The Hindu Business Line : Father of reforms

THE MANAGEMENT expert will style Pamulaparti Venkata Narasimha Rao as the only Prime Minister of India who thought out of the box. Indeed, starting 1991, the grand old man quickly dumped boxes of government files into the bin, and in his refreshingly quiet manner returned the development initiative to whom it belonged — every free man and woman of the country. Those who watched the country in the crisis years of 1991 and 1992 often pinched themselves, wondering if indeed the `unboxing' of the economy was happening. It was and with it the terms of economic debate were reset forever.

Economic reform had come to stay. Subsequent governments may have slowed its pace but could never stop it. At no point of time did Mr Rao spell out the rationale behind his firm policy initiative, as perhaps the busy chief executive had no spare time after beseeching the West for dollars to keep alive the economy. To keep the lonely watch, he picked Dr Manmohan Singh for company. Under Mr Rao industrial licensing and controls went; the phobia against foreign investment disappeared as the Indian economy started to purr softly after 1993; the financial system was freed with banks allowed to decide on the quantum of advances and their price; the public sector was made to perform. The worst financial crisis did not allow for white papers on policy and this in a way proved helpful as Dr Manmohan Singh got the nod to present some of the best Budgets which trimmed the tax load. There are critics who think the policy switch was conditional upon the IMF loan which the Rao government negotiated. Every lender sets a price but Mr Rao's bold moves paid off: the economy not only cleared the loan but has reserves today of about $130 billion.

Till 1991 every product commanded a premium, as supplies never matched demand with official limits on production; today most products are available off-the-shelf. It is hard to believe that in 1991 to buy just a kilogramme of cement one had to get a permit and pay a premium. To make a phone call was a luxury. But Mr Rao and Dr Manmohan Singh changed all that. The Harshad Mehta scam and the Babri Masjid demolition smudged Mr Rao's reign; the Finance Ministry and the Reserve Bank of India slipped in the first, while Mr Rao could not fathom the minds of those who tore down the mosque. As the economy improved to turn out one of its best performance in 1994, Mr Rao and Dr Manmohan Singh started going easy as snipers got into the act taking pot-shots at the reforms. The crisis had blown over and with it the urgency to get on with reforms. In those times other than the Nehru family no politician could think of remaining the Prime Minister for five years but Mr Rao broke the rule. Most of the time he ran a minority government with wile and guile learnt over the years as a Congressman from Andhra Pradesh. When he took charge, political analysts gave him six months only to turn carping critics when he lasted the full term. Today, (courtesy Pablo Neruda) when Mr Rao is wheeling with the stars it can be said he let many Indian hearts break loose with the wind.

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