Chandra Shekhar: Stooge of the Congress
He took over a government destined to fail, but his seven-month stint as Prime Minister (1990 to 1991) witnessed extreme turbulence. It also saw him pledge the country’s gold to bail it out of an economic crisis.
Chandrashekhar's govt was a marriage of convenience between him and Rajiv Gandhi's Congress and its allies. It was formed with 60 breakaway Janata Dal MPs & supported by the Congress and its allies. The aim was to ease out a common political enemy, V P Singh.
Chandrashekhar was persuaded to dismiss the DMK government in Tamil Nadu for its alleged links with the LTTE. He was then asked to go slow on the CBI investigation into the Bofors scandal, which had Rajiv Gandhi in the spotlight.
Chandrashekhar was at the helm when the Mandal Commission reservations in govt jobs triggered caste and communal riots in the Hindi belt. In retaliation, BJP President L K Advani led a Rath Yatra, stirring Hindu sentiments and uniting Hindus. Hundreds more died in riots.
The economy was in a shamble. Chandrashekhar’s predecessor V P Singh had announced a massive loan waiver for farmers. There was rising domestic and foreign debt, depleting foreign exchange reserves and a severe liquidity crisis.
Three months before Chandrashekhar’s appointment, the Gulf War broke out in 1990, sending oil prices skyrocketing. There was also a drastic decrease in Indian exports to the Middle East, worsening India's balance of payments problem.
Things were so uncertain that Finance Minister Yashwant Sinha could not present the Budget in February. Nor would financial institutions like the World Bank lend money as India hadn’t committed to any structural reforms.
So, the govt pledged 20 tons of gold through a sale and repurchase option, to raise $240 million from the Union Bank of Switzerland. After three more rounds in 1991, a total of 47 tons of gold were pledged by the next government. Leasing gold had raised $400 million.
The deep malaise that had set into the Indian economy saw the next government led by P V Narasimha Rao of the Congress setting in motion a liberalisation programme that not only revised the economy but altered its destiny.
In March 1991, the Congress alleged that two plainclothes constables from Haryana were snooping on Rajiv Gandhi and demanded that the Haryana govt, headed by Chandrashekhar's party, resign. Chandrashekhar himself resigned as Prime Minister.
Cover Image: The Print
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