STORY OF PV NARASIMHA RAO
This chapter
deals with the happenings during the prime ministership of PV Narasimha Rao.
Now our country India is something different than of during pre-independence.
Now-a-days people are getting more opportunity in their life to achieve their
individual objective. India is on the path of becoming a developed country. so
question often comes into minds of the Indians that when it all started. It was
1991 which is regarded as the year from which a new era unfolded in the Indian history.
Then who is the main hero behind this image of India, was it PV Narasimha Rao
or two-time prime minister of India Manmohan Singh. Earlier PV Narasimha Rao
was known for three things. First was Ajodhya issue, reforms in finance of the
state and the last one was corruption. During his first two years of holding
the post of prime minister, the first two things have already been happened.
But for rest of his tenure as the prime minister of India, most of the time it
was corruption which was scattered through. And the biggest scam was the
Harshad Mehta scam. The root of this scam was reaching the prime minister of
India. This scam was regarded as the biggest economic crime till that period in
India. Harshad Mehta was very much known during that time for his activeness in
the stock market of India. Prior to that scam it was 1991, when the economic
market had been liberalised and the markets have been opened up for the foreign
investors. But at the initial stages of opening market in India, there were no
security checkpoint in the stock market. It was only two-year difference
between 1991 and 1993, but a lot has happened in that two years. There was very
less amount money in the hands of government during 1991. It was during January
1991, when the country was undergoing a severe economic crisis. Even the
country didn’t have the money to repay the amount of liability. If there was no way out to that situation, then
India could become one of the country who failed to pay the amount of
liability. During that time also India was purchasing oil and country was
having money only for seven days, that means after seven days there could be no
money any more to buy oil. Which was supposed to a serious issue of that time.
It was one of transition phase the country was undergoing. At that point of
time a meeting was held in the finance ministry. Reserve Bank governor of that
time S Venkatramanan was also there in the meeting with the financial advisor
to prime minister and he was Dr. Manmohan Singh. The governor suggested the
financial advisor that RBI can use reserved gold for mortgage to avail money
from the international banks and after listening to the suggestion Dr. Manmohan
Singh took the governor’s proposal to prime minister of that time Chandrasekhar
and the prime minister approved the proposal. He directed the governor of RBI
to meet Rajiv Gandhi regarding this proposal because it was Rajiv Gandhi led
congress which was supporting the government of Chandrasekhar from outside.
Then Rajiv Gandhi agreed on the proposal of RBI governor, after that the
finance minister of that time Yashwant Sinha also approved the proposal of RBI governor
to mortgage the reserved gold of RBI. When that file regarding mortgaging of reserved
gold of RBI reached the table of finance minister Yashwant Sinha by that time
Chandrasekhar’s government has already out of power and the country was under a
caretaker ministry. Then finance ministry signed the files regarding mortgaging
the reserved gold of RBI. With that signature the path was clear for mortgaging
the reserved gold, it was those gold which was seized from the smugglers and it
was kept in the State Bank of India. The reserved gold’s were sent to banks of
Switzerland and still it was not going to be enough, so still another 47000 kg
of gold sent to bank of Japan and the government availed 1100cr rupee. But
government failed to kept it secret from public eyes because Indian express
reporter of that time Sankar Ayier published that in newspaper with photographs
as well. for that economic crisis of India the most regarded reason was license
permit system. During that point of time no license was needed to start a new
factory but the government was deciding what amount of production the factory
will do and by what price the products will be sold out. There was almost no
chance for foreign investor to invest their money. IMF and other loan giving
body at the international level were claiming before Indian government to
change this approach. Till the last years of Rajiv Gandhi government the
situation had already became out of control. After Rajiv Gandhi’s government VP
Singh became the next prime minister but he didn’t take strong decision to stop
the upcoming crisis. After VP Singh’s government it was Chandrasekhar’s
government which had to face the crisis and all the responsibility was on the
prime minister Chandrasekhar. During that time another big incident happened at
the international arena and it was that Sadam Hussain captured Kuwait. America
was preparing to attack on Iraq and it became an another issue for India
because the rate of oil price was becoming high and high in each day. That incident
broke the backbone of Indian finance strength. Golf war of 1991 compelled the government
of India to change its economic and foreign policy, traditionally India aa a
country was supporting the Arab countries and Iraq was coming under Arab
countries. At the same time India was in urgent need of money from IMF and
without the green signal from America it was quite hard to get loan from IMF.
So America kept a condition before India that the government of India should
give approval for landing the American fighter jets on Indian soil to refuel
it. By giving green signal to America it was a message which would go to the
society that India is supporting America’s attack on Iraq. It was Subramaniam
Swami who had to talk with the American’s regarding the issue. After that talk,
Indian government allowed the America to use Indian soil for their purpose and
in reply India it’s demanded amount of money from IMF to find out a solution to
the economic crisis. But still India was in need of money so for that cause the
decision to mortgaging the reserved gold of the RBI was taken and it was the
decision which was not taken by the cabinet. When this particular decision was
implemented by that time it was clear that PV Narasimha Rao will be the next
prime minister of India. So it a huge challenge before PV Narasimha Rao to deal
with economic crisis for that he was in need of a good and expert person to
hold post of finance minister. PC Alexander and PV Narasimha Rao at first offered
IG Patel to hold the post of finance minister but he rejected the offer. During
that time Dr. Manmohan Singh was holding the post of director of University
Grants Commission and he suddenly got the call from PV Narasimha Rao to hold
the finance minister. Then Dr. Manmohan Singh presented the first finance
budget and in which it talked about economic liberalisation which changed the
overall status of Indian history. During that time government supported and
promoted the establishment of private company and due to this decision of PV Narsimha
was facing protest from internal party members and outsiders as well. but still
he kept ministry of industry under his belt so that he could look after the
matter directly. PV Narasimha Rao not only take the help of Dr. Manmohan Singh
but also opposition member Subramanium Swami for find a proper way out from the
economic hazards. Then the situation was getting into control due to the
economic liberalisation but at that time a huge scam was exposed and it was
banks scam otherwise known as Harshad Mehta scam. By profession he was just a
stock broker of that time but so far his property was concerned he was the
dream for the middle class Indians. Due to his activeness in the stock market
he was a popular face and use be covered by the best magazines cover page of
that time. This scam was exposed when journalist of that time Sucheta Dalal broke
the story when she came to know that Harshad Mehta engaged in manipulating the
documents regarding share bond between SBI and RBI as the broker. He engaged in
making wrong doings and made more than 534cr rupees personally. After knowing about
the scam the senior officials of SBI called Harshad Mehta to talk about
regaining the money from him. Then after a few days Harshad Mehta returned all
the cheques to SBI, but RBI asked SBI that how can a broker give cheques of
such a high amount. And after investigation it was found out that the cheque is
from National Housing Bank, which comes under RBI. Then it came to public
sphere that most of the banks are interconnected to the biggest economic crime
in Indian history of that time. Pressure was mounting on finance minister Dr.
Manmohan Singh for his resignation and after that JPC was formed to enquiry
over that scam. It was for the second time after Bofors scam that JPC was formed.
While both CBI and JPC was investigating the scam and they have arrested
Harshad Mehta and after due interrogation he was released and after that
Harshad Mehta clamed and accused that let not name it as Harshad Mehta Scam it is originally PV Narasimha
Rao scam because he claimed that he had given bribe of one crore to the prime
minister of India. According to Harshad Mehta on 4th November 1991
with his brother Aswini Mehta had been to PV Narasimha Rao and had given him a
suitcase which was contatning 67 lakhs of Indian rupees. Then it was rejected
that the claims of Harshad Mehta is prove less and illogical and then Harshad
Mehta hold another press conference, where he tried to showcase how one
suitcase can contain more 67lakhs of Indian rupee. The opposition was demanding
the resignation of prime minister then PV Narasimha Rao rejected all the
accusation on him and he met Harshad Mehta. The monsoon session of parliament
was about to start and the opposition like left parties, BJP and few internal
leaders of congress party like Arjun Singh, ND Tiwary and Sharad Power was
making their own ways to trap prime minister PV Narasimha. The opposition was
supposed to present No Confidence motion against the government of PV Narasimha
Rao. Most of the opposition party were in favour of No Confidence motion.
During that time congress party was having 249 seats and on the day before No
Confidence motion and everyone’s eye was on the move of Janata Dal(A) which was
led by Ajit Singh. And finally he decided that his party will be in support of
No Confidence motion against PV Narasimha Rao government. after that
announcement of Ajit Singh, more pressure mounted on PV Narasimha Rao to resign
but he didn’t resigned. Finally, 251 votes went in favour of No Trust vote and
265 against the No Trust vote. So finally from the verge of dissolution of PV
Narasimha Rao government escaped. Lot of political members were accused of
giving bribe and receiving it but no one has been penalised for the mistakes. Throughout
PV Narasimha Rao’s prime ministership numbers of accusation had been alleged on
him but not a single one had been proved. After the Ajodhya issue the
government of PV Narasimha Rao was bit weak due to the constant expose of scams
after scams and at that time a new things came into public sphere and that was
Hawala scam. It was that scam in which lot of political leaders, bureaucrats,
senior officials of government of India were indulged in taking bribe. During
that the general election was about to come by 1996 and suddenly charge sheet
have been filed against few very well-known political leaders and people are
thinking that there must some political interest of making quick move in Hawala
scam. For the election the opposition was making the corruption as the major
means for getting public support to defeat Narasimha Rao government. The
intention of PV Narasimha Rao very much clear to get the political mileage by
using Hawala scam to trap most of his main opposition leaders in congress party
and outside as well. but the strategy of Hawala didn’t have any sort of
positive result in 1996 election to PV Narasimha Rao. And his government came
to an end. Then Harshad Mehta came into the market yet again but this time he found
to be guilty for a small incident and he was jailed for five years and he died
in 2001 in Jail itself. The best thing happened for the national cause during
PV Narasimha Rao’s government was the economic liberalisation but at the same
time the corruption was the major problem of his government.
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