rao had kept an authoritarian stance on both the party and his government, which led to the departure of numerous prominent and ambitious Congress leaders during his reign.

Rao rarely spoke of his personal views and opinions during his 5-year tenure. After his retirement from national politics Rao published a novel called The Insider (ISBN 0-670-87850-2). The book, which follows a man’s rise through the ranks of Indian politics, resembled events from Rao’s own life.

According to a vernacular source, despite holding many lucrative posts he faced many financial troubles. One of his sons was educated with the assistance of his son-in-law. He also faced trouble in paying fees for a daughter of his who was then studying medicine.^[62] According to PVRK Prasad, an IAS officer who was Narasimha Rao's media advisor when the latter was Prime Minister, Rao asked his friends to sell away his house at Banajara hills to clear the dues of advocates.^[63] Rao was afraid of dying before clearing his dues to the lawyers.

Rao suffered a heart attack on 9 December 2004, and was taken to the All India Institute of Medical Sciences where he died 14 days later at the age of 83.^[64]

Death

He was cremated with full state honours in Hyderabad, after the then Chief minister of Andhra Pradesh, Dr. Y.S.Rajashekhar Reddy intervened.^[65] His body was kept in state at the Jubilee Hall in Hyderabad. His funeral was attended by the incumbent Prime Minister Manmohan Singh, former Prime Minister H. D. Deve Gowda, the incumbent Bharatiya Janata Party (BJP) president L.K. Advani, the Defence Minister Pranab Mukherjee, the then Finance Minister P. Chidambaram and many other dignitaries.^[66]

Rao's legacy and the current Congress leadership

It has been noted that the current leadership of the Congress party attempts to undermine Rao's legacy by denying him the credit for fostering economic reforms in India. For instance, it is reported that in a speech to mark the 125th anniversary of the Congress, the party president Sonia Gandhi "made it a point to ignore P.V. Narasimha Rao".^[67][68] It is also reported that^[69]

"Sonia Gandhi praised contributions of all Congress prime ministers except P V Narasimha Rao in her speech......Making no mention of Rao in her 15-minute speech, she said Rajiv Gandhi scripted the course of economic policies that were followed by the government (headed by Rao) for the following five years."

Several commentators argue that while Rao should be rightly blamed for his failure to protect the Babri Masjid, at the same time, he should be given credit for initiating the process of economic reforms in India. In an op-ed article published in Business Standard, A.K. Bhattacharya writes:^[70]

"Even today, the Congress leadership shows extreme reluctance to acknowledge the role PV Narasimha Rao played in appointing Manmohan Singh as his finance minister and giving him the freedom to unveil the economic reforms package to bail the Indian economy out of an unprecedented crisis. The Congress leadership was correct in blaming Narasimha Rao for his political misjudgment on the Ayodhya issue. But it is now time the same leadership also acknowledged Narasimha Rao’s role in ushering in economic reforms."

In similar vein, Harsh V. Pant argues:^{[71] [72]}

"Clearly as Prime Minister Rao failed in his duty to protect the disputed structure in Ayodhya......Rao's failure cannot be an excuse to deprive him of all the credit that is his due as the nation's prime minister at one of the most difficult times in India's contemporary history......Manmohan Singh is touted as the father of Indian economic reforms but as Singh has himself acknowledged it was Rao was fathered the process......Rao deftly navigated the political waters......and made economic reforms politically tenable. How ironical then that today the same Congress party functionaries......trying to take credit for India's economic success without acknowledging the role of Rao who envisioned and executed the process?"

Historian Ramachandra Guha asserts that Rao has become "the great unmentionable" in the Congress party. In an op-ed article in The Telegraph (Calcutta), Guha writes:^[73]

"Narasimha Rao may be denied the credit by the present Congress leadership for taking the Indian economy well above the ‘Hindu rate of growth’ of two to three per cent per annum. But they do not let the public forget his greatest defeat, which was his failure to stop the demolition of the Babri Masjid in December, 1992......From the point of view of the present Congress leadership, Rao’s problem was not just that he was not a Nehru-Gandhi, it was also that as prime minister he did not genuflect enough to the Nehru-Gandhis......Now that the Nehru-Gandhis once more control both party and government, P.V. Narasimha Rao has become the great unmentionable within Congress circles. I should modify that statement — Rao can be mentioned only if it is possible to disparage him. Thus his contributions to economic growth and to a more enlightened foreign policy are ignored, while his admittedly pusillanimous attitude towards the kar sevaks in Ayodhya is foregrounded......To forget his achievements, but to remember his mistakes, is a product of cold and deliberate calculation."

Commenting on the report of the Liberhan Commission, which exonerated Rao for his role in the Babri Masjid demolition, Indian Express editor Shekhar Gupta writes:^[74]

"He surely failed as prime minister to prevent the tragedy at Ayodhya. But his rivals in the Congress did their own party such disservice by spreading the canard that his (and their) government was responsible for that crime. This, more than anything else, lost them the Muslim vote in Uttar Pradesh and Bihar......any dispassionate reading of recent political history will tell you that this is a self-inflicted injury. The Congress has itself built a mythology whereby the Muslims have come to hold their party as responsible for Babri as the BJP......If you take Justice Liberhan’s indictment of so many in the BJP seriously, you cannot at the same time dismiss his exoneration of Rao, and the government, and the Congress Party under him. You surely cannot put the clock back on so much injustice done to him, like not even allowing his body to be taken inside the AICC building. But the least you can do now is to give him a memorial spot too along the Yamuna as one of our more significant (and secular) prime ministers who led us creditably through five difficult years, crafted our post-Cold War diplomacy, launched economic reform and, most significantly, discovered the political talent and promise of a quiet economist called Manmohan Singh."

References

External links

• P. V. Narasimha Rao - A Profile
• Obituary - Pamulaparthi Venkata Narasimha Rao
• THE JMM CASE
• Frontier India Journal - P V Narasimha Rao Section
• St. Kitts Case
• In Harshad Mehta's wake
• P. V. Narasimha Rao at Find a Grave