Book Excerpt: Economy Is Never Central, Politics Is - Yashwant Sinha’s Book Relentless

Extracted with permission from Relentless: An Autobiography by Yashwant Sinha, Bloomsbury India.

If Chandra Shekhar had, indeed, resolved the Ram Mandir issue, controlled militancy in Punjab and improved India’s relationship with Pakistan with its beneficial impact on the situation in Jammu and Kashmir, he would have truly become a ‘man of destiny’ for India. In addition, the budget I was about to present would have been a reformist one and would have changed the economic landscape of India. In the end, the story of the Chandra Shekhar-led government may well go down as one of missed opportunities amid endless possibilities. His biggest failure was that he started succeeding.

The Congress first decided to stall the presentation of a regular budget because it would have further enhanced the prestige of our government. They began spreading rumours about how I was preparing a very tough budget and began expressing their concerns regarding the same. When Chandra Shekhar heard this, he asked me to talk to the Congress Party. I happened to meet Rajiv Gandhi at an official function, where I told him that I would be happy to consider suggestions from the Congress, adding ‘Who should I contact for this?’ Rajiv Gandhi immediately suggested I speak to Pranab Mukherjee.

I invited Pranab Mukherjee home for lunch. We had a general discussion on the economic challenges facing the country and the overall approach I had in mind for the budget. Mukherjee was sympathetic, pleasant and extremely friendly. I was happy with the meeting but, obviously, Rajiv Gandhi was not. He decided to prevent me from presenting a regular budget. His suggestion that I should present only an interim budget, followed by a Vote on Account, was subsequently conveyed to Chandra Shekhar.

The news was a bolt from the blue for me, for I knew the consequences of not presenting a regular budget. I voiced my views frankly, almost bluntly, in a meeting of the Cabinet, but my pleas fell on deaf ears. It was decided that I should present an interim budget only. Saving the government was more important than saving the economy, I was told. In fact, I was most disappointed with Chandra Shekhar’s attitude. He was the only other person in the government, apart from me, who fully understood the consequences of such an action and, yet, decided to accede the Congress party’s highly unreasonable demand.

I was sorely disappointed by the overall attitude of the Congress. Here we were, facing the worst post-Independence economic crisis, largely created by the Congress itself, and all it could think of was politics and its own electoral prospects. Economics is a politician’s last priority in India, as I realised then, and on many occasions later.

On my return home, I penned a hand-written resignation letter, requesting Chandra Shekhar to relieve me of my responsibilities. I stopped going to office, returned my official car and even stayed away from an Iftaar party that Chandra Shekhar hosted a couple of days later at his Race Course Road residence. He probably felt equally upset at my resignation, but it was only when I did not turn up for the Iftaar party that he realised the seriousness of my intentions and decided to deal with the matter directly. He sent his private secretary CB Gautam to my residence, who insisted that I accompany him to 7 RCR.

I acceded to his request and went to 7 RCR. When we met, Chandra Shekhar enquired about my health. Then he told me that my resignation would lead not only to the resignation of the entire government, but also affect the party’s two state governments in UP and Gujarat. He requested me to give him more time to settle matters. He then proceeded to tear up my resignation letter in front of me, quite dramatically I must add. I had no choice but to give in. I could never say ‘no’ to him

The interim budget could only be a routine one, at best, but I still included some innovative ideas in it. Even the presentation of a routine, interim budget faced stiff opposition from the leaders of various parties in the Lok Sabha. For me, the situation was extremely disagreeable. But it seemed that a single sacrifice, however major, was not going to be enough to satisfy the Congress. It was, as I had suspected, determined to bring the government down on some pretext or the other. That is exactly what happened a few days later when the Congress accused the government of spying on Rajiv Gandhi by posting two Haryana constables outside his house. The party decided to absent itself from the Lok Sabha during voting on the Motion of Thanks to the President for his address to Parliament.

Clearly, its intention was to force Chandra Shekhar to resign. In fact, the evening before, in anticipation of the move, I had strongly pleaded with Chandra Shekhar not to give in to the Congress’s pressure and resign with dignity instead. That is exactly what he did the following day in Lok Sabha. He replied to the debate on the Motion of Thanks on 6 March 1991 and, at the end of his speech, announced his resignation four months after he had taken office.

The ill-fated experiment of forming a government with the help of the Congress party had failed once again. Nobody expected a government with only 60 MPs in Lok Sabha to last for long. But the government was formed on the basis of a clear understanding that it would be allowed by the Congress party to last for at least one year. This was the understanding that was conveyed by it to President Venkatraman as well.

The unstated understanding was that the SJP would merge with the Congress party after a year and it would then become a Congress party government, which would complete its full term. Rajiv Gandhi perhaps felt that if Chandra Shekhar succeeded as prime minister, given the wily politician that he was, it would become difficult to replace him. This became the chief cause of his angst and he decided to nip the whole thing in the bud by withdrawing support, at what he may have considered the most opportune time.

It’s Politics, Stupid!

This episode taught me two very important lessons. The first was that, in India, the economy is never central. Politics is. Always. Our politicians and leaders do not care about economics, the fiscal health or the future of the country. For them politics itself is of supreme importance; it is political expediency that tends to dominate the discourse and nothing else. We narrowly escaped the economic crisis of 1991; the next time around, we might not be so lucky.

The second was about trusting the Congress party. Should Chandra Shekhar have put his faith in the Congress in the first place? The Congress had been responsible for the split in the Janata Party in 1979, given its encouragement to Choudhary Charan Singh to break away and form a government with Congress support. Predictably enough, it went on to withdraw that, which led to the fall of the government and fresh elections.

History repeated itself with Chandra Shekhar in 1991, with Deve Gowda in 1997, and with IK Gujral in 1998. The Congress played the same game with the government of Atal Bihari Vajpayee in 1999, by manipulating the AIADMK that time. Trust in politics is a rare commodity and the Congress party would have to improve its record if it wants to be trusted in future.

Years later, I remember, a meeting of the BJP’s National Executive in Lucknow that I was unable to attend for personal reasons. An enterprising journalist from The Asian Age newspaper wrote a report that I was not in attendance because I was planning to quit the BJP and join the Congress. I called Seema Mustafa, who worked for the newspaper, and told her that I would rather commit suicide than join the Congress—a statement she promptly published the very next day.

Not only the government and I, personally, but the entire nation went through extremely harrowing times after the resignation of the Chandra Shekhar government. As part of the caretaker government, there was nothing much that I could do except plead with foreign lenders and foreign governments to help India in its time of need. Th is is what I had done during my visits to Washington and Tokyo.

Ultimately, we were forced to mortgage our gold reserves to get a few dollars so that there was still some foreign exchange left when the new government was sworn in. I could have done without mortgaging the gold, but that would have been highly irresponsible. As an Indian, I felt ashamed and humiliated, and vowed never to fi nd myself in such a position ever again. My experiences from this period are fully chronicled in my 2007 book, Confessions of a Swadeshi Reformer.

In the general elections that followed the fall of the Chandra Shekhar government, my friends in the party and outside advised me to contest from Patna. Contesting against me were IK Gujral from the Janata Dal, CP Thakur from the Congress and Shailendra Nath Srivastava, the sitting MP from the BJP—the last being a close relative as well. Lalu Yadav was the CM of Bihar at that time.

It was a closely contested election. I worked as hard as I could, but my party was clearly weak, and we lacked effective party cadres. Lalu Yadav’s workers looted many booths, even in Patna town, to help Gujral.

At the end of the day, all candidates, barring Gujral, complained bitterly to the Election Commission against the high-handedness of the Janata Dal workers and the rigging of the election. TN Seshan, who was now the chief election commissioner, countermanded the election following our complaints of large-scale rigging. I remember Chandra Shekhar was transiting through Patna that evening after campaigning in Bihar, and both Lalu and I were at the airport to see him off . I made it plain to Lalu that I was not happy to see him. He mentioned this to Chandra Shekhar, arguing that I had no reason to be cross with him as I was set to lose the election anyway. ‘It is hardly the justification for his rigging the election,’ I remember telling Chandra Shekhar.

On my return to Delhi the following day, I was in for a great shock when I arrived at the airport. My driver informed me that Rajiv Gandhi had been assassinated, while campaigning for the elections. For a moment, I could not believe it. The news left me stunned. I was told that the plane that was flying Sonia Gandhi to Chennai, where the assassination had taken place, was about to take off from the technical area of Palam Airport.

The death of Rajiv shocked the entire world. Since only a part of the elections had taken place so far, it led to the postponement of the remainder by a few weeks. This only extended my personal agony of managing the Indian economy on a shoestring. The gold mortgage story had already broken, and, like Banquo’s ghost, it shadowed me wherever I went for years to come. In fact, it still does.

The only saving grace, perhaps, was that I had managed to prevent India from defaulting on its external loan commitments during this difficult period. Had I not done so, India would have truly become a basket case. It would have been like a run on a bank and we would have taken much longer to recover. I was most relieved when PV Narasimha Rao was finally sworn in as the new PM, and Dr. Manmohan Singh, who had served as Chandra Shekhar’s economic adviser, became the finance minister.

Extracted with permission from Relentless: An Autobiography by Yashwant Sinha, Bloomsbury India.

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