When Cabinet Secretary Naresh Chandra told Prime Minister Chandra Shekhar about having to mortgage gold in order to pay for imports, “his initial reaction was that of disbelief and anger”. “I do not want to go down in history as the man who sold gold for buying oil,” Chandra Shekhar reacted furiously. To which Chandra replied, rather coolly, “But, sir…you have to choose between going down in history as the prime minister who mortgaged gold or as the prime minister who defaulted.” It is this and many such anecdotes which make Baru’s book stand out.

Here is another interesting anecdote from the book. In the run-up to 1991, India had managed to accumulate a good amount of foreign debt. By then it was extremely common for developing countries (or what was known as the Third World at that point of time) to default on their debt. Mexico had done it previously. So why not India?

A highly placed economic policymaker recommended to Chandra Shekhar that India should default on its debt. Interestingly, Baru does not reveal the name of this policymaker. The economic policymakers at that point of time, among others, were Deepak Nayyar, who was the chief economic adviser, C. Rangarajan who was a deputy governor of the Reserve Bank of India, and Manmohan Singh who was the adviser to the prime minister.

Thankfully, Nayyar and Chandra managed to explain the consequences of a default to the prime minister and India did not default. Other than offering anecdotes, what the book explains well is how Narasimha Rao, after becoming prime minister, managed to drill down economic reforms through a system which was till then a hodgepodge of Nehruvian socialism and the economic policies of Indira Gandhi.Take the case of the big bang industrial delicensing and decontrol which was pushed through by Rao. As Baru writes:

“(It) was announced by the Minister of State for Industry P.J. Kurien on the morning of the finance minister’s budget speech on 24 July. Given the political and media focus on the budget speech, the real reform of the day did not get the play it deserved. This was clearly by design.”

Indian politicians and a host of left-leaning economists and intellectuals at that point of time were allergic to anything that allowed the private sector to do business more easily. Given that, Rao’s move to dismantle the entire licensing regime at one go and getting a junior minister to announce it, was a masterstroke.