Political leadership in crisis – Narasimhanomics


Narasimha Rao was a contradictory character. His contradiction was at the heart of who he was. He was corrupt, he was a visionary. He could be principled, he could be unprincipled. He knew how to win, he knew how to lose. His name was a pretty good indicator of who he was. His name was Narasimha, which is half man, half lion. Some of you who know the myth of Hiranyakashipu; to kill a demon you couldn’t be a full human being and you couldn’t be a full animal – you have to be a half of both. And the problem India faced in 1991 was such that you needed a contradictory man, a man adapt at a variety of ways to get the things done, to solve the problem. 

As we look back on the last 25-30 years and we ask the question what a Prime Minister inherited and what is the kind of India that a Prime Minister is leaving behind? The one person who inherited a complete mess and left behind an economy that was thriving, a country that was on the verge of becoming a nuclear power with Narasimha Rao. The leadership of what was done in 1991 was Narasimha Rao’s, it is he, like Chandrashekhara before him who became the PM, headed the cabinet, was briefed about the state of the Nation and took a certain set of decisions. One of those decisions was to employ an international reputed economist who had global standing as his finance minister. Narasimha Rao’s first choice was actually I.G. Patel, another former Governor of RBI who had worked abroad in UNDP and IMF. It is only when I.G. Patel declined the job that he turned to Manmohan Singh. Now Manmohan Singh of course was a tremendous civil servant all his life, so when the PM called him and made him a finance minister and said I want you to do A-B-C-D, he did that.

One of the most interesting thing that happened in India in the 1980’s, in the decade presiding 1991, is the transformation – the agrarian transformation, the green revolution, the emergence of a new business class – India underwent a tremendous change. So, an Intelligent Politician like Narasimha Rao have understood that ideas that they have inherited from the past, particularly during early periods of Indira were no longer relevant, after all Indira herself went to IMF in 1981 and brought about major changes in the economic policy. So I think he was pragmatic congress politician, all congress politicians are generally pragmatic they are not ideological like of the Left or Right wing political parties.

The problem with India is politics, the solution in India is politics. The ideas behind the 1991 reform, the blueprints behind the 1991 reform began from the early 1980’s, in almost the final form the new industrial policy which ended the domestic licence raj was crafted by Rakesh Mohan in 1988.

What was required was a politician who had the ability to outmaneuver opponents to reform. Now we all think the biggest opponent to 91 reform were Left intellectuals, that’s partly true, but big businessmen, the bombay club who loved the licence raj because they had access to ministers, love the licence raj. Soon after the 91 budget Mr. Keshav Mahindra gave a speech against the 91 budget and a congress politician went and told him, ‘You don’t sound like Keshav Mahindra, you sound like a JNU student’. Narasimha Rao’s remarkable ability was to outmaneuver big businessmen, outmaneuver bureaucrats, outmaneuver Left intellectuals and most importantly outmaneuver his own party. Now in doing this certainly Manmohan Singh helped, he was incorruptible, he was a technocrat and in a few instances like devaluation, when Narasimha Rao’s own nerve failed Manmohan Singh rose to the occasion. But if problems of India are political, when you have few success stories, the answer has to be politics. It was Narasimha Rao’s genius that what was a radical political shift in India he couched us technocratic, saying that, ‘Why are you asking me? Dr. Singh has the P.hd. ask him’. There is no doubt at all that without Narasimha Rao nothing would have changed. Look at the alternatives, N.D. Tiwari, Arjun Singh, Sharad Pawar, would they be responsible for the India we know today?

Narasimha Rao’s contribution was in the field of education. He was the HRD minister, the Kendra Vidyalaya, the district level public school etc were setup during his time and lot of initiatives taken later by subsequent government started during his time. At the end of the day education is a state subject and the constitution have left it to the state governments to actually implement public education and it implemented differentially, Kerala has 100 percent literacy while many of the states in North have much lower level of literacy. Should it have to be left to states? Should the Central government been more pro-active? That is a different constitutional issue. But I think when we look back at 91, it is not just about the economic reforms, now that is the mistake often we make but 91 was in fact the most important year after 1947 for three reasons – Reason no. 1 – Of course the economic shift, but reason no. 2 – was it was the end of the era in the international politics (The collapse of the Soviet Union, the end of the cold war) the whole world was changing and Narasimha Rao had to lead India through very difficult and an external environment and reason no. 3 – is he was a last congress PM because after that the Congress party has never had a government of its own. It had a UPA government which was initially supported by the Left and then by Mulayam Singh but Manmohan Singh was a UPA PM. Thus, the politics of 91 was as significant as the economics of 91.

Narasimha rao has really got a bad name for being pro rich – anti poor and we pose someone like Indira Gandhi for being anti rich and pro poor. But lets just look at the data – before Narasimha Rao became Prime Minister he had held the education and health portfolio in Andhra Pradesh and again in Delhi in the 80’s, the national education policy of 1986 was promoted by Rajiv Gandhi but written by Narasimha Rao. As PM he continued to hold the education policy, the kind of budgetary increases that we see today; schemes like NREGA being $10 bn is unthinkable before 1991. For anyone who claims that Indira Gandhi was pro poor, let’s ask the simple question, What was the budgetary allocation at the National level for primary education and primary health during her time? We didn’t even have something approaching a national policy. Now Narasimha Rao definitely wasn’t as much of a success in welfare schemes as he was when he came to the economy but it wasn’t for the lack of trying. The national rural health mission (NRHM), the Navodaya Schools – so  many of the critical interventions we see in public and primary education in India today took place because of Narasimha Rao. There is definitely a debate to be held that, Why is a country that is growing at 7,8,9% not having the kind of health and education outcomes that a country like that should have? But I think that’s a more serious question and definitely Narasimha Rao bears some role in the failure but he is the PM who did the most to try to do it and any PM after has match at least that action.

Narasimha Rao was a Leftist, he was a socialist, on foreign policy he began to move away from the Soviet Union in 80’s but so is Rajiv Gandhi. There is no visible evidence that he turned more pragmatic or right wing in 80’s out of any conviction. In fact, he didn’t. He was a pragmatist when the circumstances change, he changed  his mind. When confronted with a crisis of enormous magnitude and he was briefed on it on 18 and 19 June 1991, he took half a day to change his mind. He handed over the finance ministry to the international reputed economist, crucially he kept the industry ministry to himself because he realized that the real licence raj was for domestic manufacturers – trade liberalization is the next step. The evidence is clear that a life long socialist change his mind in June 91. What is remarkable about him is once he changed his mind he was able to execute with incredible speed. The joke about Narasimha rao is, when in doubt – pout, analysis until paralysis, but what we forget was here was a man who realize that, “If you want to move right talk left; if you want to actually act, keep quiet – That’s a lesson”. Narasimha Rao realized that in India power is fragmented, there are too many veto players, even a PM with a huge mandate doesn’t really have power. So you should not pretend to have power and make the small pushes here and there that result in large changes.

Ideology has not driven most of our politicians who have been in power, ideology is something that motivates people who are not in power. The moment they acquire power everybody becomes a pragmatist, look at Jyoti Basu in West Bengal, look at Narendra Modi in Delhi, they all become pragmatic and ideology becomes secondary because at the end of the day its about retaining power and the most important thing about power, whether it’s Narasimha rao or any other political leader in India incidentally is that they all want to be seen as Left of the centre even if they’re not. You all want to be seen as pro poor. Look at Narendra Modi, every politician, from Mamta Banerjee to Chandrababu Naidu they all realize that to survive in politics you have to be seen as pro poor. So, ideology is secondary. If you look at the history of Indian economy, ideology or certain presumptions of both politicians and policy makers have played a role. Take for instance, state has huge role to play in various aspects when it comes to allocation, but the puzzle is, it does not change in 91. In 1985, Rajiv Gandhi is one of the most Pro American PM we’ve ever had and he begins to liberalize in 1985, so the currents have changed, the world has moved from the left to the right and anybody in the 80’s knows that the soviet model has failed economically. Even China was turning towards the market but even when ideological shifts happen, politics sometimes doesn’t follow. So someone like Rajiv Gandhi, who wins the largest mandate in Indian history about more than 400, by 1987 hobbled by Bofors corruption crisis and V.P. Singh rebellion; stop being a reformer. So the ideology is moving but the politics is moving the other way. Narasimha Rao’s ability, which is why we call him a pragmatist was that he saw the world moving and he took enormous effort to make sure that politics didn’t stand in the way and I think that is the art of Narasimha rao. Sometimes not doing anything is the greatest service you can do to a Nation.                       

I think the important thing that what happened in 91 was not just that rajiv Gandhi proved incapable of making the kind of shifts that Narasimha Rao did but that in fact the crisis of 1991 was caused by Rajiv Gandhi. Economists documented the kind of events that happened between Oct,1990 and Mar,1991. In those 5-6 months the real crisis was precipitated by the political sinisterism and the short termism and the complete cynical manner in which Rajiv Gandhi moved.

Narasimha Rao’s idol was Deng Xiaoping. So in late 1978-79 Deng Xiaoping begins a revolution in China and remember he was no.2 to the same man he is now trying to boot out, which is Maosim. What Deng begins to do, even as he begins to move pro-market, he says that look I am doing only what Mao would have done had he been alive – which is rubbish. He kept telling bureaucrats that Mao’s photographs are in the Office. Because we are actually right we should be talking and giving the emphasis of Left. In 1980, Narasimha Rao became foreign minister of India and in Narasimha Rao’s archives there is a lovely handwritten note from 1981, in which Narasimha Rao is writing about what he is thinking of Deng who he is viewing from across the border and he say there that Deng’s ability to say one thing and do another reminds me of the old pundits when they were analyzing the Hindu Shastras, it’s not the words that matters it’s the interpretation to the word. If you think about it, in 1991 when Narasimha Rao is pushing through the cabinet, the new industrial policy to end the licence raj, Arjun Singh and all oppose by saying that you’re going against socialism. Do you know what Narasimha Rao does – he asked P Chidambaram and Jairam Ramesh to just put two pages in the beginning of the text, he doesn’t change the policy at all, saying that this is socialism, this is what Nehru would have done, this is what Indira would have done and the policy goes through. Dr. Manmohan Singh told this, after that cabinet meeting Arjun Singh walked up to him smiling and saying, ‘Dr. Singh you have seen things in this industrial policy that we are not able to see, maybe that’s why you have a Phd’. The similarity between the two (Deng Xiaoping and Narasimha Rao) is very strong which is that, look ‘If you are rising in a system you can’t destroy it, you have to pretend to continually while bringing change’.

The most important thing about Narasimha Rao in June 1991 was he did not know how long he would be PM. But he knew that this was a fantastic opportunity for him to make an impact, that anybody who has been a lifelong number two suddenly becomes number one, he wants to go down in industry. Narasimha Rao fast forward a change in order that he would make an impact both on the domestic front and on the foreign front within the first year. One trait that Narasimha Rao had that made him unique was he wasn’t insecure of the talent around him. It’s a very very important quality. It’s not just Manmohan Singh, G.V. Ramakrishna was the head of the capital market, head of SEBI, A.N. Varma principal secretary, as important as Manmohan Singh after Narasimha Rao for reform. Narasimha Rao didn’t knew anything about the economy, so he said, look ‘ I want an economist of talent’. He had no need for sycophants, he had no need for childhood friends, he didn’t operate like that. In fact the former IB chief once said that when he use to work with Narasimha coterie “Narasimha Rao could be quite mean, so he use to constantly abuse this intelligence bureau chief and the IB chief use to tell Narasimha Rao that if you hate me, fire me. Why do you keep me around? Narasimha Rao said,’You don’t understand, I don’t have to like you, I have to respect the talent you have’”, and that’s really something that stands. A team leader needs to select people around him who can perform and keep tabs, not trying to play everything by themselves. I think there’s a key difference.

Narasimha Rao was the first non Gandhi/Nehru PM to do a full term, other like Lal Bahadur Sashtri have become the PM but didn’t complete their tenure. But he had the full five year legacy and have shown how transformative that legacy was. It’s really shocking that the Congress party has completely erased him. On their website they didn’t even mention him. The party deliberately erased him and they constructed an entirely artificial argument that he was responsible for Babri Masjid destruction and that’s completely a false charge against him. The fact is the party is now beginning to realize that something that he did which you need to recognize in order for a new generation to want to be in the Congress party.

Narasimha Rao died in Dec, 2004. The family wanted the body cremated in Delhi, the coterie around Sonia Gandhi didn’t allow that, possibly with instructions from her, because they didn’t want him to be seen as a national leader. Soon after that the body has been taken to Delhi airport and the army stopped the body outside the 24 Akbar road, the Congress headquarters. There is a tradition that past Congress presidents (Narasimha Rao was also a Congress president), the bodies taken into the Congress headquarters so that ordinary workers can pay their respect – that doesn’t happen. The Congress refused to open the gate and Narasimha Rao’s dead body was kept on the pavement, a few days later when the body is cremated in Hyderabad. This is how we have treated a PM who is arguably as consequential as Jawaharlal Nehru. The treatment of Narasimha Rao tells us what the core problem with the Congress is? That, if you have a party, a party that brought us Independence, that is tethered to one family, if the political future of India’s greatest party is dependent on whether Priyanka will join politics or not, that party is doomed. It’s not ideological, it’s not about economic reforms, it’s about not having any other Congress leader who threaten someone not born a Nehru/Gandhi and that’s the problem and the solution lies right within.

There’s a very interesting lesson for the Congress party to learn today from what happened between 1984-94 because the decline of the Congress begins after 1984 and in 1989 the Congress was virtually wiped out from the Northern India. The rise of the BJP begins then. In 1991, Narasimha Rao was the first PM after 20 years to conduct party elections. So the first thing the Congress can do today is to start the organizational elections at the state level. The second lesson we learnt is that Narasimha Rao understand that real power in the Congress party is at the provincial level, it’s within state leaders. The state level leadership was extremely powerful at that time, in fact that’s one of the things about the Congress party right through the Indira Nehru period that they were still state level leader. Today where are the state level leaders? Let’s say from Rajasthan they are all fighting with each other – Gehlot, C.P. Joshi and Pilot, we go to Madhya Pradesh there are four of them fighting with each other, in Andhra Pradesh and Telangana the party has disappeared, in Tamil Nadu it does not exist, in kerala they are fighting. In states where they are in power they don’t think about delhi, they sees themselves as a regional leader. So, the need for the congress party to really revive at the state level is the fundamental requirement.

Disclaimer: This article is a reproduction of a panel discussion between Vinay Sitapati and Sanjaya Baru. Views expressed in this article is their own.
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