Manmohan Singh did not free the Indian economy; P.V. Narasimha Rao did... Let's get that bit straight... I’ll tell you how.
A human bomb killed Rajiv Gandhi in 1991. Narasimha Rao was just about to retire from politics, but the Congress had other ideas. They wanted to make the – according to them, 70 something, unassuming, dull, and balding – politician to be the ‘stopgap PM’ of a government no one thought would last the whole term. But Narasimha Rao unleashed India’s biggest revolution since 1947 during his stint.
He understood India was bankrupt. Yes, WE WERE BANKRUPT! Our currency reserves wouldn’t let us buy oil for more than 2 weeks, especially with crude prices skyrocketing. There were talks of a bailout from the IMF like some EU countries are offered now. Gold reserves worth $2.2 billion had been flown from India to London as collateral for the bailout! The day after he was sworn into office, Rao stated that the government wanted to ‘remove the cobwebs that come in the way of rapid industrialisation... make India internationally competitive, taking full advantage of... opportunities offered by the evolving global economy’. Rao hired non–politicians to do the job – Manmohan Singh as FM and P. Chidambaram as Commerce Minister.
|P.V. Narasimha Rao - our nation's hero|
Singh devalued the Indian currency by about 20% in 2 days and proposed to abolish export subsidy, which reduced the fiscal deficit by a mammoth 0.4%. Chidambaram, a Harvard M.B.A. graduate, spent a week burning the midnight oil understanding the major issues India faced. Then, with MMS and Montek Singh Ahluwalia, he dismantled the 40 year old ‘Licence Raj’ in about 8 hours. They hurried to Rao’s house at 9 p.m. and he signed the policy. Rao wanted to further delicence all industries except the sensitive ones related to security. But he didn’t go the whole hog immediately. Instead, he arranged for reforms to be released in a phased manner. He had Chidambaram and MMS reword the policies so they seemed in continuation of Rajiv Gandhi’s work. He had friends in the opposition, whom he covertly convinced to support the new policies. He provided incentives to industries for progress. Consequently, India survived an embarrassment and is today viewed as a potential superpower.
It pains to see Rao not credited for the work he did in liberating the Indian economy; the Congress is always mum. Most experts don’t know the names of cabinet ministers of that time. That’s because Rao held those portfolios himself. If it wasn’t for Rao’s grit, political suaveness and in–depth understanding of India’s problems and their solutions, we would all have been neck deep in crap. Neither Manmohan Singh nor Chidambaram or Ahluwalia could have pulled off what they did without backing and support from Rao. No one else could’ve done what he did. Not Gandhi, not Nehru, not his daughter and neither her son.
Here’s a salute to the visionary named P.V. Narasimha Rao; one of the best things that could happen to India. Thanks to him, today we drive good cars, own fancy gadgets and watch English channels on widescreen TVs. India needs more leaders like him to grow, indeed.