Born in a small village near Karimnagar (now in Telangana), PV Narasimha Rao or Pamulaparti Venkata Narasimha Rao was Prime Minister of India between 1991 and 1996. He is best known for introducing sweeping economic reforms that liberalized the Indian economy.

After the assassination of Congress leader Rajiv Gandhi in May 1991, the Congress Party (I) chose Rao as their leader at the age of 70, and he became India’s 10th prime minister after the general elections in June. Before becoming Prime Minister of India, Rao represented Andhra Pradesh at Lok Sabha. He was also Minister of Foreign Affairs and Interior under Rajiv Gandhi.

Narasimha Rao, along with his finance minister Manmohan Singh, is tasked with leading India through a time of turmoil and lifting the country out of economic obscurity.

National security, foreign policy and crisis management:

  • Rao energized the national nuclear security and ballistic missile program, which ultimately resulted in the Pokhran nuclear tests in 1998.

  • He increased military spending and put the Indian military on track to tackle the emerging threat of terrorism and insurgencies, as well as the nuclear potential of Pakistan and China.

  • It was during his tenure that Khalistani terrorism in the Indian state of Punjab was finally defeated.

  • Rao also made diplomatic overtures to Western Europe, the United States and China. He decided in 1992 to open India’s relations with Israel, which had been secretly active for some years during his tenure as foreign minister, and allowed Israel to open an embassy in New Delhi.

  • Rao’s handling of the crisis after the Bombay attacks of March 12, 1993 was greatly appreciated for his personal involvement in the affair which led to Pakistani involvement in the explosions.

Major economic reforms led by Narasimha Rao which led to an influx of foreign investment in Indian markets:

  • Presentation of the SEBI law of 1992 and the security laws (amendment) which gave SEBI the legal authority to register and regulate all intermediaries in the security market.

  • Opening of Indian stock markets to investments by foreign institutional investors and authorization of Indian companies to raise capital on international markets by issuing Global Depository Receipts (GDR).

  • Establish the National Stock Exchange as a computerized trading system which served as an instrument to take advantage of reforms of other Indian stock exchanges. The NSE became India’s largest stock exchange in 1996.

  • Reduce tariffs from an average of 85% to 25% and cancel quantitative controls.

  • Encourage foreign direct investment by increasing the maximum limit on the share of foreign capital in joint ventures from 40 to 51% with 100% foreign participation allowed in priority sectors.

  • Streamlining of FDI approval procedures and, in at least 35 sectors, automatic approval of projects within the limits of foreign participation.

Eastward-looking policy:

  • Look East’s policy was his idea

  • Rao initiated the Look East foreign policy, which brought India closer to ASEAN.

  • He cultivated extensive economic and strategic relations with the nations of Southeast Asia, with the aim of strengthening India’s position as a regional power.

  • Under this policy, India’s strategy focused on establishing close economic and trade ties, as well as economic liberalization and deference to the policies of the Cold War era. .

  • Expansion of regional markets for trade, investment and industrial development; has been observed under this policy.

Commentator and political analyst Sanjaya Baru had called former Prime Minister PV Narasimha Rao many achievements such as ending terrorism in Punjab and successfully conducting polls in Jammu and Kashmir, other than launching the 1991 economic reforms, but his party Congress let him down.

“Yes, those and many more. On the whole, the party let him down,” Baru, who was media adviser to former Prime Minister Manmohan Singh, said in an interview.

“Those who characterize his economic policy as ‘stealth reform’ fail to recognize that what Rao pursued was in fact reform through implicit, if not explicit, consensus. He called it the “middle way”. His consensual approach taken by his two successors – Atal Bihari Vajpayee and Manmohan Singh – has served them and the country well. In the long run, this is an approach that serves India’s plural democracy better than gross majorityism, ”Baru wrote in Indian Express.

(with source inputs)

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Posted on: Wednesday December 22, 2021 5:36 PM IST