When persons, either eminent or formerly eminent, pass on, one of the mute conventions of civilized society is to make laudatory references to their achievements in life. It is therefore entirely in order that Pamulaparthy Venkata Narasimha Rao should receive rich posthumous tributes. A doubt keeps nagging though. Should such tributes obfuscate facts' While writing effusive obituary notes on departed personages, must we step back from exploring the different layers of truth'
In editorial declamations, Rao has been hailed as the architect of globalization and economic liberalization. The statement is right only in the narrow formal sense: July 1991, the first month of Rao's prime ministerial tenure, was when his finance minister announced, in scampering hurry, the major departures in Indian economic policy. But was not that happening as an inevitable consequence of events Rajiv Gandhi set in motion during his years as the nation's prime minister' Hardly any scope for illusion here: globalization was not a conscious decision reached by India's ruling set egged on by Narasimha Rao. It was the outcome of Rajiv Gandhi's endeavours in the period between the two Lok Sabha polls in early 1985 and in 1989. He had received a thundering mandate in the elections following his mother's assassination.
The magnitude of that success helped him to make up his mind: he was going to overhaul, lock, stock and barrel, the country's moribund economic structure and modernize. Rush, Rush, Rush: the country must import loads and loads of new capital goods from overseas; it must import state of the art technology on the widest possible front; it must import the smartest foreign expertise. And why stop there, import of luxury consumer goods, hitherto taboo, must also be encouraged, so that the entrepreneurial class has the incentive to raise the level of activities. In the course of his tenure, imports accordingly soared from 5 per cent of gross domestic product to roughly 9 per cent.
But export remained sluggish at 5 per cent. The trade gap had to be covered. The country's foreign exchange reserves were hardly adequate for the purpose. Rajiv Gandhi was advised to, never mind, go for borrowings in the international money market: after all, India's credit rating was excellent at that juncture. No sooner advised than done. As a result, between end March 1985 and end March 1989, the country's external indebtedness increased one-and-a-half times. Were the loans contracted long-term in nature, there would have been nothing much to worry about. Rajiv Gandhi, however, largely went for short-term private commercial credit, with maturity of three to five years. The loan-givers came hollering by the early Nineties: they must have their money back.
Indira Gandhi's senior son wanted to change, thoroughly, the country's economic system he inherited from the mother. He succeeded, he ushered in the era of foreign goodies flooding the nooks and corners of this huge country. By doing so, he however was also instrumental in creating a balance of payments crisis of a frightening scale. The two regimes which succeeded his, were caught napping. The mounting debt burden swiftly eroded the country's creditworthiness overseas. Simultaneously, the foreign exchange reserves started to go down, down, down: from $ 6 billion, at end-1985, it was down to $1 billion as the fiscal year 1990-91 closed. On the day Narasimha Rao was sworn in as the country's new prime minister, foreign exchange still in the till could barely cover ten days' imports.
The politicians were busy putting together a government. They were, besides, putty clay. The top brass of the financial bureaucracy did not wait for the new ministry to be formed at the Centre. It consulted its counterparts in the foreign service. They had made up their minds. Politicians would play politics, but the country's economic viability, which, according to their lights, was co-terminous with external creditworthiness, had to be salvaged. The Cabots in New Delhi talked to the Lodges in Mumbai; they got together and sent frantic messages to the sovereign lords in Washington DC. The deed of surrender, otherwise known as the Structural Adjustment Programme, was finalized and kept ready for the new government to sign.
P.V. Narasimha Rao's government was formally responsible for the cataclysmic cross-over. But render unto Caesar what belongs to Caesar. Praise Narasimha Rao for being the obedient servant of the emerging situation, but accord due credit to Rajiv Gandhi, if the latter did not fritter away the country's exchange reserves in the manner he did and alongside incur huge short-term foreign debt, globalization and liberalization would have still remained an unfinished agenda ' at least for some more while. Rajiv Gandhi dared to be irresponsible; Narasimha Rao merely reaped the harvest of that irresponsibility.
There is a further misplacement of credit in the obituary note. Narasimha Rao did not pick his finance minister to implement the Washington-directed reforms. The selection was made by the bosses in Washington, DC, and their first choice was not the country's present prime minister but another bureaucrat economist, who, in the view of the gods presiding over the Washington Consensus, was the most appropriate person to carry out the Structural Adjustment Programme in India. This person however declined the invitation to be finance minister. The Washington Consensus then decided on the second name in their list; he, sworn in along with Narasimha Rao, rushed to the North Block premises to give final touches to the surrender document. The rest is history.
Such are the quirks of history. And these quirks could take charge only because the Congress, through another mishap of history, emerged as the surprise first party in the June 1991 Lok Sabha poll. That poll was organized in two halves. The first half of the poll was held in the earlier part of the month, before Rajiv Gandhi was assassinated; the second half was pre-scheduled on a date which followed the assassination. The Congress fared poorly in the first half of the elections, but reaped the advantage of the sympathy vote in the second half and won handsomely. It did not exactly get an overall majority in the Lok Sabha. But once the president, quite correctly, called in the major party to try to form the government, it was easy-going. Had the Liberation Tigers of Tamil Eelam chosen a later day to bump off its principal b'te noire, or if the attempt to kill him had failed, the political and economic history of India would perhaps have been somewhat different over the past decade-and-a-half. The Congress might not have turned out as the first party. At least Narasimha Rao would have been nowhere in the picture.
Does that mean poor Rao had no outstanding achievement he could claim as very much his own' It may sound harsh, but there is one happening history will exclusively credit him for: he was the prime minister who slept through, peacefully, the entire afternoon even as the Babri Masjid was being demolished on December 6, 1992. On the other hand, it is possible to argue that even such gathering of glory through passivity would not have come Rao's way if Rajiv Gandhi had not chosen to de-lock the portals of the mosque seven years earlier.
Whichever way one looks, P.V. Narasimha Rao will remain a tragic figure in history; his eminence, it would seem, always owed something to the absentmindedness of others.