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P.V. Narasimha Rao

The first ever from South to hold this office, P.V. Narasimha Rao ruled for full five years, from June 21, 1991 to May 10, 1996 (1,785 days), despite a hung Parliament, initially. Son of Shri P. Ranga Rao, Shri P.V. Narasimha Rao was born on June 28, 1921 at Karimnagar. He studied in Osmania University, Hyderabad, Bombay University and the Nagpur University. A widower, Shri P.V. Narasimha Rao was the father of three sons and five daughters. Being an agriculturist and an advocate, he joined politics and held some important portfolios. He was the Minister of Law and Information, 1962-64; Law and Endowments, 1964-67; Health and Medicine, 1967 and Education, 1968-71, Government of Andhra Pradesh. He was the Chief Minister, Andhra Pradesh, 1971-73; General Secretary, All India Congress Committee, 1975-76.

He was Minister for External Affairs from January 14, 1980 to July 18, 1984; Minister of Home Affairs from July 19, 1984 to December 31, 1984 and the Minister of Defence from December 31, 1984 to September 25, 1985. He then assumed charge as Minister of Human Resource Development on September 25, 1985. During the period when he was Minister of External Affairs, Shri Rao successfully brought to bear his scholarly background and rich political and administrative experience on the field of international diplomacy. His role at the Conference of Foreign Ministers of Non-aligned Countries in February 1981 earned him wide appreciation. Rao had shown keen personal interest in international economic issues.

While campaigning in Tamil Nadu on behalf of his Congress (I) party, Rajiv Gandhi was assassinated on May 21, 1991, apparently by Tamil extremists from Sri Lanka, unhappy with India's armed intervention to try to stop the civil war there. In the elections, Congress (I) won 213 parliamentary seats and returned to power at the head of a coalition, under the leadership of P.V. Narasimha Rao. This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalization and reform, which opened the Indian economy to global trade and investment.

An economic crisis prompted Prime Minister Narasimha Rao to initiate sweeping reforms in 1991. The bold stabilization measures announced by the minority government of Narasimha Rao in mid-1991 were a direct response to the country's foreign exchange crisis and tumbling international credit ratings. With the support of the main opposition party, the minority government of Narasimha Rao (which came to power in June, 1991) acted swiftly on these recommendations. In his State of the Union address to Parliament, Rao announced a radical agenda for refonn, declaring that his government "will work to make India internationally competitive." He extended an invitation to foreign investors, outlining his vision of a "vibrant economy that rewards creativity, enterprise and innovativeness." Important reform measures followed. These early measures produced quick results, and proved pivotal in restoring macroeconomic stability and regaining investor confidence. Companion reform measures related to trade, finance and industry mark India's most serious attempt to liberalize its highly regulated economy since independence.

The Government's stabilization and policy reform initiatives have been hailed both in India and abroad. The World Bank, the International Monetary Fund and all other major donors, including the United States, have strongly endorsed these measures. Most observers agree that the reform program constitutes an irreversible new direction in Indian policy, but that disciplined implementation and additional measures will be required to spur economic development and ensure India's closer integration with the global economy.

India progressively abolished licensing for all industries except atomic energy, defense equipment, alcoholic beverages, and tobacco. India slashed its average applied import tariff rate from 79.2 percent in 1991 to 16.0 percent in 2005, phased-out quantitative restrictions on almost all imports by 2001, and eased restrictions on foreign investment. Since 1991, the leaders of India's two major parties, the Bharatiya Janata Party (BJP) and the Congress Party, have supported further liberalization. Given India's fractious multiparty parliamentary system, opposition from minor parties had forced both BJP- and Congress-led governments to delay or weaken proposed reforms during the previous fifteen years.

Annual foreign direct investment rose from about $100 million in 1990 to $2.4 billion by 1996. Net FDI in 2003 reached an estimated $5.5 billion. More than one-third of these investments was made by US companies.

Prime Minister Narasimha Rao innaugurated in 1992 a "Look East" policy to enhance India's economic ties with its Asian neighbors.

During a landmark visit to China in 1993, Prime Minister Rao signed an agreement to reduce troops and maintain peace along the Line of Actual Control that divides the two countries' forces at the disputed border. Periodic working group meetings aimed at reaching a final settlement continue. Despite still unresolved issues, high level exchanges between New Delhi and Beijing regularly include statements from both sides that there exist no fundamental conflicts of interest between the two countries.

With the fading of the Cold War, the United States and India began exploring the possibilities for a normalized relationship between the world's two largest democracies. The visit to the United States by Indian Prime Minister Narasimha Rao in 1994 marked the onset of improved US-India relations. Rao addressed a joint session of Congress and met with President Clinton. Although discussions were held on nuclear nonproliferation, human rights, and other issues, the main focus of the visit was rapidly expanding US-India economic relations.

In the winter of 1995, when P V Narasimha Rao was PM, there was talk of a nuclear test. Whether the US found out and put pressure against testing or whether Rao had no real plan to test has been the subject of much speculation, as when Jaswant Singh claimed there was a "mole" in the Rao PMO [Prime Minister's Office] who tipped off Washington.

India's domestic politics also took new shape, as the nationalist appeal of the Congress Party gave way to traditional caste, creed, regional, and ethnic alignments, leading to the founding of a plethora of small, regionally based political parties. The final months of the Rao-led government in the spring of 1996 were marred by several major corruption scandals, which contributed to the worst electoral performance by the Congress Party in its history. The Hindu-nationalist BJP emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without a parliamentary majority.

Rao was an important figure in the history of modern India, inaugurating major economic reforms that have stimulated growth and prosperity throughout the country. He was also instrumental in efforts to inaugurate a new era of closer relations between the United States and India following the end of the Cold War. India and the United States continue to build on his legacy.

P.V. Narasimha Rao died December 23, 2004.