P. V. Narasimha Rao

From New World Encyclopedia

Pamulaparthi Venkata Narasimha Rao
P. V. Narasimha Rao

10th Prime Minister of India
In office
June 21, 1991 – May 16, 1996
Preceded by Chandra Shekhar
Succeeded by Atal Bihari Vajpayee

Born June 28, 1921
Karimnagar, Andra Pradesh, India
Died December 23, 2004
New Delhi, India
Constituency Nandyal, Andhra Pradesh
Political party Congress(I)
Occupation Lawyer, Activist
Religion Hindu

Pamulaparthi Venkata Narasimha Rao (Telugu: పాములపర్తి వెంకట నరసింహారావు) (June 28, 1921 – December 23, 2004) presided as the twelfth Prime Minister of the Republic of India.[1] He led one of the most important administrations in India's modern history, overseeing a major economic transformation and several incidents affecting national security. [2] Rao, also called Father of Indian Economic Reforms,[3] launched India's free market reforms that brought the nearly bankrupt nation back from the edge.[4] He had been commonly referred to as the Chanakya of modern India for his ability to steer tough economic and political legislation through the parliament at a time when he headed a minority government.[5][6]

Rao's term as Prime Minister proved an eventful one in India's history. Besides marking a paradigm shift from the socialist based Nehruvian style of economy to a market driven one, his years as Prime Minister also saw the emergence of the BJP, a major right wing party, as an alternative to Rao's Congress, which had been governing India for most of its post-independence history. Rao's term also oversaw the destruction of the Babri Mosque in Ayodhya which triggered one of the worst Hindu Muslim riots in the country since its independence.

Political isolation, due to his association with corruption charges, marked Rao's later life. Before his death in 2004, Rao had been acquitted on all charges. He died after a heart attack in New Delhi, his remains cremated in Hyderabad.[7]

Early life

P. V. Ranga Rao, Rao's father, belonged to a wealthy Telugu Brahmin family from a village called Vangara (pedda) in the Karimnagar district of Andhra Pradesh, India.[8]

Rao studied at the Osmania University and at the Universities of Mumbai and Nagpur where he obtained Bachelor's and Master's degrees in law.[9] A polyglot, he could speak 13 languages including Urdu, Marathi, Kannada, Hindi, Telugu and English with a fluency akin to a native speaker.[10] His mother tongue had been Telugu. As well as seven Indian languages, he spoke English, French, Arabic, Spanish and Persian.[11] Along with his cousin Pamulaparthi Sadasiva Rao, Rao edited a Telugu weekly magazine called Kakatiya Patrika from 1948 to 1955.

A freedom fighter, Rao had been active during the Indian Independence movement and joined full time politics after independence as a member of the Indian National Congress. Rao served brief stints in the cabinet (1962-1971) and as chief minister of the state of Andhra Pradesh (1971-1973).

Ascent to prime minister

When the Indian National Congress split in 1969, Rao remained loyal to Prime Minister Indira Gandhi and stayed so during the Emergency period (1975 - 1977). He rose to national prominence in 1972 by handling several diverse portfolios, most significantly Home, Defence and Foreign Affairs (1980-1984), in the cabinets of both Indira Gandhi and Rajiv Gandhi. Speculation ran high that he had been considered for the post of India's President along with Zail Singh in 1982.[12]

Rao came close to retiring from politics in 1991, the assassination of the Congress President Rajiv Gandhi prompting him to make a comeback.[13] As the Congress had received the largest number of seats in the 1991 elections, he had the opportunity to head the minority government as Prime Minister. He had been the first person outside the Nehru-Gandhi family to serve as Prime Minister for five continuous years, the first to hail from South India and so the first from the state of Andhra Pradesh.[14] Since Rao ran uncontested the general elections, he now participated in a bye-election to join the parliament. He won election from Nandyal with a victory margin of a record 5 lakh votes, the Guinness Book Of World Records recording his win. [15][16] His cabinet included Sharad Pawar, himself a strong contender for the PM's job, as defence minister. He also broke convention by appointing an economist, Manmohan Singh as his finance minister. (Earlier only politicians had occupied that post.)


Economic reforms

See also: Licence Raj
Manmohan Singh who chiefly spearheaded Rao's economic reforms.

Most Indians consider Rao's major achievement the liberalization of the Indian economy, launching of India's emergence as a great power. His reforms had been adopted to avert impending international default in 1991.[17] The reforms progressed furthest in the areas of opening up to foreign investment, reforming capital markets, deregulating domestic business, and reforming the trade regime. Rao set the goals to reduce the fiscal deficit, privatize the public sector, and increase investment in infrastructure. He led trade reform and changes in the regulation of foreign direct investment to open India to foreign trade while stabilizing external loans. Rao's finance minister, Manmohan Singh, a trained economist, played a central role in implementing those reforms.

Major reforms in India's capital markets led to an influx of foreign portfolio investment. The major economic policies adopted by Rao include:

  • Abolishing in 1992 the Controller of Capital Issues which decided the prices and number of shares that firms could issue.[18][19]
  • Introducing the SEBI Act of 1992 and the Security Laws (Amendment) which gave SEBI the legal authority to register and regulate all security market intermediaries.[20]
  • Opening in 1992 of India's equity markets to investment by foreign institutional investors and permitting Indian firms to raise capital on international markets by issuing Global Depository Receipts (GDRs).[21]
  • Starting in 1994 of the National Stock Exchange as a computer-based trading system which served as an instrument to leverage reform of India's other stock exchanges. The NSE emerged as India's largest exchange by 1996.[22]
  • Reducing tariffs from an average of 85 percent to 25 percent, and rolling back quantitative controls. (The rupee became convertible on trade account.)[23]
  • Encouraging foreign direct investment by increasing the maximum shares of foreign capital in joint ventures from 40 to 51 percent with 100 percent foreign equity permitted in priority sectors.[24]
  • Streamlining procedures for FDI approvals, and in at least thirty five industries, automatically approving projects within the limits for foreign participation.[25]

The impact of those reforms led to the total foreign investment (including foreign direct investment, portfolio investment, and investment raised on international capital markets) in India growing from a minuscule US $132 million in 1991-92 to $5.3 billion in 1995-96.[26]

Rao began industrial policy reforms with the manufacturing sector. He slashed industrial licensing, leaving only eighteen industries subject to licensing. Industrial regulation rationalized.[27]

National security, foreign policy and crisis management

Rao energized the national nuclear security and ballistic missiles program, which ultimately resulted in the 1998 Pokhran nuclear tests. Some have speculated that the tests had been planned in 1995, during Rao's term in office.[28] He increased military spending, and set the Indian Army on course to fight the emerging threat of terrorism and insurgencies, as well as Pakistan and China's nuclear potentials. During his term, terrorism in the Indian state of Punjab finally ended.[29] Scenarios of plane hijackings, which occurred during Rao's time ended without the government conceding the terrorists' demands.[30] He directed negotiations to secure the release of Doraiswamy, an Indian Oil executive, from Kashmiri terrorists who kidnapped him,[31] and Liviu Radu, a Romanian diplomat posted in New Delhi in October 1991, kidnapped by Sikh terrorists.[32] Rao also handled the Indian response to the occupation of the Hazratbal holy shrine in Jammu and Kashmir by Pakistan-sponsored terrorists in October 1993.[33] He brought the occupation to an end without damage to the shrine. Similarly, he dealt with the kidnapping of some foreign tourists by a terrorist group called Al Faran in Kashmir in 1995 effectively. Although he failed to secure the release of the hostages, his policies ensured that the terrorists demands went unmet, and that the international community, even Pakistan, condemned the action. [34]

Rao also made diplomatic overtures to Western Europe, the United States, and China. He decided in 1992 to bring into the open India's relations with Israel, which had been kept secret since first established under Indira Gandhi's orders in 1969 and permitted Israel to open an embassy in New Delhi.[35] He ordered the intelligence community in 1992 to start a systematic drive to draw the international community's attention to alleged Pakistan's sponsorship of terrorism against India and to thwart United States' efforts to undermine the exercise. [36][37] Rao launched the Look East foreign policy, which brought India closer to ASEAN.[38] He decided to maintain a distance from the Dalai Lama to avoid aggravating Beijing's suspicions and concerns, and made successful overtures to Teheran. He vigorously promoted the 'cultivate Iran' policy.[39] Those policies paid rich dividends in March 1994, when Benazir Bhutto's efforts to have a resolution passed by the UN Human Rights Commission in Geneva on the human rights situation in Jammu and Kashmir failed, with opposition by China and Iran.[40]

Rao's crisis management after the Mumbai blasts of March 12, 1993 received high praise. He personally visited Mumbai after the blasts and after seeing evidence of Pakistani involvement in the blasts, ordered the intelligence community to invite the intelligence agencies of the United States, United Kingdom and other West European countries to send their counter-terrorism experts to Mumbai to see things for themselves. He felt that if they became convinced about the Pakistani role, they would at least tell their leaders even if they maintained silence with India.[41]

Challenges faced in office

Economic crisis and initiation of liberaralization

Rao decided that India, which in 1991 stood on the brink of bankruptcy, would benefit from liberalizing its economy. He appointed an economist, Dr. Manmohan Singh, a former governor of the Reserve Bank of India, as Finance Minister to accomplish his goals. Many socialist nationalists criticized that liberalization at that time.[42]


The Himalayan state of Jammu and Kashmir faced increased terrorist activity during Rao's tenure. His government claimed that training camps in Pakistan administered Kashmir for those terrorists, previously directed at evicting the Soviet army from Afghanistan, now graduated the fighters to infiltrate Kashmir.[43] He directly charged Pakistan with sheltering, arming and supplying infiltrators. During that time Hindu pilgrims and Sikh settlers suffered attacks, and hundreds of thousands of Kashmiri Pandits left their homes in the Kashmir valley in the climate of danger. [44] Violence rocked and shut down parts of Kashmir, which depended heavily on tourism, and also struck major cities like Delhi and Mumbai.[45][46] Similar terrorism spread into the northeastern states of Assam,[47] Tripura[48] and Nagaland.[49]

Rao's government introduced the Terrorist and Disruptive Activities (Prevention) Act (TADA),[50] India's first anti-terrorism legislation, and directed the Indian Army to eliminate the infiltrators.[51] Despite a heavy and largely successful Army campaign, the state descended into a security nightmare. With tourism and commerce largely disrupted, people began living in fear of the terrorists. Special police units had been accused of committing atrocities against prisoners often, including torture and unnecessary detention.[52] Although Rao received criticism, the state remained relatively secure and finally made to a return to democracy in 1996.[53]

Religious strife and the Latur earthquake

Babri Masjid, a pre-1992 view.

Members of the VHP demolished the Babri Mosque in Ayodhya on 6 December 1992.[54] Many Indians believe the site the birthplace of Sri Rama, on which India's first Mughal emperor, Babar allegedly destroyed an existing Hindu temple in the early 16th century. The destruction of the disputed structure, widely reported in the international media, unleashed large scale communal violence, the most extensive since the Partition of India. Muslim and Hindu fundamentalists indulged in massive rioting across the country, and almost every major city including Delhi, Mumbai, Kolkata, Ahmedabad, Hyderabad, Bhopal, and Chennai struggled to control rampaging mobs. Many believed that the 1993 Mumbai Bombings, which claimed hundreds of innocent lives and left thousands injured, represented the Muslim underworld's retaliation for the demolition of the Babri Mosque.

A strong earthquake in Latur, Maharashtra, also killed 10,000 people and displaced hundreds of thousands in 1993.[55]  Many applauded Rao for using modern technology and resources to organize major relief operations to assuage the stricken people, and for schemes of economic reconstruction.


Accusations of direct and indirect corruption proved the most negative aspect of Rao's rule, though found guilty on none of the charges. Many viewed the charges as fueled by rivals in his party opposed to his return as a major player. Some of the more prominent examples include:

JMM bribery scandal

In July 1993, Rao's government faced a no-confidence motion, because the opposition predicted they lacked sufficient numbers to prove a majority. Allegedly Rao, through a representative, offered millions of rupees to members of the Jharkhand Mukti Morcha (JMM), and possibly a breakaway faction of the Janata Dal, to vote for him during the confidence motion. Shailendra Mahato, one of those members who had accepted the bribe, turned approver. In 1996, after Rao's term in office had expired, investigations began in earnest in the case.

In 2000, after years of legal proceedings, a special court convicted Rao and his colleague, Buta Singh (alleged to have escorted the MPs to the Prime Minister).[56] Rao appealed to a higher court and remained free on bail. The decision overturned mainly on the doubt in credibility of Mahato's statements (which had been extremely inconsistent) and both Rao and Buta Singh stood cleared of the charges in 2002.[57]

Saint Kitts forgery scandal

Rao, along with fellow minister K.K. Tewary, Chandraswami and K.N. Aggarwal had been accused of forging documents showing that Ajeya Singh had opened a bank account in the First Trust Corporation Bank in Saint Kitts and deposited $21 million in it, making his father V.P. Singh its beneficiary with the intent to tarnish V.P. Singh's image. That allegedly happened in 1989. The CBI waited until after Rao's term as PM had expired in 1996 to formally charge him for the crime. Less then a year later, the court acquitted him due to lack of evidence linking him with the case.[58] All other accused, Chandraswami being the last, also eventually had charges dropped.

Lakhubhai Pathak cheating scandal

Lakhubhai Pathak, an Indian businessman living in England alleged that Chandraswami and K.N. Aggarwal alias Mamaji, along with Mr. Rao, cheated him out of $100,000.00. The amount was given for an express promise for allowing supplies of paper pulp in India, and Pathak alleged that he spent an additional $30,000.00 entertaining Chandraswami and his secretary. Rao and Chandraswami were acquitted of the charges in 2003,[59] due to lack of evidence. Despite this, it remained a large black mark on Rao's administration.

Later life and Legacy

In the 1996 general elections Rao's Congress Party suffered resounding defeat, forcing him to step down as Prime Minister. He retained the leadership of the Congress party until late 1996 when replaced by Sitaram Kesri. According to Congress insiders who spoke with the media, Rao had kept an authoritarian stance on both the party and his government, which led to the departure of numerous prominent and ambitious Congress leaders during his reign. Some of them included: Narayan Dutt Tiwari, Arjun Singh, Madhavrao Scindia, Mamata Banerjee, G.K. Moopanar and P.Chidambaram.

Rao rarely spoke of his personal views and opinions during his 5-year tenure. After his retirement from national politics Rao published a novel called The Insider (ISBN 0670878502). The controversial book, which follows a man’s rise through the ranks of Indian politics, resembled events from Rao’s own life. (See Gonzo journalism.) Rao, however denied any connection.

Rao, suffering a heart attack on 9 December 2004, died at All India Institute of Medical Sciences fourteen days later at the age of 83. Cremated with full state honors, Rao's body had been kept in state at the Jubilee Hall in Hyderabad. The incumbent Prime Minister Manmohan Singh, former Prime Minister H. D. Deve Gowda, the incumbent BJP president L.K. Advani, the Defence Minister Pranab Mukherjee, the Finance Minister P. Chidambaram and many other dignitaries attended his funeral.[60]

Narasimha Rao quotes

  • "When I don't make a decision, it's not that I don't think about it. I think about it and make a decision not to make a decision."
  • "Inaction is also an action."
  • "Law will take its own course of action."
  • "Time itself is the solution to all problems."


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  53. Meredith Weiss.
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Preceded by:
Kasu Brahmananda Reddy
Chief Minister of Andhra Pradesh
30 September 1971–10 January1973
Succeeded by:
Jalagam Vengala Rao
Preceded by:
Shyam Nandan Prasad Mishra
Minister for External Affairs of India
14 Jan 1980–19 July1984
Succeeded by:
Indira Gandhi
Preceded by:
Rajiv Gandhi
Minister for External Affairs of India
25 June 1988–2 Dec1989
Succeeded by:
V P Singh
Preceded by:
Madhavsinh Solanki
Minister for External Affairs of India
31 Mar 1992–18 Jan1993
Succeeded by:
Dinesh Singh


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