An IMF loan had been negotiated in 1981-82; but that had not jolted prime minister Indira Gandhi into liberalizing the economy. Foreign ministry mandarins knew that the Soviet Union was teetering since at least 1985, and India’s détente with the United States had first begun a decade prior to Rao becoming PM. By the early 1980s, policymakers could objectively measure that welfare schemes were not reaching the poor, and India’s nuclear programme had progressed steadily. Two Nehru-Gandhis had been killed in this decade, and violence in Punjab and Assam had already peaked. Even the specific ideas for foreign policy and economic reforms had been put down on paper some years prior to 1991.
Four prime ministers before Narasimha Rao had been presented with the right ‘moment’—in terms of favourable external winds, well-sketched internal ideas, and opportunistic crises—to renovate India. They had been unable to make use of these opportunities.
For more proof that India’s transformation was not ordained, consider the alternatives for premiership. What would have happened if Rajiv Gandhi had lived on? The idealistic reformer of 1985 had malformed, by 1987, into a cynical politician. It is unlikely he would have pursued meaningful change in his second term as prime minister. Had Rao’s party rivals, Arjun Singh or N.D. Tiwari, replaced him, they may have temporarily liberalized the economy in 1991. But their instincts, and proclamations, were consistently against economic reforms or foreign policy changes. They would have likely halted reform after the foreign exchange crisis ended in February 1992. The transformations Rao brought about were far from inevitable.
They were also carried out in the most trying of circumstances.
P.V. Narasimha Rao worked in a fractious democracy and ran a minority government (the two before him and four after—all minority—lasted barely a year each). A usurper of the Nehru-Gandhi throne, Rao did not control his own party. He even lacked the charisma to appeal directly to the people.
No national leader who achieved his scale of transformation worked under such constraints. It makes Narasimha Rao the most skilled Indian prime minister since Jawaharlal Nehru, a twentieth-century reformer as consequential as Deng Xiaoping.
P.V. Narasimha Rao was born a fixer. When something didn’t work, his first instinct was to open it up, figure out what was wrong, and make marginal improvements to solve the problem. As a young man in 1957, he noticed a malfunctioning water pump. He opened it, identified the problem, fixed it, and complained to the manufacturer. As chief minister in 1971, he had observed evasions of his cherished land reform policy. He had tweaked the law in ways that ensured their compliance. Two years later, he noticed that planting rice in his village was not remunerative. He bought more valuable cotton seeds from Gujarat. When he realized that the cotton plants self-pollinated and weakened the new crop, he ingeniously fixed a straw on the plant so that pollen would fly elsewhere. As Ramu Damodaran says, ‘Rao was a jugaad reformer. He made the best of what he had.’
What the early Rao had yet to grasp was that all reforms take place under political constraints, and are opposed by interest groups.
His failure to see this led to his dismissal as Andhra Pradesh chief minister. He had taken on too many enemies, used explosive language, and made his intent to reform clear. He had also misinterpreted his mandate: prime minister Indira Gandhi had wanted a minion both powerless as well as powerful, and that could never be.
Narasimha Rao learnt from his mistakes while in exile—it was this ability to introspect that made him so rare among his peers. He realized that reform is best carried out in silence, and opponents best countered singly. The arch-socialist also recognized that the state need not be the only vehicle for social reform.
His years in the Delhi durbar—more court than Cabinet—honed in him these lessons. He never cultivated a coterie, never favoured caste or kin. This was why he had become chief minister of Andhra Pradesh; this is why he rose to become Indira and Rajiv’s factotum. His time in Delhi also gave him a ringside view of the colossal failure of Rajiv Gandhi in combating vested interests who resisted change. A liberalizer by instinct, Rajiv lacked the skills to manage the politics of reforms.
As prime minister, Rao inherited these same vested interests. The licence raj was upheld by businessmen who had prospered from monopolies, Left intellectuals and Congressmen who clung on to ideology, and unions and bureaucrats worried their sinecures would be threatened. It was not just anti-colonialism that prevented relations with Israel, it was also the unverified fear of losing Muslim votes that bound India to Palestine. Rich farmers, middlemen and corrupt officials siphoned off money from welfare schemes meant for the poor. They would agitate if their privileges were taken away.
Prime minister Narasimha Rao’s genius in tackling these enemies of change was that he had learnt to assess political strength and weakness—his own, his opponents’, and of India itself. The fact that Rao had informally accepted monkhood just two months before becoming prime minister shows the mental distance from power he had developed. It gave him an even clearer assessment of its constraints as well as opportunities. It gave him his unique ability to transform India.
This 360-degree view of politics means that, before initiating any reform, Rao had the measure of his opponents. When the prime minister invited Palestinian leader Yasser Arafat for an official visit in January 1992, he understood that India needed to normalize diplomatic relations with Israel without upsetting the Arab world. He also knew that Arafat, who had supported Saddam Hussein in the Gulf War, was politically weak. While advocating reforms to industrial policy, Rao knew that the principal critique would come from with his own party. In developing a nuclear deterrent, Rao grasped that he had to protect Indian national security without antagonizing the West (whom he needed for economic reforms). While facing Parliament, Rao saw that the right-wing BJP and left-wing National Front needed to stay disunited for his government to survive. While opening up the airline sector, Rao knew that if he attempted to disinvest Air India, well-entrenched unions might threaten his entire liberalization policy. In attempting to reform the public distribution system, Rao saw that rich farmers would agitate to protect their interests. The list could go on.
This cold-eyed assessment of his enemies gave Rao the ability to pick his disguises. He understood that the range and variety of his foes—indeed the contradictions of India itself—required him to occasionally retreat, sometimes fight, and often deceive. This ability to assess the situation and play mouse, lion or fox—as need be—was Rao’s paramount political skill.
On industrial policy—Rao’s supreme economic reform—he was able to assess the mood of his party, ensure the policy draft was peppered with enough references to Jawaharlal Nehru, play the cunning fox, and get his party behind his reforms. Before opening up to Israel, Rao first pampered Arafat, got his consent, then announced it to Parliament as a fait accompli. When opening up monopoly sectors like airlines, Rao simultaneously played lion in permitting private competition while playing mouse when it came to protecting state employees from retrenchment. On the PDS, he simply increased the price paid to both farmers and consumers, thereby subtly starving the system.
Rao’s precise assessment of political context gave him not just a sense of role, but also a sense of timing.
He was horror-struck when he heard of Rajiv’s death on 21 May 1991. But even in the disorienting hours following tragedy, Rao was able to see his stars realigning. After the fall of Babri Masjid on 6 December 1992, Rao realized he could use the tragedy to rally ‘secular’ forces around him and consolidate power. And perhaps most remarkable of all, it took the lifelong economic protectionist only a few hours on 19 June 1991 to see that the time had come for the economy to open up.
Contrary to the caricature of Narasimha Rao as chronically indecisive, he could make rapid decisions when he felt the timing was right, including choosing to alter long-held beliefs. Where he dithered, it was because he judged that the right decision was at the time not politically feasible.
It is this judgement that led Rao to conclude that certain reforms, while necessary, were not possible during his time as prime minister. These were on agriculture, labour, the bureaucracy, and welfare. Given his weak mandate, Rao estimated he would have lost office had he soldiered on. Critics accused him of underplaying his hand, but the fact that no prime minister after him has been able to implement these reforms proves Rao’s calculation to be correct.
The few occasions where prime minister Rao misunderstood his role and misjudged the timing was when his analytical mind and unflinching eye failed him. His decision to not impose President’s rule in Uttar Pradesh in November 1992 was an overestimation of his own strength in dealing with Hindutva activists. Where he had to play lion, he played fox. Rao’s determination to play lion and ignore Sonia after 1993 overrated his own hold over the Congress party. And his decision to play fox and impose hawala charges on friend and foe earned him more enemies than it did votes.
These missteps blot Rao’s record as prime minister. But they remain aberrations in a long line of correct calls. Most of the time, P.V. Narasimha Rao got the timing and role right.
Childhood loneliness—from his early adoption, arranged marriage, and separation from family—persisted into adulthood. An intellectual, he preferred books to actual friends, confidential diaries to confidantes. To his wife Satyamma, he tasked the care of their eight children and acres of village lands. Emotionally, he was a loner.
It is a measure of the contradiction of the man that such a personality was also an idealistic revolutionary. In Andhra of the 1960s, the young socialist was action personified, unsettling the ministries he took over. As chief minister, Narasimha Rao had unthinkingly charged at the windmill of land reform, uncaring of the stability of his saddle.
What was remarkable about the later Rao was that these contrasts merged into what became—at the best of times—a man who could be contemplative as well as action-oriented, cynical as well as idealistic. Rao could play for time, as he did with the nuclear programme in the initial years of his government. He could also act swiftly, as he did in a single day on economic reforms. He could project powerlessness, as he did when Sonia Gandhi chose him as prime minister. He could also project power, as he did after 1993.
When it came to God, Narasimha Rao reflected the contradictions of his guru, Ramananda Tirtha. He was a religious Hindu as well as a secular Congressman. He was devout enough to be offered the chance to head the Courtallam peetham; catholic enough to be versed in Urdu, Persian and Koranic scripture. His view of Hinduism may have given him a naïve view of the BJP, but he refused to split the Congress and support them in May 1996.
Narasimha Rao did not see these two parts of his personality as incompatible; he saw them as rooted in Hindu tradition. He loved the sixteenth-century Telugu poem Raghava Pandaveeyam that could be read as both Ramayana and Mahabharata, as the situation demanded. He even translated a book featuring Ardhanareeeshwara—the Hindu god who is half-man, half-woman.
Rao’s dual disposition enabled him to be at once principled, at once immoral. Personally honest, he was no stranger to political corruption. Though the courts acquitted him in the JMM bribery case, the evidence available to this author suggests he was in on the conspiracy. While Rao could be sensitive to those he loved, he could also be petty to subordinates, distant to family, instrumental with friends, and vicious to his enemies.
Even Rao’s association with women reflected a certain opacity. He lived away from his wife for much of their marriage. He had a relationship with Lakshmi Kantamma for more than a decade. From around 1976 till his death, he had a close friendship with Kalyani Shankar. ‘He liked that people around him couldn’t quite figure out the exact nature of these connections,’ a friend of Rao says. ‘He liked the ambiguity.’
Rao’s varied persona also gave him hobbies when exiled from politics—as he was in 1973 and ’76 by Indira, 1991 by Rajiv, and post-’98 by Sonia Gandhi. While the curse of politicians the world over is that they don’t know how to ‘exit’ with grace, Rao could distance himself from power. It contributed to his unique insight into it.
Rao’s most adroit deployment of these skills is also perhaps the least acknowledged. Unlike in the case of economic reforms, welfare schemes, foreign policy or the nuclear programme—all dealt with in separate chapters in this book—Rao played only an indirect role in reducing separatist violence. But his interventions in Punjab, Kashmir and the North-east showcase perfectly, his ability to play lion, fox and mouse.
When Narasimha Rao became prime minister, Kashmir and Punjab were under Central rule, while Assam was ruled by a chief minister being undermined by state Congressmen. Rao’s first act was to appoint his own team. When it came to Kashmir, he changed the governor. He would eventually give his home secretary, K. Padmanabhaiah, direct charge of Kashmir affairs. ‘That was a smart decision,’ the former RAW chief and Kashmir expert, A.S. Dulat, believes. ‘He was reporting straight to the PMO.’ Rao also enlisted the bureaucrat—and Sonia Gandhi favourite—Wajahat Habibullah to be his prime negotiator in Kashmir. When it came to Punjab, Rao appointed a new governor, and ensured that K.P.S. Gill was not moved out as police chief (despite constant complaints against him). He also gave the Assam chief minister, Hiteswar Saikia, his unconditional backing. Not only was Saikia under pressure from ULFA militants, he was facing dissent from within his own party. In November 1991, for example, Saikia sent Rao a secret letter—now archived amongst his papers—that state Congressmen were plotting to get him replaced.3 Rao chose to stand by Saikia through his years as prime minister.
In addition to appointing his chosen men, Rao allowed some of the most ruthless assaults on militants during this period. Operations by the army and police wiped out the top militant leadership of ULFA in Assam and the Khalistanis in Punjab. ‘Rao knew exactly what was happening,’ an IB official coordinating the attacks remembers. ‘He even knew we were targeting [militants’] families.’
Rao’s condonation of human rights abuses shows a pitiless politician, willing to do what it took to preserve the integrity of India. What made him such a bundle of contradictions, however, was his simultaneous belief in freedom and democracy.
In the case of Punjab, Rao ordered elections to be held in 1992, despite every single official telling him not to. Though the elections were boycotted by the Akalis and the chief minister eventually killed in 1995, this judicious mix of carrot and stick had the desired effect. By the time Rao left in 1996, Punjab was on the way to normalcy.
In the case of Kashmir, Rao was desperate to have elections in 1995. ‘Rao knew that the rigged elections [of 1987] was the catalyst for the insurgency,’ a police official from Kashmir says. ‘He wanted to undo that.’ His private papers are full of secret meetings he held with terrorists and freedom fighters of varying shades, imploring them to stand for elections instead
Rao also ordered an unusually large development package for Kashmir. His most equipped socialist official, K.R. Venugopal, remembers: ‘The guiding and supervision of this effort was entrusted to me in the prime minister’s office.’ Returning from one of his many visits to rural Kashmir, Venugopal told Rao, ‘The cultural alienation could be compared to the feelings in Telangana, excepting for there being no hostile power sitting on the borders.’
Though Rao could not conduct elections during his tenure, they took place soon after, in 1996. And though Rao’s policies have not made the local population any less hostile towards India, they have created a semblance of normalcy and democracy in that troubled state.
A.S. Dulat says, ‘His role in Kashmir followed the pattern of his economic reforms. He wanted to look ahead. When he became PM, it was the worst time in Kashmir. So obviously the old man believed this danda rule and military rule is OK up to a point. But he also believed: “We have to deal with the people, and we have to move on.”’
As prime minister, Rao also encouraged peace talks in the North-east. The Bodoland Autonomous Council was set up during his time. Rao proved willing to talk to every dissident, though he had no illusions about his powers to persuade. He once called Bodo separatists for a secret meeting in his house on Race Course Road. They seemed amenable, but Rao later told an aide: ‘Things always go well in the PM’s office. The question is what happens when they go back.’ Narasimha Rao also met—in secret—Naga separatist leaders in 1995 in Paris. Officials say that it helped lay the groundwork for peace talks undertaken by prime minister Narendra Modi twenty years later.
In every one of these manoeuvres, the former chief minister of Andhra Pradesh revealed a skill in dealing with state politicians that Indira Gandhi and Rajiv lacked. He knew the details and the players intimately. His dual personality was also comfortable with deploying a range of options—from brute force, to monetary allurements, to electoral enticements—and manage these mutinies.
It is too much to credit one clever prime minister with reducing violence in Kashmir, Punjab and the North-east. Changes in external conditions, the exhaustion of locals with violence, effective counter-insurgency, and improved state governance mattered as much, if not more. But it remains to Rao’s credit that his calibrated responses aided the process rather than setting it back. ‘Rao was prepared to use sama, dana, bheda, danda . . . every technique,’ the journalist Shekhar Gupta says.3 It was a messy story, but it enabled perhaps Rao’s most underrated achievement: preserving the territorial integrity of his country.
Rao’s transformation of India was assisted by his ability to select the right team. For Punjab, Kashmir and Assam, he had his favoured governors, negotiators and chief ministers. On foreign policy, he selected pragmatists who delivered. He retained the old team when it came to the nuclear programme. He chose pro-market reformers for the economy, while staffing his welfare schemes with socialists. Many of his team members did not see eye to eye, but Rao tolerated, perhaps even encouraged, a team of rivals. This was in contrast to Indira Gandhi, who liked sycophants, and Rajiv, who appointed childhood chums. Flattery or conviviality, Rao believed, was not the same as effectiveness.
One of the reasons why Rao patronized talented people was that he was secure in his own abilities. He told an intelligence bureau man whom he turned to for advice, ‘I don’t like you. But you have insights I need.’ A proactive manager, Rao’s knowledge of files and rules was as good as his best bureaucrats. As Kalyani Shankar—his closest confidante—says, ‘He would listen to everybody, take everyone’s inputs. But he would always make up his own mind.’
Of all his team members, historically the most important was Manmohan Singh, who would later go on to become prime minister. Manmohan was not the only pro-market reformer Rao selected; his principal secretary, Amar Nath Varma, was arguably as important to the liberalization process. Neither was Manmohan Singh the first choice for finance minister; that was the pro-market economist I.G. Patel. But Manmohan played the role Rao had anticipated for him: he was a scrupulously honest technocrat who could both deflect blame from Rao as well as prod the prime minister when Rao’s instincts faltered. Unlike almost every other Congressman, Manmohan Singh never disowned his former boss, respecting him in retirement, attending his funeral, and gracing birthday celebrations held since. Manmohan also never belittled Rao’s role in liberalization.
That was done by other members of the Congress, and by Narasimha Rao himself. Since economic reforms were politically dangerous in the 1990s, Rao found it convenient to ‘blame’ Rajiv Gandhi and Manmohan Singh for them. Rao’s success in obscuring his own role has worked against him. Few credit him, as this book does, with being the principal architect of India’s economic reforms.
This cannot be emphasized enough. For, though Manmohan was critical to Rao’s team, he was not indispensable. Had I.G. Patel become finance minister in 1991, liberalization would have likely persisted. But had Narasimha Rao not become prime minister, India would have been a different country.
When the ex-chief minister Narasimha Rao returned to his village house in Vangara in 1974, he realized that the mud building was unsuited to the times. He decided to demolish it and build a brick and mortar structure in its place. Tellingly, and as we saw in an early chapter, Rao kept the original measurements—calculated according to vaastu architectural rules. Even while modernizing, Rao paid his respects to tradition.
This small incident captures Rao’s larger philosophy. As foreign minister in the 1980s, he had noticed how Deng was able to reorient China towards the market by claiming he was only carrying out Mao’s wishes. For a system as complex as China’s, a sharp break from the past would have led to disarray. When Rao became prime minister, he too claimed that his economic and foreign policies were mere extensions of the past. And even as he moved towards the United States, Israel and East Asia, he balanced this with reassurances to old allies such as Russia.
When faced with the advent of new technology—like computers, satellite television or mobile phones—Rao’s was not a Luddite’s instinct to regulate; he, instead, sought to adapt and adopt. The prime minister’s New Year greeting card for the year 1992 had a sketch of a spinning wheel smoothly turning into a mechanical gear. Typed below was the slogan ‘Change is the only constant’.
‘How do you make a U-turn without making a U-turn? That’s a special Narasimha Rao art,’ Shekhar Gupta asked him in retirement. ‘It’s not like that,’ Rao replied. ‘If you understand that where you were standing is itself in motion, the turning becomes easier.’
Such a philosophy was both strategic as well as ingrained. The psychologist Ashis Nandy argues that ‘the tradition of India is to alter the dominant culture from within by showing dissent to be part of orthodoxy . . .”
Rao spoke ten languages (seven of which were Indic) and was a skilled translator. It was a skill that reflected his world view. As he put it, ‘We have this great tradition of interpretation, the Bhashyakara . . . [Nehru] took the text from Gandhiji. He moulded it, he interpreted it so as to be in continuity with Gandhiji and still different from what he started with. What we need today is persons who can imbibe Nehru not just as spongers.”
This political vision and skill enabled Narasimha Rao to reorient India’s economic, foreign, welfare, nuclear and federal policies. Rao’s idea of India was one that was open for business, sought to pragmatically shape the world order, pursued soft as well as hard power, stayed centralized while being sensitive to federal concerns, and used large social schemes to improve the lives of its marginalized. Later governments—inhabiting the entire range of ideological persuasions—have broadly followed his direction. But while they have built on, even improved, these ideas, it is Narasimha Rao who deserves credit for setting India off on a new direction.
Narasimha Rao’s legacy also manifests in the everyday lives of most Indians. Real incomes of Indians across percentiles have increased. Most families—no matter how poor, how marginalized—are better off than they were before Narasimha Rao. Every time an Indian gives a missed call using her mobile phone, she has Rao to thank. The boom in private India—from corporate jobs to private airlines and toll roads—was possible largely because of Rao. The increase in social-sector schemes—from employment guarantee to better-targeted food subsidies—exemplifies Rao’s vision (and warts), while incorporating the new technology developed since then. Even the way Indians think of politics has changed, with voters now demanding service and performance rather than just being content with patronage.
Narasimha Rao lives on not just in this newer idea of India and the transformation of a billion lives, he persists in strategies that future prime ministers must use if they wish to succeed. This is because the contradictions that constrained Narasimha Rao continue to bind later Indian leaders. For, they are the paradoxes of Indians themselves.
It is the Indian voter who is half a lion.
We expect leaders who are all-powerful, without providing them a clear mandate. Five prime ministers since Rao were denied majority control of Parliament. It was only in 2014—almost twenty years after Rao’s time in office—that a prime minister actually commanded a full majority, and he too only got one-third of the popular vote. The Indian voter is unsure whether to centralize power or devolve it. When states misbehave, the expectation is that the Centre will intervene. When they do, it is portrayed as a threat to federalism.
Indians have grown to expect the benefits of liberalisation—the large government schemes, the consumer options, the improvements in income. But voters are unwilling to reward political parties for espousing economic growth.
Indians complain that the bureaucracy is unresponsive. Their private mobile phone provider responds quicker than the police. Yet few Indians would support the radical restructuring of the state, the firing of administrators who don’t perform. Most Indians know—and say so—that government schemes meant for them are siphoned off. But few are willing to agree that the pipeline needs refitting.
We expect the highest moral standards of politicians, yet make it impossible for them to win without spending black money. Every time a scandal erupts, we take to the streets. But we are unwilling to turn those blips into sustained activism.
Narasimha Rao’s genius was that his own ambiguities matched those of his countrymen. ‘India is destined to walk on [a] razor’s edge,’ he used to say. That India, that voter, has not changed, and the job of leading the world’s largest democracy remains mired in contradiction. Every prime minister—no matter what his disposition—will have to learn from P.V. Narasimha Rao.
[This excerpt from ‘Half Lion: How P.V. Narasimha Rao Transformed India' by Vinay Sitapati has been reproduced with permission from Penguin Random House]
Also listen in to a conversation with Vinay Sitapati on how a man with ostensibly no power and charisma brought about big changes.