We have to change our thinking     

There were no grand visions, no spelling out of a Nehruvian world view. Instead, there was a matter-of-fact approach to problems,’ began the introductory paragraph of an exclusive interview India Today did with Rajiv Gandhi within a month of him taking over as prime minister.

‘If he had not decided what precise policy options he would choose in a number of areas, he seemed to have abundant confidence in his own ability to choose the right one once the options were placed before him. And if something had to get done, why, sure it would get done. No question. And yet, despite all the evidence of a young prime minister in a hurry, he was relaxed, the basic underlying personality trait of caution surfacing every once in a while,’ the piece observed.

‘Yes,’ he affirmed in answer to a question from the interviewers. ‘I am pleased that I am in a position to do something… But what is scary is the expectations people have.’ The hope he had ignited in the hearts of people weighed on his mind, but he was not overwhelmed by it. He was possibly aware that he would have to chip away at the system continuously in order to redraft it. An overnight overhaul was ruled out, though time was running out to launch the country into a future that would redeem the collective hope of a better India.

‘It is our way of thinking which we have to change,’ he said on his effort to take India into the 21st century. ‘We are still very backward in that way. We are really pushing everything on a day-to-day basis. We are short of something we need, another 5 per cent. Okay, we give another 5 per cent, but we never think of what we need in 10 years or 15 years from now, not only in quantity, but also in quality. And unless we start switching over now we will not be able to make it in the next 15 years. For example, roads. Are we going to keep making these little pot-holed roads? Okay, we cannot afford to make motorways, but if we have to have these pot-holed roads, 15 years from now we will be in a total mess. I said roads because they are something we keep bumping on. Maybe we should cut back and have fewer roads but better roads where they are needed.’

He did have a plan in mind, he hinted in the interview. He said hard decisions would have to be taken as ‘we have been taking the soft line for a little too long, not so much the Centre as the states...This includes our states also... We have been subsidizing too many things.’ At that moment, he did look like a Mr Quick Fix with a slew of initiatives unfolded in the first few weeks of his tenure, but he was also pragmatic enough to plan long-term solutions.

Jobs were the main issue. ‘That is where the education system comes in, because you have to reorient it so that the jobs are different,’ he said. ‘We cannot in today’s world possibly employ the number of people, who we have unemployed, in industries. They have to come into information handling, they have to come into services, so the education must be such that there is a demand for that. There should be a shift in approach.

But before unrolling his approach, he had to get the states,where the problem actually lay, in sync with the Centre’s leadership. The upsurge of support during the Lok Sabha polls presented Rajiv with the opportunity of consolidating leadership across the country by persuading the governments of 10 Congress ruled states to ask to bring forward the Assembly elections, scheduled to take place in June, to March 1985. It was also the right time to give the Opposition another drubbing.

On 24 January, the Election Commission cryptically announced, ‘Countdown for the second general elections within 10 weeks has begun from today’, and issued the necessary notifications for polls for the state Assemblies of Bihar, Uttar Pradesh, Himachal Pradesh, Orissa, Maharashtra, Rajasthan, Karnataka, Andhra Pradesh, Sikkim, Madhya Pradesh and the Union Territory of Pondicherry. Polling was fixed to take place from 2 to 5 March.

It was to be, in a way, a mini general election with nearly 270 million of the country’s voters set to elect 2,534 of the total 3,997 MLAs in the country. In fact, it was for the first time since 1967 that so many Assembly elections were being held so soon after the Lok Sabha poll. Even then, both elections were held after a gap of about six months. The decision to go in for state elections was taken after a detailed study of the results of the Assembly segments in the Lok Sabha poll.

The results, however, did not match the ruling party’s expectations. Though the Congress retained power in most of its states, its vote share and the number of seats held by the party saw a big drop. The vote clearly was not influenced by the new Rajiv phenomenon at the Centre, but was swayed by local considerations and voters’ peculiar way of imposing electoral checks and balances on one-party consolidation across the country.

However, the mood soon swung back as Finance Minister Vishwanath Pratap Singh read out the maiden Budget speech of the Rajiv government later in March. Guided by a host of measures the Centre had already undertaken to usher fresh air into the economy, the Bombay Stock Exchange saw a mini boom. A large number of scrips rose by as much as 10 per cent and the price of gold shot up to Rs 2,120 per 10 gm, the highest recorded till then.

India’s leading tax expert Nani Palkhivala, speaking at his annual Budget analysis gathering at Brabourne Stadium, called it the best Budget ever presented in independent India. It was a novel experience, he said enthusiastically, to have a Budget in which there was ‘little to criticize, little to decry’. The Wall Street Journal headlined its editorial on the Indian Budget: ‘Rajiv Reagan’, comparing it to the liberal policies of American President Ronald Reagan. Renowned Leftist-socialist economist K.N. Raj said the Budget recognized that there are limits to how far fiscal and administrative measures could dictate how money should be spent without encouraging fraud and deception. The Budget, he said, also has ‘quite exceptional merit of forthrightness and clarity, without any attempt at camouflage or obfuscation’.

Moreover, for the first time since the tax system started to close in on the private sector, there was a broad game plan at work. As Palkhivala said, this is ‘above all, a Budget made by structuralists’. It was clear to the experts and the laymen that it bore the imprint of a mind at work, of someone who has sat back and ‘tried to fit all the parts together, to shed tired old cliches which have been bureaucratic mantras for so long and create a new, vigorous environment’.

The euphoria spread like wildfire. The Budget reflected, it was unanimously felt, Rajiv’s economic thinking, which sought to stimulate economic growth, create conditions for more efficiency, encourage talent and enterprise, and prepare the country for the 21st century.