Rao's term as Prime Minister was an eventful one in India's history. Besides marking a paradigm shift from the socialist-based style of economy propagated by Nehru to a market driven one, his years as Prime Minister also saw the emergence of the Bharatiya Janata Party, a major right-wing party, as an alternative to the Indian National Congress which had been governing India for most of its post-independence history. Rao's term also saw the destruction of the Babri Mosque in Ayodhya which triggered one of the worst Hindu-Muslim riots in the country since its independence.
Rao's later life was marked by political isolation due to his association with corruption charges. It was an apathy and indifference that Indian National Congress didn't stand by their long term associate who had been a Prime Minister of India. Rao was acquitted on all charges prior to his death in 2004 of a heart attack in New Delhi. He was cremated in Hyderabad.
PV's father was P. V. Ranga Rao. He belonged to a wealthy Telugu Niyogi Brahmin family from a village called Vangara (pedda),Bheema Devara pally mandal in the Karimnagar district of Andhra Pradesh, India.
Narasimha Rao was popularly known as PV. PV studied at Fergusson College and at the Universities of Mumbai and Nagpur where he obtained Bachelor's and Master's degrees in law. He was a polyglot and could speak 13 languages including Urdu, Marathi, Kannada, Hindi, Telugu and English with a fluency akin to a native speaker. His mother tongue was Telugu. In addition to seven Indian languages, he spoke English, French, Arabic, Spanish and Persian. Along with his cousin Pamulaparthi Sadasiva Rao, PV edited a Telugu weekly magazine called Kakatiya Patrika from 1948 to 1955.
Narasimha Rao has three sons and five daughters.His eldest son P.V Rangarao was as an education minister in Kotla Vijaya Bhaskar Reddy cabinet and M.L.A from HanmaKonda Assembly Constituency for two terms.His second son P.V.Rajeshwar Rao was a Member of Parliament from Secunderabad Lok Sabha Constituency.
When the Indian National Congress split in 1969 Rao stayed on the side of then Prime Minister Indira Gandhi and remained loyal to her during the Emergency period (1975 - 77). He rose to national prominence in 1972 for handling several diverse portfolios, most significantly Home, Defence and Foreign Affairs (1980-1984), in the cabinets of both Indira Gandhi and Rajiv Gandhi. In fact it is speculated that he was in the running for the post of India's President along with Zail Singh in 1982.
Rao very nearly retired from politics in 1991. It was the assassination of the Congress President Rajiv Gandhi that made him make a comeback. As the Congress had won the largest number of seats in the 1991 elections, he got the opportunity to head the minority government as Prime Minister. He was the first person outside the Nehru-Gandhi family to serve as Prime Minister for five continuous years, the first to hail from South India and also the first from the state of Andhra Pradesh. Since Rao had not contested the general elections, he then participated in a by-election in Nandyal to join the parliament. N.T.Rama Rao (then leader of the Chief Opposition party of Telugu Desam) did not want to put a contestant against Rao, because he was the First Prime Minister of India from Andhra Pradesh, and NTR did not want to create an obstacle on his path. By that, Rao won from Nandyal with a victory margin of a record 5 lakh (500,000) votes and his win was recorded in the Guinness Book Of World Records. His cabinet included Sharad Pawar, himself a strong contender for the Prime Minister's post, as defence minister. He also broke convention by appointing a non-political economist, Manmohan Singh as his finance minister.
Rao's major achievement generally considered to be the liberalization of the Indian economy. The reforms were adopted to avert impending international default in 1991. The reforms progressed furthest in the areas of opening up to foreign investment, reforming capital markets, deregulating domestic business, and reforming the trade regime. Rao's government's goals were reducing the fiscal deficit, Privatization of the public sector, and increasing investment in infrastructure. Trade reforms and changes in the regulation of foreign direct investment were introduced to open India to foreign trade while stabilizing external loans. Rao's finance minister, Manmohan Singh, an acclaimed economist, played a central role in implementing these reforms.
Major reforms in India's capital markets led to an influx of foreign portfolio investment. The major economic policies adopted by Rao include:
The impact of these reforms may be gauged from the fact that total foreign investment (including foreign direct investment, portfolio investment, and investment raised on international capital markets) in India grew from a minuscule US $132 million in 1991-92 to $5.3 billion in 1995-96.
Rao began industrial policy reforms with the manufacturing sector. He slashed industrial licensing, leaving only 18 industries subject to licensing. Industrial regulation was rationalized.
Rao energized the national nuclear security and ballistic missiles program, which ultimately resulted in the 1998 Pokhran nuclear tests. It is speculated that the tests were actually planned in 1995, during Rao's term in office, and that they were dropped under American pressure when the US intelligence got the whiff of it. He increased military spending, and set the Indian Army on course to fight the emerging threat of terrorism and insurgencies, as well as Pakistan and China's nuclear potentials. It was during his term that terrorism in the Indian state of Punjab was finally defeated. Also scenarios of plane hijackings, which occurred during Rao's time ended without the government conceding the terrorists' demands. He also directed negotiations to secure the release of Doraiswamy, an Indian Oil executive, from Kashmiri terrorists who kidnapped him, and Liviu Radu, a Romanian diplomat posted in New Delhi in October 1991, who was kidnapped by Sikh terrorists. Rao also handled the Indian response to the occupation of the Hazratbal holy shrine in Jammu and Kashmir by Pakistan-sponsored terrorists in October 1993. He brought the occupation to an end without damage to the shrine. Similarly, he dealt with the kidnapping of some foreign tourists by a terrorist group called Al Faran in Kashmir in 1995 effectively. Although he could not secure the release of the hostages, his policies ensured that the terrorists demands were not conceded to, and that the action of the terrorists was condemned internationally, including by Pakistan.
Rao also made diplomatic overtures to Western Europe, the United States, and China. He decided in 1992 to bring into the open India's relations with Israel, which had been kept covertly active since they were first established by Indira Gandhi in 1969 , and permitted Israel to open an embassy in New Delhi. He ordered the intelligence community in 1992 to start a systematic drive to draw the international community's attention to alleged Pakistan's sponsorship of terrorism against India and not to be discouraged by US efforts to undermine the exercise. Rao launched the Look East foreign policy, which brought India closer to ASEAN. He decided to maintain a distance from the Dalai Lama in order to avoid aggravating Beijing's suspicions and concerns, and made successful overtures to Teheran. The 'cultivate Iran' policy was pushed through vigorously by him. These policies paid rich dividends for India in March 1994, when Benazir Bhutto's efforts to have a resolution passed by the UN Human Rights Commission in Geneva on the human rights situation in Jammu and Kashmir failed, with opposition by China and Iran.
Rao's crisis management after the Mumbai blasts of March 12, 1993 was highly praised. He personally visited Mumbai after the blasts and after seeing evidence of Pakistani involvement in the blasts, ordered the intelligence community to invite the intelligence agencies of the US, UK and other West European countries to send their counter-terrorism experts to Mumbai to examine the facts for themselves.
Rao decided that India, which in 1991 was on the brink of bankruptcy, would benefit from liberalizing its economy. He appointed an economist, Dr. Manmohan Singh, a former governor of the Reserve Bank of India, as Finance Minister to accomplish his goals. This liberalization was criticized by many socialist nationalists at that time.
The Himalayan state of Jammu and Kashmir witnessed a separatist insurgency during Rao's tenure. His government claimed that training camps in Pakistan-administered Kashmir for militant groups, previously directed at evicting the Soviet army from Afghanistan, were now producing the same fighters who were infiltrating Kashmir. He directly charged Pakistan with sheltering, arming and supplying infiltrators. During this time Hindu pilgrims and Sikh settlers were attacked, and hundreds of thousands of Kashmiri Pandits were forced to leave their homes in the Kashmir valley. Violence rocked and shut down parts of Kashmir, which was heavily dependent on tourism, and also struck major cities like Delhi and Mumbai. Similar terrorism spread into the northeastern states of Assam, Tripura and Nagaland.
Rao's government introduced the Terrorist and Disruptive Activities (Prevention) Act (TADA), India's first anti-terrorism legislation, and directed the Indian Army to eliminate the infiltrators. Despite a heavy and largely successful Army campaign, the state descended into a security nightmare. Tourism and commerce were largely disrupted. Special police units were often accused of committing atrocities against prisoners, including torture and excessive detention.
Members of the VHP demolished the Babri Mosque in Ayodhya on 6 December 1992. The site is believed by many to be the birthplace of Sri Rama, on which India's first Mughal emperor, Babar destroyed an existing Hindu temple in the early 16th century. The destruction of the disputed structure, which was widely reported in the international media, unleashed large scale communal violence, the most extensive since the Partition of India. Muslim and Hindu fundamentalists indulged in massive rioting across the country, and almost every major city including Delhi, Mumbai, Kolkata, Ahmedabad, Hyderabad, Bhopal, and Chennai struggled to control rampaging mobs. It is widely believed that the 1993 Mumbai Bombings, which claimed hundreds of innocent lives and left thousands injured, was the Muslim underworld's retaliation for the demolition of the Babri Mosque.
A strong earthquake in Latur, Maharashtra, also killed 10,000 people and displaced hundreds of thousands in 1993. Rao was applauded by many for using modern technology and resources to organize major relief operations to assuage the stricken people, and for schemes of economic reconstruction.
The most negative aspects, though none of them turned out to be true, of Rao's legacy were his direct and indirect associations with various corruption charges. These charges were majorly viewed as fueled by those in his party who were opposed to his return as a major player again. Some of the more prominent examples were:
In July 1993, Rao's government was facing a no-confidence motion, because the opposition felt that it did not have sufficient numbers to prove a majority. It was alleged that Rao, through a representative, offered millions of rupees to members of the Jharkhand Mukti Morcha (JMM), and possibly a breakaway faction of the Janata Dal, to vote for him during the confidence motion. Shailendra Mahato, one of those members who had accepted the bribe, turned approver. In 1996, after Rao's term in office had expired, investigations began in earnest in the case.
In 2000, after years of legal proceedings, a special court convicted Rao and his colleague, Buta Singh (who is alleged to have escorted the MPs to the Prime Minister). Rao appealed to a higher court and remained free on bail. The decision was overturned mainly due to the doubt in credibility of Mahato's statements (which were extremely inconsistent) and both Rao and Buta Singh were cleared of the charges in 2002.
Rao, along with fellow minister K.K. Tewary, Chandraswami and K.N. Aggarwal were accused of forging documents showing that Ajeya Singh had opened a bank account in the First Trust Corporation Bank in St. Kitts and deposited $21 million in it, making his father V.P. Singh its beneficiary. The alleged intent was to tarnish V.P. Singh's image. This supposedly happened in 1989. However only after Rao's term as PM had expired in 1996, was he formally charged by the CBI for the crime. Less than a year later the court acquitted him due to lack of evidence linking him with the case. All other accused, Chandraswami being the last, were also eventually acquitted.
Lakhubhai Pathak, an Indian businessman living in England alleged that Chandraswami and K.N. Aggarwal alias Mamaji, along with Mr. Rao, cheated him out of $100,000.00. The amount was given for an express promise for allowing supplies of paper pulp in India, and Pathak alleged that he spent an additional $30,000.00 entertaining Chandraswami and his secretary. Rao and Chandraswami were acquitted of the charges in 2003, due to lack of evidence. Despite this, it remained a large black mark on Rao's administration.
In the 1996 general elections Rao's Congress Party was badly defeated and he had to step down as Prime Minister. He retained the leadership of the Congress party until late 1996 after which he was replaced by Sitaram Kesri. According to Congress insiders who spoke with the media, Rao had kept an authoritarian stance on both the party and his government, which led to the departure of numerous prominent and ambitious Congress leaders during his reign. Some of them were: Narayan Dutt Tiwari, Arjun Singh, Madhavrao Scindia, Mamata Banerjee, G.K. Moopanar and P.Chidambaram.
Rao rarely spoke of his personal views and opinions during his 5-year tenure. After his retirement from national politics Rao published a novel called The Insider (ISBN 0-670-87850-2). The controversial book, which follows a man’s rise through the ranks of Indian politics, resembled events from Rao’s own life. (See Gonzo journalism.) Rao, however denied any connection.
Rao suffered a heart attack on 9 December 2004, and was taken to the All India Institute of Medical Sciences where he died 14 days later at the age of 83.
He was cremated with full state honors. His body was kept in state at the Jubilee Hall in Hyderabad. His funeral was attended by the incumbent Prime Minister Manmohan Singh, former Prime Minister H. D. Deve Gowda, the incumbent BJP president L.K. Advani, the Defence Minister Pranab Mukherjee, the Finance Minister P. Chidambaram and many other dignitaries.