New Delhi: Holding former prime minister Rajiv Gandhi responsible for creating the 1991 economic crisis, ex-media advisor to former prime minister Manmohan Singh Sanjay Baru has said heavy external borrowing coupled with withdrawal of support to the Chandrasekhar-led government `put the country to the brink of the crisis.`


COMMERCIAL BREAK
SCROLL TO CONTINUE READING

"There are two reasons for the crisis of 1991, the first reason was the economic policies we followed after 1985, Rajiv Gandhi borrowed internationally very heavily and the fiscal deficit went up, Balance of Trade deficit went up and external debt to the country went up.


The fiscal management by Rajiv Gandhi was criticised by many economists, but then a second factor which contributed the crisis was that when the V P Singh government fell, R Venkat Raman agreed to swear in a minority government, led by Chandrashekar, on the condition that Rajiv Gandhi will allow the government to present a budget in parliament and to deal with the crisis.


Rajiv Gandhi gave him the assurance that he will not withdraw the support to Chandrashekhar. Just one week before the budget, however, Gandhi took the decision to withdraw support and did not allow Chandrashekhar to pass the budget. That one decision really put the country on the brink of a crisis," Baru told ANI while discussing key points about his second book titled "1991: How P V Narasimha Rao Made History."


He said the advent of P.V. Narasimha Rao as Prime Minister in 1991 completely changed the nation`s image."We were at the verge of defaulting, our Balance Of Payment was in trouble, our foreign exchange reserves were coming down and India was on the verge of defaulting, and if we had defaulted in 1991 our status would have been like many African and Latin American countries.


Chandrashekhar`s government did not have a majority in the parliament, elections were called, Rajiv Gandhi was assassinated, there was a crisis in the country, the Soviet Union had collapsed. In a very difficult year, Narasimha Rao, who was a heart patient and about to retire, became Prime Minister, and within one month of the formation of his government, he presented one of the major budgets in industrial policy reform and completely changed the image of India," he said.


He also said that the Congress Party mistreated Rao and added that the party denied him a Bharat Ratna, giving it instead to former Tamil nadu chief minister M.G. Ramachandran."I think his party treated him terribly. For a man who was the Prime Minister for five years, he was elected president of the Congress party. The Congress for the first time, after 20 years, had elections in 1992. He ran a congress government for five years, and yet when he died, they did not allow his body to come into the party headquarters, they did not allow the funeral to be held in Delhi, the party completely erased him. The party gave M.G. Ramchandra a Bharat Ratna, but did not give him a Bharat Ratna," Baru added.