Congress after Rajiv Gandhi

P.V. Narasimha Rao provided stellar leadership to India at a critical juncture. Not only did he stabilise and turn around the nosediving economy, he also revitalised India's foreign policy. The fact that he led a minority government did not stop him from putting in place the necessary correctives. In the 1996 general election, the Congress party under the leadership of P.V. Narasimha Rao faced a major defeat, reducing its strength from 232 to 140 in the Lok Sabha. This electoral loss was inexplicable, given that it came after PV's exemplary steering of the economy through the balance of payments crisis and the introduction of major economic reforms. PV was, however, not surprised. In fact, he had shared with me his fears of Congress defeat ahead of the elections. The fact was that in the initial phase, economic reforms largely affected the elite, and the potential benefits were yet to percolate to the masses. Elections are essentially a function of the politics of the masses and the performance of the Rao government had little to show in terms of its populist appeal.

Kesri's 'Mere paas waqt nahin hai'

[Sitaram] Kesri's tenure as treasurer was sixteen years long and he became a butt of a few jokes within the AICC, with one being about his accounting procedures: 'Na khaata, na bahi, jo Kesriji kahen wahi sahi.' As Congress president, Sitaram Kesri played a crucial role in destabilising the United Front government, first led by [H.D.] Deve Gowda in 1996-97 and then by I.K. Gujral in 1997-98. The Deve Gowda government had been deliberately targeting the Congress. Members of the Congress, including former prime minister Narasimha Rao, were being prosecuted by the police on charges of corruption. The Bofors issue too was once again resurrected by the Gowda government. The Congress party could not support a government which was bent upon maligning and persecuting its leadership.

Despite the fact that he led a motley coalition precarious from the start, Gujral refused to yield to the Congress's demand of dropping DMK from the coalition after the Jain Commission's findings were released. So why did the Congress withdraw support? What did Kesri mean by his oft-repeated comment, 'Mere paas waqt nahin hai (I have no time)'? Many Congress leaders interpreted it as his ambition to become prime minister. He tried to exploit the overarching anti-BJP sentiment while simultaneously undermining the United Front government with the aim of thrusting himself as the head of a non-BJP government. Whatever the reason, I.K. Gujral stood firm in his resolve not to drop the DMK ministers.

Relations with Sonia warm up

Pranab with Sonia during the Lok Sabha campaign in May 2004 Pranab with Sonia during the Lok Sabha campaign in May 2004

Following my active participation in the Pachmarhi conclave in 1988, Sonia Gandhi started consulting me more frequently. A certain detachment which had earlier existed in our relationship gradually transformed into warmth and mutual respect. I believe that this detachment and her decision of not being aligned with anybody in particular is her greatest strength. It reflects another important dimension in India's political history. Like other illustrious members of her family, Sonia has adopted a truly pan-India approach. Her ability to reach out to the masses and their acceptance of her as their leader was the single most important qualifying factor for her to become India's prime minister. She could have acquired other essential qualities for this office after assuming power.

Sharad Pawar wanted to be PM

Ahead of the 1999 elections, there seemed to be an all-out rebellion against the possibility that Sonia Gandhi might be the Congress's prime ministerial candidate. In my opinion, Sharad Pawar, as the leader of the Opposition in the Lok Sabha, expected the party to request him, instead of Sonia Gandhi, to stake claim to form the government. After Sonia's elevation as the Congress president, she consulted P. Shiv Shankar on all important issues rather than Sharad Pawar. This sense of alienation and disenchantment may have been responsible for his statements on Sonia's foreign origin, and his subsequent exit from the party in 1999.

Singh is truly king

After the Congress victory in General Elections 2004, the prevalent expectation was that I would be the next choice for prime minister after Sonia Gandhi declined. This expectation was possibly based on the fact that I had extensive experience in government, while Singh's vast experience was as a civil servant with five years as a reformist finance minister. Some media commentators reported that I would not join the government because I could not work under Manmohan Singh, who had been my junior when I was the finance minister. The fact was that I was reluctant to join the government, and informed Sonia Gandhi accordingly. She, however, insisted that I should join the government since I would be vital to its functioning, and also be of support to Dr Singh. As it turned out, Dr Singh would talk to me on all important issues and seemed to depend on me. We shared a good working relationship. Notwithstanding the debate regarding his appointment as prime minister, there could have been no one more experienced in economic policymaking than Manmohan Singh.

Why Pranab got defence

Sonia Gandhi and Manmohan Singh discussed likely ministers from the Congress. In that context, Sonia called me and asked which of the four portfolios I would prefer to take. Her inclination was for me to take up finance. However, I told her that I would not like to be charged with finance due to my ideological differences on economic policy with the prime minister-designate. I also told her that I would prefer home over external affairs-I had worked as the chairman of the standing committee on home affairs for over six years and was conversant with the ministry-and that I had no experience in defence. She heard me out, making no commitment, nor indicating a decision other than saying that defence was a world in itself and the defence ministry would offer me maximum autonomy, taking into account my seniority. It was at the swearing-in that I got to know that I was to be the minister for defence.

Handling naval war room leaks

Unfortunately, one of the prime accused in the naval war room leak case was Ravi Shankaran, a former naval officer and a relative of the wife of the then Chief of Naval Staff, Admiral Arun Prakash, a decorated naval aviator and a man known for his high integrity and professionalism. Shankaran owned a company called Shank Ocean Engineering and was involved in the business of naval supplies. He had allegedly used his relations with officers in the naval directorate to acquire information. Confronted with this revelation, Admiral Prakash, in the true tradition of a man in uniform, called on me and submitted his resignation in August 2006. Though I appreciated his expression of propriety, I was unwilling to accept his resignation without there being any prima facie evidence against him. I was influenced in my decision by the dictum that every individual is responsible for his or her own action, and the relatives of an accused do not have to bear the burden of any criminal or improper act unless there is some evidence to the contrary. And to this day, I feel vindicated about the decision I took since nothing has even remotely surfaced so far, linking Admiral Prakash to any wrongdoings of his relative.

Pranab Mukherjee with M.L. Fotedar and P.V. Narasimha Rao in 1983 Pranab Mukherjee with M.L. Fotedar and P.V. Narasimha Rao in 1983

With Manmohan Singh at the Congress plenary in Kolkata in August 1997 With Manmohan Singh at the Congress plenary in Kolkata in August 1997

With Sitaram Kesri in New Delhi in January 1997 With Sitaram Kesri in New Delhi in January 1997

Lecturing Henry Kissinger

When I became the defence minister, I was well aware that in the long term, India's dependence on Russia for her security requirements had to be reduced. Further, the dismantling of the Cold War military blocs reduced past differences between India and the US. Both were democracies and at the fundamental level, there was more confluence than divergence of interests. The time had come to engage with the US and I directed the ministry to work towards building closer ties with the Pentagon.

My visit to the US was preceded by a brief interaction with former US Secretary of State, Henry Kissinger, at South Block, in 2004. During the meeting, he commented on the robust trade relations established between the two nations during the tenure of US Secretary of Commerce, Ron Brown, and questioned the lack of comparable synergy and substance in the defence relationship. In my reply to his question, I stated categorically that Indo-US defence relations had suffered due to a complete trust deficit. I reminded him of the US decision to block the critical cryogenic deal, which was of supreme national interest to India. It had impelled India to indigenise. 'If the US could not subscribe to India's national interest, why should we subscribe to your national interest and forge deeper defence ties?' I responded. Soon institutional mechanisms were put in place and India's willingness to establish strategic ties with the US was emphasised. On 28 June 2005, Donald Rumsfeld (Secretary of Defense) and I signed the historic 'New Framework for US-India Defence Relations'. It was a roadmap for establishing closer defence relations between the two nations in the coming decade.

Rescuing Bangladesh's two begums

Just before the elections (in January 2007), Bangladesh President Iajuddin Ahmed declared a state of Emergency and installed a caretaker government headed by Bangladesh Chief Adviser, Dr Fakhruddin Ahmed. During this period, all prominent political leaders were imprisoned. Sheikh Hasina too was jailed on charges of bribery and corruption. While India continued to engage with the caretaker government, we stressed the need for full restoration of democracy through peaceful, credible, free and fair elections.

In February 2008, Bangladesh army chief Moeen Ahmed came to India on a six-day visit. He called on me too. During the informal interaction, I impressed upon him the importance of releasing political prisoners. He was apprehensive about his dismissal by Sheikh Hasina after her release. But I took personal responsibility and assured the general of his survival after Hasina's return to power. I also sought an appointment with the US President George W. Bush to request his intervention in the matter and ensure the release of both Khaleda Zia and Sheikh Hasina. With my intervention through the then National Security Advisor M.K. Narayanan, I ensured the release of all political prisoners and the nation's return to stability. Several years later, I also facilitated General Moeen's treatment in the US when he was suffering from cancer.

Sheikh Hasina had been a close family friend, and when I was the external affairs minister, India tried to help her cause by building adequate international pressure for free and fair elections after the caretaker government. In fact, when some Awami League leaders deserted her at the time she was in jail, I rebuked them for their stand and told them that to leave someone when they are down is unethical. The general election was held in December 2008, and Sheikh Hasina won with a thumping majority.

Clinching the Indo-US nuclear deal

One of the most satisfying achievements of my tenure as the minister of external affairs was the signing of the Indo-US Civil Nuclear Agreement in October 2008. We achieved this despite stiff political resistance from opposition parties, including the Left who were part of the ruling coalition. [The break came] when Dr Manmohan Singh, while attending the G-8 summit in Japan as an observer, made a remark that the government would submit the India-specific safeguards agreement to the International Atomic Energy Agency Board very soon. In the light of the prime minister's remark, the Left parties accused us of going back on our commitment-ostensibly given by me-and withdrew support to the UPA. I tried to reason with the Left and sought the intervention of Jyoti Basu, who was convinced about the merit of the nuclear deal. Jyoti Basu spoke to Prakash Karat and suggested that there might be value in Karat meeting me. Karat did meet me, but remained vehement in his opposition, and maintained that the Left would join hands with the BJP to vote the UPA out. His open defiance of Jyoti Basu and the Bengal lobby was quite surprising. The UPA government had to withstand a no-confidence motion in the Lok Sabha after the withdrawal of support by the Left parties.

The Indo-US nuclear deal would not have come to fruition without the strong rapport I shared with US Secretary of State Dr Condoleezza Rice. Further, my efforts to reach out to the government in Myanmar, known for its strong anti-US position, were instrumental in securing important concessions for US diplomats and tourists and laid the foundation for a deeper understanding between the two democracies. But it was the steadfast support from President Bush that really clinched the deal. Defying protocol, he went out of the way to meet me several times at the White House and even on the sidelines of the UN General Assembly. The Indo-US nuclear deal was Dr Manmohan Singh's finest hour.

26/11: Tough words with Rice

After the [26/11] incident, the first call was from Condoleezza Rice. She was concerned about the fallout. I told her, 'The situation is grave. I do not believe in romanticising relations or indulging in any sort of adventurism, but there is a limit to one's patience. We are truly concerned.' I also insisted that the US exert pressure on Pakistan to stop cross-border terrorism. I took strong exception to the sale of sophisticated arms and equipment to Pakistan by the US. I refused to buy their argument that these weapons were supplied to Pakistan for limiting the threats from terrorist groups like al-Qaeda and Taliban, and pointed out that they were actually being used against India.

I knew that time was of essence for the success of our diplomatic initiative to reach out to world leaders and expose Pakistan's nefarious designs. Over the next three days, I spoke over the telephone to foreign ministers of more than 100 countries across different time zones. Everybody expressed their solidarity with us and condemned the attack. They were concerned about the growing menace of terrorism. There were no takers for Pakistan's 'non-state actors' excuse. I did not seek support from Israel since it carried the risk of isolating 54 Islamic countries that backed India. The reaction from China was along expected lines. Though the leadership was very prompt in conveying its condolences to India, they did not accept the fact that the strikes were carried out by elements based in Pakistan. This cautious approach was managed largely by Pakistan. But the leadership did acknowledge the report on the attacks submitted by me.

Comic interlude to the Mumbai attacks

One of the few lighter moments around this time was a particular incident which led to the Pakistan air force being put on alert and the armed forces ordered to meet any eventuality. A call was allegedly made from my office to President [Asif Ali] Zardari threatening him of dire consequences. I heard about this from my office as I landed in Kolkata. On the way from the airport to my residence, I was told that the US Secretary of State was frantically trying to contact me. I called her as soon as I reached home. She enquired about the status of the situation and the veracity of the information that I had warned Pakistan of dire consequences. Though she did not tell me that she had been informed by Pakistani authorities, other sources told me that the information had indeed been provided to her by the Pakistani leadership who seemed to have genuinely panicked. I told her 'If there was any such eventuality, do you believe that the foreign minister of the country would be 1,200 km away from the capital? I am in Kolkata and I am planning to go to my constituency, another 250 km away from the capital tomorrow. Whatever you have heard is nothing but rumours.' Later, Pakistani newspaper Dawn reported that a hoax call was made to President Zardari's office by a person who was in a Pakistani jail. He called the president's office and pretended that he was speaking from Pranab Mukherjee's office. The entire episode provided some comic relief in an otherwise tense situation.

Pranab with Bangladesh PM Sheikh Hasina in New Delhi in January 2010 Pranab with Bangladesh PM Sheikh Hasina in New Delhi in January 2010

With US President George W. Bush at the White House in March 2008 With US President George W. Bush at the White House in March 2008

With Sitaram Yechury in May 2008, during the UPA government's standoff with the Left on the Indo-US nuclear deal With Sitaram Yechury in May 2008, during the UPA government's standoff with the Left on the Indo-US nuclear deal

Shivraj Patil gets sacked

This was also a time when several people came under heavy criticism, one of them being Shivraj Patil. A CWC meeting was held on 29 November during which the post-attack scenario was discussed. During this meeting, P. Chidambaram was stridently vocal against Shivraj Patil and advised a change of the home minister. I tried to bring the sentiment down a bit by saying that we should not blame an individual; we all have our weaknesses. Throughout this discussion, Shivraj Patil remained stoically silent. I got a call from Dr Singh on the morning of 1 December and he suggested that I meet him as soon as possible. I left for Race Course Road immediately. As I was driving in, I noticed that Shivraj Patil was driving out, but at that time I had no inkling of what was to happen. As soon as I was ushered into Dr Singh's office, he told me that Shivraj Patil had resigned, and that Sonia Gandhi had suggested that I take over as home minister. He went on to say that he advised Ms Gandhi against this as I was handling a war-like situation as the external affairs minister and that the ministry could not afford the change at this time. Hence, it was decided that P. Chidambaram would replace Shivraj Patil. It was at about this time that Chidambaram too joined the meeting, and we discussed the transition. [Soon after Mukherjee replaced Chidambaram as finance minister.]

Differences with Chidambaram

Chidambaram set a trend and gave a new direction to the Indian taxation system by drastically reducing the rates of taxation from excessively high levels to reasonably low levels. His analysis of the economic situation within India and outside was pragmatic, professional and acted as the guide to future policymakers. Chidambaram has presented the second highest number of budgets in the country after a record 10 by former prime minister Morarji Desai. He is intellectually sharp and well-informed, though he sometimes appears to be arrogant because of his very strong convictions and style of presentation.

Much has been talked about differences between Chidambaram and me. I will say that any differences that there might have been were due to our differing perspectives on the economy. While I was conservative and believed in reforms as a continuous process and favoured an inclusive and gradual transformation of the economy-a controlled regime. He is a pro-liberalisation and pro-market economist.

No regrets over retrospective tax

The decision of mine, born out of my conviction that India's Direct Tax Policy should not discriminate between domestic and foreign entities, was a subject of much debate and remains so to date. The controversy began when I announced in my 2012-13 budget speech that I proposed to amend the Income Tax Act, 1961, with retrospective effect to undo the Supreme Court judgment in the Vodafone tax case.

Manmohan Singh was convinced that the proposed amendment in the IT Act would impact FDI inflows into the country. I explained to him that India was not a 'no-tax' or 'low-tax' country. Here all taxpayers, whether resident or non-resident, are treated equally. I insisted that as per our country's tax laws, if you pay tax in one country, you need not pay tax in the other country of your business operation which is covered by the Double Tax Avoidance Agreement [DTAA]. But it cannot be a case that you pay no tax at all. I clarified that some entities had done their tax planning in such a way that they didn't have to pay tax at all. My intention was clear: where assets are created in one country, it will have to be taxed by that country unless it is covered by the DTAA. Later, Sonia Gandhi, Kapil Sibal and P. Chidambaram also expressed the apprehension that the retrospective amendments would create a negative sentiment for FDI. I explained to them that FDI comes when there is profitability and not on account of zero tax. Clarificatory amendments were proposed to make the intent of the legislature clear. This would bring tax certainty and would clarify that India had the right to tax similar transactions. Two more cabinet colleagues separately advised me to take a middle path, and to reconsider the decision. But I remained resolute. Despite the angst that my proposal generated at that time, and even now, both from within my party and outside, I wonder why every succeeding finance minister in the past five years has maintained the same stance.

The making of a President

Pranab Mukherjee arrives to inspect the guard of honour in the forecourt of Rashtrapati Bhavan in July 2012 Pranab Mukherjee arrives to inspect the guard of honour in the forecourt of Rashtrapati Bhavan in July 2012

I met Sonia Gandhi on the evening of 2 June 2012. We reviewed party positions on the presidential election, and discussed probable candidates and the possibility of garnering the required support for those candidates. During the course of this discussion, she told me frankly, 'Pranabji, you are most eminently suited for the office, but you should not forget the crucial role you are playing in the functioning of the government. Could you suggest a substitute?' 'Madam,' I said, 'I am a party-man. Throughout my life, I have acted as per the advice of the leadership. Therefore, whatever be the responsibility given to me, I will discharge it with all the sincerity at my command.' She appreciated my stance. The meeting ended, and I returned with a vague impression that she might wish to consider Manmohan Singh as the UPA presidential nominee. I thought that if she selected Singh for the presidential office, she may choose me as the prime minister. On 13 June, Mamata Banerjee met Sonia Gandhi. Later, Sonia Gandhi told me that Mamata had flagged off to her the names of two potential UPA nominees for the presidential election: Hamid Ansari and myself. Mamata said she was in discussions with Mulayam Singh Yadav on this issue, and would speak to him and revert. However, she did not inform Sonia Gandhi about her decision.

I am not aware of the discussions at Mulayam Singh Yadav's residence. But at a press conference that they jointly held that evening, they declared that their presidential nominees were A.P.J. Abdul Kalam, Manmohan Singh and Somnath Chatterjee, in that order. Mamata also mentioned her meeting with Sonia Gandhi and insisted that Sonia had suggested two names-Hamid Ansari and Pranab Mukherjee-both of whom were unacceptable to them.

On 14 June, I went to meet Sonia Gandhi at 11 am and had a long discussion with her. I found her to be in a decisive mood. She told me about her meeting with Mamata Banerjee. She was dismayed that Mamata had not informed us about her decision after the meeting with Mulayam Singh Yadav and, instead, had disclosed information to the media. She suggested the issue be discussed further at the Core Group meeting, which was already scheduled at 7 Race Course Road, and was to be attended by her, A.K. Antony, P. Chidambaram, Ahmed Patel and myself, along with the PM. I recommended to Sonia Gandhi that she discuss the implications of my nomination with both the party and the government. There were a slew of scheduled meetings of the cabinet and some cabinet committees that evening, after which Dr Singh informed me of his discussion with Sonia Gandhi and their joint decision to nominate me.