The sudden death of Lal Bahadur Shastri wrought havoc with the ruling party. The Congress had still a comfortable majority in the Lok Sabha, but it was riven in the middle. The partyís internal structure had come under the control of a group of strong state-level politicians who were informally described as the Syndicate. It came to its own after Jawaharlal Nehruís death, or rather even as Nehruís influence began taking a plunge following the China disaster. Shastriís death provided an opportunity to those who disliked the Syndicate to come back strongly. They succeeded in installing Indira Gandhi, Nehruís daughter, as the new prime minister in a fiercely contested vote in the Congress Parliamentary Party. That however also meant the beginning of the end of the Congress as it had emerged after Independence. The old gang that constituted the Syndicate refused to take its defeat lying down; it kept waiting for an opportunity to bounce back. New Delhi became the hub of intense political infighting.
Indira Gandhi initially behaved like a political novice. Not at all sure of what kind of framework and administrative stance would strengthen her position, she gave her ear to all and sundry. There were major crop failures in the country in both 1965 and 1966. Prices soared; the balance of payments position was precarious. Indira was advised by senior civil servants, particularly those in the ministry of finance ó I.G. Patel was one of them ó to put all her eggs in the American basket. While the green revolution pioneered by the Americans would take care of farm growth in the long run, the immediate problems, Indira was assured, could be resolved if she went for devaluation of the rupee, which would instantly discourage imports and improve exports, thereby improving the balance of payments, besides persuading the World Bank and the International Monetary Fund, along with the American government, to consider generous flow of assistance to India. Indira Gandhi listened to them, agreed to devalue and had the shock of her life. None of the expectations and assurances came to fruition. In fact, devaluation gave a further boost to the inflationary forces.
In the Lok Sabha elections in 1967, the Congress just squeaked through. The members of the Syndicate started licking their lips. Indira Gandhi, they were sure, could not survive beyond a further few weeks. In her predicament, Indira suddenly remembered P.N. Haksar, the friend of her husband, Feroze Gandhi, from the Allahabad days, whom Nehru had inducted into the foreign service. Haksar, who was close to the Nehrus, was vegetating as deputy high commissioner in London, already sending some of his suggestions to friends in Delhi that were being followed up. Soon, the official summons of Indira Gandhi reached Haksar, who lost no time to arrive in New Delhi to be formally named secretary to the prime minister and head of the prime ministerís office.
A new phase was initiated in New Delhi and the countryís affairs. The self-styled progressives, who had made themselves scarce during the past few years, began to re-emerge. Indira Gandhi knew that the Syndicate was determined not to let go of the existing opportunity to oust her and would put all obstacles in her way; she would need outside support to survive as prime minister. Given his old connections, it was easy for Haksar to extract communications from the Left parties to stand by her should the need arise. Haksar was assured that in the event of the Syndicate walking out on Indira, she could continue as prime minister with votes from the Left. Haksar at the same time thought of another ploy to retain control over administration. He would place loyal friends in charge of the crucial ministries; once he succeeded in doing that, the civil service in general was bound to take the cue. The governmentís most immediate concern, though, called for a number of urgent measures, which would ameliorate the sufferings of the common people.
Individual ministries, he was convinced, needed greater surveillance from the prime ministerís office. His first target was the ministry of finance, which, he thought, took instructions more from Washington, DC, than from the prime ministerís office. He planned to proceed step by step. As was only to be expected, these initiatives on Haksarís part created a fissure, in particular among the top-most civil servants. I too got trapped in these goings-on in New Delhi. Disciplining food prices and reaching food to the poor people were major priorities in the given situation. The decision was taken to name K.T. Chandy as chairman of the newly established Food Corporation of India and to invite me to preside over the Agricultural Prices Commission. I would set the procurement prices for important foodgrains, and Chandy would procure the grains at those prices from the different states and thereby lay the foundation of a universal public distribution system. I discussed the matter with party leaders in Calcutta, who were delighted about it. I remember Hare Krishna Konar was the most enthusiastic among them; he thought it was a great opportunity to enter the citadel of the power circle in New Delhi.
It was both fun and frustration for me in the APC. I learnt a great deal about the problems afflicting the different regions of the country. I also grew wise about the quantum of greed, on the part of the rich farmers, and the knowledge I acquired of the plight of the small peasants and landless farm-workers made me aware of how cruel class-exploitation could be. I was enjoying myself at the Commission and completed four years there. At this point, I got a telephone call from Haksar. In the mock-caustic manner he used when conversing with me, he informed me that I had done enough harm to Indian agriculture. And the time had come to spread my malign influence to broader spheres. With the intention of penetrating the conservative inner core of the ministry of finance, he had persuaded Indira Gandhi ó who had, after ejecting Morarji Desai, was herself holding direct charge of the ministry ó to approve my appointment as chief economic adviser in the ministry.
I.G. had, meanwhile, become secretary in the department of economic affairs in the ministry. Ever since the debacle of devaluation, Indira Gandhi lost trust in him even though the ordinary civilities were maintained. I.G. disliked Haksar and his ways, a feeling Haksar returned with alacrity. I suspect he found immense pleasure in the fact that I.G. had to draft the cabinet note recommending the nationalization of the 14 major commercial banks in mid-1969, the contents of which were against his convictions.
Haksar proceeded further. He carved a new department of banking, which even though still formally a part of the ministry of finance, was detached from the department of economic affairs with a separate secretary in charge. Haksar also installed his close friend from London days, Ardhendu Baksi, to be secretary of the new department. Almost simultaneously, there was that other Ďrevolutionaryí measure: annulment of the privy purses.
Indira Gandhiís popularity zoomed. The split in the Congress was formalized when she decided to put up her own candidate, V.V. Giri, for election as president of the country against the candidate chosen by the Syndicate, N. Sanjeeva Reddy. Indiraís mass appeal at that phase demolished Reddy. Indira now looked forward to holding an early Lok Sabha election in which, she and Haksar were confident, she would have a sweeping victory.
Haksar, I can say with conviction, had no personal ambition in strengthening the prime ministerís office and enlarging its extent of influence. He had, however, a personal political philosophy. The Left parties, in his view, would not ever be able to attain the credibility of the Indian masses across the entire country. The Congress, even after the purge and split, continued to be a ramshackle outfit, quite incapable of having either the vision or the capability to effect the thoroughgoing economic and social reforms that were called for in the country. Which is why, he thought, whatever reforms were essential for the good of the country needed to be shouldered by the prime ministerís office. His views were perhaps well-meaning, but extremely naÔve, as he would soon learn in a very few yearsí time.
On retirement from all public activities, I.G. wrote a kind of memoir, describing his life as a national and international civil servant. It is generally drab reading, bearing no trace of the brilliance of his mind. There is, though, a rare bit of humour, which I enjoyed thoroughly even though I was the butt of it. When it got known in the ministry of finance in early 1970 that I was joining as chief economic adviser, there were, I.G. says, long faces in the ministry, god alone knew what havoc this Lefty, Ashok Mitra, was going to do to the ministry. I.G. assured them that they should not worry, I was his very good friend, he knew my track record, I would not last long.
I.G. was right, but, not in vindication of his premise. By early 1972, Indira had won a smashing victory in the Lok Sabha polls the previous year on the basis of the ďGaribi HataoĒ agenda of Haksar. He had also crafted the strategy, and had presided over working out the details of the moves and manoeuvres that ensured Indiaís amazing triumph in the Bangladesh War, leading to Atal Bihari Vajpayee addressing her as Goddess Bhagavati. Indira Gandhi, therefore, had no further need for the Left, nor for Haksarís vision of ushering in a grand social revolution in the country through the intermediary of the prime ministerís office. She was increasingly leaning on the advice of her younger son, who had his own reason to hate Haksar. I had an inkling of what was happening and put in my papers in April, 1972. Haksar himself was soon shunted off to the sinecure position of deputy chairman of the Planning Commission. The Ďprogressiveí phase of Indira Gandhiís tenure as prime minister was over, the ministry of finance could again breathe easily. But only for a few brief months. Even those arch conservative species in the ministry could not imagine how dangerous the consequences of Haksarís departure were going to be.
Indira Gandhi, as instructed by her younger son, began to behave like an imperious dictator. The mandate she received in 1972, she assumed, permitted her to do whatever she liked with the countryís administration, including its finances. Governance became the other name for arbitrariness. She began collecting money altogether recklessly from business and industrial groups and accorded them wild fiscal concessions. She installed persons chosen by her son in key positions in the different banks, and the integrity of the nationís monetary system was severely damaged. The climax was reached during the Emergency, when a financial upstart with zero credentials was appointed the governor of the Reserve Bank of India. Prices kept rising. The prime minister could not care less. Protest movements, such as the one led by Jayaprakash Narayan, were suppressed with great ferocity. Things continued in this manner until the Allahabad High Court judgement debarring her from membership of Parliament for five years.
Her response was the Emergency. Its horror generated a kind of mute understanding across the political spectrum stretching from Left to Right. She lost decisively in the 1977 polls, which she had called in the false belief that the people had been cowed down forever. Unfortunately, the euphoria generated by the belief that she was gone forever took its toll. The disparate elements constituting the Janata Party kept squabbling among themselves which finally led to the collapse both of the government it had formed as well as of the party itself. The performance during the few years the Janata Party leaders were in charge in New Delhi was so disappointingly inept that the voters, forgetting the trauma of the Emergency, reinstalled Indira Gandhi as prime minister in 1980; she was gone for only three years.