Senior Congress leader Jairam Ramesh (Express photo) Senior Congress leader Jairam Ramesh (Express photo)

Soon after taking office in June 1991, Prime Minister P V Narasimha Rao was convinced by his Finance Minister Manmohan Singh to authorise a major devaluation of the rupee in two stages. Singh, who had served abroad from 1987 to 1990, had a “modest dollar saving” of his own. He himself stood to benefit because of the devaluation.

In his new book “To the Brink and Back”, Jairam Ramesh reveals that Singh informed Rao ahead of the devaluation that he would deposit the “windfall gains” he stood to make into the Prime Minister’s Relief Fund. And he did.

It was this sort of “unimpeachable” integrity that made Rao repose his complete trust in Singh’s economic wisdom and back him totally even when he was initially not sure of the measures that were being recommended by Singh to pull India out of the economic crisis of 1991.

Ramesh, who worked in Rao’s PMO for the first three months of his government, says it was the circumstances of the times — “India in 1991 could well have mirrored Greece in 2015” — that made the two Nehruvian, left of centre, leaders take the kind of decisions they took to put India on a faster growth trajectory.

“There is a Tolstoyan perspective of history which holds that individuals are irrelevant and circumstances create events. Another view is that individuals matter and do decisively shape the course of history. My own feeling is that what got accomplished in June-July 1991 was inevitable, if our goal was to avoid the opprobrium of default,” writes Ramesh.

But he is also effusive in his praise for both Rao and Singh. “Rao did not put a wrong foot forward in the initial months, and displayed both political manoeuvring and statesmanship of the highest order… I have to say he was simply magnificent. A lifetime of circumspection gave way to courage,” he said, while calling him India’s Deng Xiaoping, the Chinese leader who transformed China’s economy in the late 1970s.

“Both were old men. Both had their ups and downs (more downs than ups). But when the moment came, they seized the opportunity to leave their imprint,” writes Ramesh, adding that Rao’s political astuteness and Singh’s economic wisdom worked like a “jugalbandi”.

“There was no guarantee of success, and certainly no likelihood of quick positive outcomes; indeed, the results of the reforms started becoming evident only after 1993. Consequently, theirs (Rao’s and Singh’s) was a huge leap of faith.

It was, in fact, a gamble of sorts. The most risk-averse of gentlemen took this wager only because the alternative — namely a default — was an anathema to both,” he writes.

In his book, Ramesh claims that Rao was “misunderstood” and even “reviled”, even by some within his own Congress party, an organisation “he had served with distinction for almost half a century.”

In a conversation with The Indian Express on Saturday, Ramesh suggested that the party needed to own up Rao and his decisions of 1991.

“The Congress party must be totally unapologetic of the economic reforms of 1991 and whole-heartedly own up what was done then. It must in fact take credit for the momentous changes brought about by Rao and Manmohan Singh that put India on a faster track to economic prosperity,” he said.

In his book, Ramesh says Rao was “a complex personality, not at all easy to comprehend”, and wonders why a man of “such erudition and learning” as him maintained a relationship with “sleaziest of characters” like Chandraswami.

“At one stage in his early days of his prime ministership, Chandraswami had convinced Narasimha Rao that India could easily tide over its immediate financial crisis because the godman’s buddy, the Sultan of Brunei, had agreed to extend a line of credit to India at the most concessional terms without any questions asked. That the Prime Minister took this suggestion seriously is borne out by the fact that a plane was ready to fly the Finance Minister to meet the Sultan! Thankfully, Manmohan Singh managed to convince his boss at the last minute that this would be a foolhardy adventure,” he writes.

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