1991: How P. V. Narasimha Rao Made History

by Sanjaya Baru

Nehruvianism, so to speak, was represented by three pillars: self-reliance, a mixed economy and non-alignment.

While Nehruvians defined this combination of socialism and capitalism as a ‘mixed economy’, Marxist critics dubbed it ‘state capitalism’ and free market critics labelled it ‘bureaucratic socialism’.

It is because successive governments in the 1980s chose to abdicate their responsibility to the nation for the sake of short-term partisan political gains and indeed out of sheer political cynicism.

Twenty metric tonnes of confiscated gold, worth US$200 million, held in its vaults was made available by the RBI to the State Bank of India for sale, with a repurchase option, to the Union Bank of Switzerland.

PV became famous for the statement attributed to him: ‘Not taking a decision is also a decision’.

Creative tension among subordinate officials is what smart political bosses prefer.

Sir, I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said, ‘no power on earth can stop an idea whose time has come.’ I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome.

Here is something that Rajiv Gandhi forgot to do as Prime Minister. He talked about taking India into the 21st century but forgot all about the present one and the opposition it may have to the future. P V Narasimha Rao and his finance minister Manmohan Singh got it just right. On the one hand, they sang praises about Nehruvian socialism. On the other hand, they took the country by the scruff of the neck and said move, or we all die.

The challenge was not in making announcements and implementing their recommendations. It was in creating the political climate in which they could get implemented.’

Expectations shape outcomes in a world of uncertainty. Expectations about the economy end up being self-fulfilling prophecies. If you expect tomorrow to be better than today, you take economic decisions that ensure that tomorrow is indeed better. If, on the other hand, one believes the future to be bleaker than the present, one ends up taking decisions and making choices that contribute to a less than satisfactory outcome.

‘A finance minister is like the numeral zero. Its power depends on the number you place in front of it. The success of a finance minister depends on the support of the prime minister.’

We reject nothing useful for its plainness, we take nothing irrelevant for its dazzle.’