P.V. Narasimha Rao is the man that changed the face of the Indian economy in post-Independence India. Pamulaparti Venkata Narasimha Rao was an Indian lawyer and politician, and served as India’s 9th Prime Minister for a full term of five years, between 1991 and 1996.
He was the first non-Hindi speaking Prime Minister, hailing from the Warangal district in Telangana, which was formerly a part of Hyderabad State; and the first Indian Prime Minister to be of a South Indian origin. He was also the first person outside the Nehru-Gandhi family to hold the post of Prime Minister for a full five-year term.
Narasimha Rao obtained his Bachelor of Arts Degree from Osmania University, and later obtained a Master’s Degree in law from Hislop College, now under Nagpur University. He took part in the Vande Mataram movement in the late 1930s, in the Hyderabad State.
Narasimha Rao was an freedom activist during the Indian Independence movement. Post-Independence; he entered politics full-time, and joined the Indian National Congress. He served as Chief Minister of Andhra Pradesh, and successfully introduced Land Reforms in the Telangana region.
His prominence in Indian politics at the national level was marked by handling diverse portfolios in the Cabinets of Indira Gandhi and Rajiv Gandhi; when he served as Home Minister, Defence Minister and Foreign Affairs Minister.
After the assassination of Rajiv Gandhi, leading to the systematic breakdown of the political-economy of India and the resignation of Prime Minister Chandra Shekhar; upon the Congress winning the largest number of seats in the 1991 General Elections, Narasimha Rao became Prime Minister as part of the minority government.
P.V. Narasimha Rao, along with his Finance Minister Manmohan Singh, is responsible for leading India through a turbulent period and pulling the country out of economic darkness.
Here are the biggest achievements of P.V. Narasimha Rao, as India’s 9th Prime Minister.
I. Economic Reforms – New Economic Policy 1991
The economic landscape of India before Narasimha Rao’s Premiership was in shambles. The economic crisis prevailing at the time was caused by currency devaluation as a result of low reserves in balance of payments, which left the country in a twin-deficit state.
During the 1980s, India’s balance of payments was at a deficit. This was further aggravated by the 1991 Gulf War; in which India’s oil imports increased dramatically, exports failed miserably, the country’s credit dried up and investors withdrew their money. There was a build up of large fiscal-deficits, coupled with spill-overs from trade-deficits. The end of the 1980s saw India in a state of financial bankruptcy.
The country’s foreign exchange reserves in January 1991 were at $1.2 billion, and depleted by half in June. India had barely enough reserves to last three weeks of essential imports, and the country was one week away from defaulting on its external balance of payment obligations. The immediate response of the government, under Prime Minister Chandra Shekhar was to secure an emergency loan of $2.2 billion from the International Monetary Fund, by pledging 67 tons of India’s gold reserves.
The Reserve Bank of India had to ship forty-seven tons of gold to the Bank of England, and twenty tons to the Union Bank of Switzerland, to raise $600 million. The cargo was ferried to London on a chartered plane between 21st and 31st May 1991, which pulled the country out of economic slumber. The result ensued the collapse of the Chandra Shekhar government.
Upon taking on the Prime Ministerial post of India, Narasimha Rao roped in Manmohan Singh as his Cabinet’s Finance Minister. They initiated the New Economic Policy of 1991, under which reforms were introduced; for the reduction in import tariffs, and markets being deregulated leading to a reduction in taxes. The License Raj was abolished ending public monopolies, and the market expanded to include more foreign investments.
At the turn of the 21st Century, India progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalisation.
II. Foreign Policy
a. Look East
The Look East Policy is an effort to cultivate extensive economic and strategic relations with the nations of South-East Asia, in a bid to foster India’s standing as a regional power and a counterweight to the strategic influence of the People’s Republic of China.
The policy was developed and enacted by Prime Minister Narasimha Rao’s government, but was followed up and rigorously pursued by the successive governments of Atal Bihari Vajpayee and Manmohan Singh.
Under this policy, India’s strategy was focused on forging close economic and commercial ties, along with economic liberalisation and deference from Cold War-era policies. The policy also sought to foster strategic and security cooperation, and emphasise historic, cultural and idealogical links. The expansion of regional markets for trade, investments and industrial development; was observed under this policy.
b. Cultivate Iran
India’s relationship with Iran can be traced back to the friendship pact signed between Delhi and Tehran on 15th March 1950, which called for ‘perpetual peace and friendship’ between both the states. In reality, however, the relationship between India and Iran was viewed as rocky; with Iran’s close ties to USA and Pakistan under the leadership of Muhammed Reza Shah, through the Baghdad Pact or the Central Treaty Organisation (CENTO).
Iran had also provided military assistance to Pakistan, during the 1965 and 1971 Indo-Pakistan Wars. Though having aversions to super-power alliances through the Non-Alignment notion, India forged ties with USSR which became its primary defence supplier.
The ensuing decades of 1970s and 1980s saw tensions between both nations, but there were notable periods of positive engagement; both countries sustained economic ties during the period with special emphasis on energy issues.
However, the end of the Cold War marked significant improvements in the relationship between India and Iran. A turning point in the bilateral relations between both the nations was the visit of Prime Minister Narasimha Rao to Tehran in 1993, with him being the first Indian Prime Minister to visit the country after the revolution. Iran’s then president Ali Akbar Hashemi Rafsanjani made a reciprocal visit to India in 1995. High-level visits continued after 1995, and did much to boost mutual economic interests in key technological sectors.
As Prime Minister, Narasimha Rao pushed the ‘Cultivate Iran‘ policy, which paid rich dividends for India in the 1990s.
c. Exercise Malabar
The annual naval program started in 1992 includes a diverse set of activities, ranging from combat operations of aircraft-carriers through Maritime Interdiction Operations (MIO) exercises.
d. Indo-Israel ties
Before Prime Minister Narendra Modi‘s historic visit to Israel in 2017, Narasimha Rao first tried to foster ties between India and Israel during his tenure as Prime Minister; where many people perceived this as a bold move on Rao’s part at the time as it was a strong departure from the Nehruvian trajectory India had been following with regards to Israel.
Prime Minister Narasimha Rao took the gigantic step of establishing full-fledged ties with Israel on 29th January 1992, with India opening its first embassy in Tel Aviv.
III. Facilitating India’s Nuclear Programme
Though, it was the late Prime Minister Atal Bihari Vajpayee’s government that successfully conducted the test; Vajpayee paid tribute to Rao when the latter died in 2004, describing him as the ‘true father’ of India’s nuclear programme. Vajpayee said that Rao had assured the Prime Minister of the nuclear bomb’s readiness in terms of testing, which prompted the Vajpayee government to continue with the nuclear test; Pokhran-II.
The test was first supposed to be conducted in 1995 but Narasimha Rao postponed the arrangement since USA was paying close attention to India’s nuclear activities.
IV. Ending Insurgencies in Punjab
However, the state witnessed unprecedented violence for one and a half decades between the late 1970s and early 1990s. Thousands of lives were lost, and large scale suffering ensued. The creation of a separate state of Punjab in 1966; meant to satisfy the demands of the Sikhs for the Sikh-majority, Punjabi-speaking state within India, did not prevent the subsequent violent struggle for a Sikh state on ‘Khalistan‘ in the 1980s.
Operation Blue Star; propelled by former Prime Minister, Indira Gandhi, and the ensuing Anti-Sikh riots as a result of her assassination led to manifold increases in the violence in the Punjab. Militant activities significantly increased between 1987 and 1992; including blasts, robberies, extortions, smuggling and kidnappings. The violence in the state became prominent as a result the complete absence of protests, particularly in rural areas.
The Prime Minister was determined to bring back an elected government in Punjab, which was under President’s Rule at the time; no matter how narrow the electoral base. He believed that only this could isolate the militants from the rest of the Sikh population, an insight by Rao which proved to be prophetic. The polls brought the Congress to power under Jatt Sikh Chief Minister, Beant Singh. With the help of K.P.S. Gill, Beant Singh was able to mobilise mainly the Jatt Sikh villagers in the border areas to resist the infiltrators. This move resulted in the militancy being caught between the villagers and the Police, which saw its collapse within a year.
V. Facilitating releases of Doraiswamy and Liviu Radu
On two separate occasions, Prime Minister Narasimha Rao had to negotiate the release of two high profile individuals; Doraiswamy, a prominent India Oil executive who was kidnapped by Kashmiri militants, and Liviu Radu, a chargé d’affaires from Romania in New Delhi by Khalistan Sikh militants.
Liviu Radu, a Romanian diplomat to India was kidnapped by the Khalistan Commando Force in October 1991. They demanded the release of some of their captured members in exchange for the foreign diplomat’s life. The central government under Narasimha Rao refused. With the criticisms of the kidnappings by Sikh politicians, Radu was released by the militant group, unharmed.
K. Doraiswamy, an executive in the state run Indian Oil Company, was kidnapped by Islamic militants in the Northern Kashmir valley. The militants demanded the release and exchange of eight captured Kashmiri rebels. Doraiswamy was held for 54 days in captivity, before the government released the eight men in exchange for Doraiswamy’s life.
Prime Minister Narasimha’s tenure can be looked at as one of the most important Premierships in India, as the country was undergoing pivotal economical and social turbulences at the start of his tenure. He managed to pull the country out of debt, and set it on a path towards economic liberalisation resulting in India being one of the ‘fastest growing economies in the world’.
He inherited the responsibility of running the country at the height of insurgencies and communal divide in the country. In spite of all these problems, he managed to lead India through its own turbulence into economic and social modernity.
He is referred to as Chanakya by his peers, for his ability to steer through tough economic and political legislation through a time when he headed a minority government. Rao was a computer technician along with being a statesman and an economist, with the ability to speak seventeen languages; having fluency in Telugu, Marathi, Hindi, English, Tamil, Urdu, Kannada, Oriya, Sanskrit, French and Spanish.
P.V. Narasimha Rao was awarded with the Pratibha Murthy Life time Achievement Award in 2002.