Vinay Sitapati on Liberalization and Narasimha Rao

In this episode, Shruti speaks with Vinay Sitapati about Narasimha Rao’s socialism, his working relationships with Manmohan Singh and others, how his skills as a translator were useful in his career, and much more. Sitapati is a political scientist, lawyer and journalist. He has a Ph.D. from Princeton University and degrees from Harvard University and the National Law School of India University, Bangalore. His first book, “Half-Lion,” was a best-selling biography of P.V. Narasimha Rao. Sitapati teaches at Ashoka University, near Delhi.

SHRUTI RAJAGOPALAN: Welcome to Ideas of India, where we examine the academic ideas that can propel India forward. My name is Shruti Rajagopalan, and I am a senior research fellow at the Mercatus Center at George Mason University. Today my guest is Vinay Sitapati, who is the associate professor of political science and legal studies at Ashoka University and the author of the books Half-Lion and Jugalbandi. We talked about his biography of former Indian prime minister P.V. Narasimha Rao, an unlikely leader and reformer, set in the broader context of how Rao orchestrated India’s liberalization, his failures, decentralization and participatory democracy, coalition governments and anti-defection in India and more.

For a full transcript of this conversation, including helpful links of all the references mentioned, click the link in the show notes or visit mercatus.org/podcasts.

Hi, Vinay, thanks so much for coming on the show. I’ve been looking forward to this conversation for a very long time.

VINAY SITAPATI: Same here. I’ve been following the Mercatus Center, and for a long time we’ve been discussing why Narasimha Rao is a central figure and also your India after 1991 Project. It’s very much a fit. Thank you very much. I know this is going to be a lot of fun.

RAJAGOPALAN: Great that you started with that 1991 moment. A lot of how we thought about Rao was thanks to your book [Half-Lion], because we don’t have a chance to speak with him. And there aren’t actually too many biographies about someone who’s quite a central figure in Indian politics. Your book was incredibly helpful.

Rao, A Centrifugal Force

RAJAGOPALAN: The way I think about Narasimha Rao’s legacy is that he was the first among the long line of Indian prime ministers to step away from this overwhelming executive centralization that we see in India. In a sense, he’s not centripetal, and the two big data points I have characterize his legacy in this way. One is, of course, the 1991 reforms where India not only started looking outward, but the internal reforms were also very important, which is the dismantling of License Permit Raj and allowing market prices and market-based allocation to function in India.

 

The other is a bit of Rajiv Gandhi’s legacy—but really Narasimha Rao was the one who pushed this through—the 73rd and the 74th Amendment, which introduced a whole layer of participatory democracy in India. And that’s also formed the foundation for a different kind of welfare state in India. Both these things make me think that he was walking away from that kind of very centralized-planning-commission, social-engineering thinking into a much more decentralized thinking. Is this a good way to think about Narasimha Rao in terms of his long-term legacy?

SITAPATI: I think that’s right. I think you really put the finger on the issue. The only caveat I’d put is that from the early 1980s, Indian prime ministers have realized the importance of letting the state recede a little bit, letting markets function. When it comes to democracy, letting local democracy work instead of overbearing diktats from Delhi. I would say that the idea was not Narasimha Rao’s at all.

Narasimha Rao, for those of you who are not India focused, was prime minister of India from 1991 to ’96. But prior to that, he had almost 40 years, if not more, of public service where he was a premier of a state. He was a state minister. He was a union minister for nearly a decade. He was seeped in the old socialist way of thinking of India. I wouldn’t say that what I would give him credit for is the ideas to implement what you said; it’s the actual political will to implement and the political guile to get it through.

To give you just one example, Shruti, industrial delicensing, which is reducing barriers for domestic entrepreneurs in India to manufacture—the idea that the Indian state needed to recede to the background, even Prime Minister Indira Gandhi’s mandarins in the early 1980s—L.K. Jha, for example, Abid Hussain—understood.

By the time you come to several other prime ministers—Rajiv Gandhi, Chandra Shekhar, V.P. Singh—everybody understood this, and they even tried a little bit like Rajiv Gandhi in 1985 when he comes to power. And in 1985, he begins to make changes to the open general license, for example. He was seen as the most reformist, pro-American, pro-market prime minister until then.

What makes Rao different is not the ideas. In fact, he was a late convert. It is the ability to execute. Rajiv Gandhi had the greatest mandate any prime minister has had in Indian history. The moment corruption allegations split within his party, the usual turbulence any prime minister faces came. Rajiv Gandhi retreated. He was an ingenue; he was naive. He didn’t understand how politics function, and then he moved back to his protectionist self.

While Chandra Shekhar and V.P. Singh, the two prime ministers after him, also understood the importance of opening up the economy, their political ability to last was low. They lasted less than a year each. Narasimha Rao’s genius was he was able to last a full five years despite being a minority government and, during these five years, bring about a huge period of change.

As my book points out, there is a heavy component of economic change, but there’s change in the welfare architecture, change in foreign policy, change in defense, change in the nuclear program. Also, Shruti, I think the 1991 moment is important. There’s a big bang, but a lot of changes in India in the economy also happened after ’92 when the crisis recedes. Banking deregulation, for example; opening up the Indian airways to private sector airplanes, for example. Opening up telecom to both domestic private as well as foreign private players.

RAJAGOPALAN: Broadcasting.

SITAPATI: Exactly, broadcasting.

There was a huge change that happened. You’ve chronicled that on your website. But Narasimha Rao, he was also a marathon runner. He wasn’t just a 100-meter specialist.

A Conversion From Socialism?

RAJAGOPALAN: I think you’ve raised a lot of very interesting areas we could go into, but I want to stick with the ideas part of it. I completely agree with you that a lot of these ideas were in the air, starting with Bhagwati, T.N. Srinivasan and Padma Desai started thinking this in the late ’70s. In the ’80s, as you mentioned, there’s a number of committee reports, whether it is deregulating cement, deregulating sugar, how we think about tariffs. It’s in the air. And then of course, we have this open general license. We have broad banding. Something as simple as broad banding managed to unleash so many percentage points of growth in the GDP is remarkable. That’s how shackled India was.

Having said that, very few people are going to put their political clout behind an idea they don’t believe in. What is it about Narasimha Rao that either made him want to change or transition away from socialism and embrace some of these more market-friendly ideas, given how he’d been a lifelong Indian socialist, a very typical Indian Congress socialist, fully entrenched in protectionism? One is how that transition happens.

And the second reason I ask that is also because, as you pointed out, the crisis portion is over by mid-1992. That crazy macroeconomic instability, the currency crisis, all that is sorted. If he really just turned capitalist for the sake of the crisis, he could have easily just stopped that program, especially after the Harshad Mehta scandal when there was so much pressure to U-turn on liberalization. But he doesn’t do any of that, which makes me feel like somewhere down the road, he imbibed ideas even if he didn’t invent them or propagate them to begin with. Can you talk a little bit about that?

SITAPATI: Shruti, the economic protectionism of India, the economic socialism of India—some would say from the Nehru period but certainly from the Indira period, so the mid-’60s to the early ’80s—was of a piece with several other policy choices that the Indian policymakers had made. It wasn’t just that on every other subject they were not socialist but only on the economy, they were socialists. For example, when it came to foreign policy, it was—in the ’60s and ’70s, especially, and even in the early ’80s, though that is changing—a pro-Soviet, anti-American foreign policy.

A lot of the political rhetoric unrelated to the economy was on populist rhetoric. I use the word rhetoric advisedly because the schemes weren’t really there. In fact, ironically, the schemes that reduced poverty in India came only after you got free-market reforms. The two went hand in hand. All of that was of a piece. The Narasimha Rao of the ’60s bought all of that. He was a Nehruvian; he bought Nehru’s worldview.

But by the time we hit the early ’80s, he’s foreign minister of India twice. He’s defense minister. He begins to see that on defense, on foreign policy, on welfare schemes, India needs to change. Those pieces of the socialist puzzle, he begins to see that the ideas backing it were a problem and that he needed to change. The problem for me as a biographer is I found no evidence that, when it came to the economy, he had had an aha moment where he changed his ideas in the ’70s or ’80s. I found no evidence of that.

What I did find was that, even though Narasimha Rao had held practically every ministry in the state of Andhra Pradesh (where he also became the state premier), as well as the national government, he had never held an economic portfolio. He never held finance, industry, commerce. He had vague socialist ideas. They hadn’t been challenged, and it didn’t really matter because he was home minister in charge of internal security, he was defense minister, he was education minister, but he was never really holding any economic position.

He had bad ideas, but those ideas never had to be implemented by him. I came to the conclusion—and it’s an inescapable conclusion, Shruti—that he didn’t have strong views on the economy. To the extent he had socialist views, basically he flipped on a dime in June 1991.

Before that, before the cabinet secretary Naresh Chandra handed him a several-page blueprint saying, “Look, this is the economic changes we need. India is facing a crisis,” he’d never really thought about the subject. Now all that we know about his life is he was an intensely bright, intensely curious person, so the moment he’s told that, he spends the week after reading up on the economy. Much more importantly, and I hope we discuss this in some detail, choosing the right people who understood the economy.

For him, it wasn’t that he should know about the economy, but who are the people who should? Even when he selects Manmohan Singh, or before that he wants I.G. Patel, he says, “Look I want to pick”—and says this to his aide—“I want to pick somebody who is acceptable to the West.” He says that. I would say that he became a convert to the idea that when it comes to the economy, free market is what works. He really came to that in June ’91.

What I find even more remarkable was that once he figured it out, once he understood, he realized he had to move, and he moved very, very fast. This was a man who spoke 10 languages. He was a scholar. He could have easily been an academic. I worry that that portrayal of the man makes him sound like a theoretician, but he wasn’t. He was also somebody who knew how to act very much. He wasn’t just Hamlet, he was also Don Quixote.

Working With Manmohan Singh

RAJAGOPALAN: I’m so thrilled we came to the part of assembling the team. This is really remarkable. I feel now, in hindsight, that Narasimha Rao might have been one of the great scouts of talent within the Indian government, in the following sense. If you think about his choice for finance minister, the way you mention that Narasimha Rao himself had held various portfolios at the state level, then becomes the chief minister, held different portfolios at the union level and all this experience before he became prime minister.

In fact, he was even stood to be a member of parliament from three different states, campaigning in three different languages. He’s just quite remarkable. No other Indian prime minister really comes from that kind of a background. In fact, most of them don’t even have much to say beyond either the Delhi environment or beyond—they’ve been the chief minister of one state, and that’s about all the experience they have. Maybe other than H.D. Deve Gowda, I can’t think of too many people who fit that description.

Now I’d like to draw a parallel to Manmohan Singh. Manmohan Singh, before he became finance minister, had served in every single technical position as an economist that the Indian government had to offer. Something tells me now, in hindsight, that that is one of the reasons these two people worked so well together. They were able to delegate to each other. They somehow had a very similar way of thinking about how to act on policies. Is this a good description of the pair and what may have been the catalyst for political implementation which was just stuck before their time?

SITAPATI: I would say they had complementary skills in the following sense, and they understood that very well, which is that Manmohan Singh was a technocrat and he played up that role. Even though he, as you said, had held every position, the five positions, the economic levers of India he had held. He had been finance secretary; then, of course, he was finance minister ’91 to ’96; deputy chairman of the planning commission; governor of the RBI and chief economic adviser, he held all of that.

He was a consummate insider, but he was a technocrat. He was a technocrat in the sense that he would ascertain what the politician wanted and what mandate the politician gave him, and he would stick scrupulously to that mandate. Politicians trusted him. He was not the kind of person who would take the glory for himself. When a politician gives him an inch, he would not take a mile. He wasn’t that person at all.

Narasimha Rao, on the other hand, was very confident about the fact that he didn’t know about the economy; he wouldn’t be second-guessing Manmohan Singh. He would let Manmohan Singh work the way he wanted to work, and he would manage the political fallout. I think that’s what made it work, and Manmohan Singh was an unusually honest man. I would say Narasimha Rao was an unusually dishonest man. He is a contradictory man. He wasn’t interested in money for himself.

RAJAGOPALAN: Not corrupt, but I know what you mean.

SITAPATI: He was not corrupt in the personal sense, but he definitely bribed MPs to remain in parliament. Even he had no scruples on that stuff, none. Manmohan Singh had tons of scruples. Manmohan Singh would not meet industrialists because he would say that it would violate a red line. Narasimha Rao—I found in his papers—he’s meeting Dhirubhai Ambani; he’s meeting various businessmen. That’s what made that couple, an honest technocrat and a wily politician, work together. After June ’91 they both were on the same page in terms of what needed to be done.

As you know, Manmohan Singh wasn’t the only person he hired. When Narasimha Rao realized that the economy had to be changed, the first thing he realized was that the central change was to industrial policy, to remove not external liberalization but internal liberalization, to allow the Indian public sector to boom. Which is why he kept the industry ministry for himself. A lot of people overlook this, but he said, “What is the main reform to be done in ’91? If it’s to do with industrial delicensing, I’m going to keep the ministry to myself.”

Then he chose a principal secretary, arguably the most powerful bureaucrat in any government. If my memory serves, A.N. Varma was an ex-industry secretary and had a reputation of being reformist and lacked Manmohan Singh’s scruples, so he was a ruthless man. He knew how to get the bureaucracy behind the change. Manmohan Singh wasn’t like that at all.

Then he hired his commerce minister, P. Chidambaram, who was a well-known reformer. He was quite young at the time. Then he selected the man to regulate the capital markets, G.V. Ramakrishna, to become the head of the Securities Exchange Board of India. Again, a man who was scrupulous, who he felt would bring order to these stockbrokers who were going out of control. He thought through it. It wasn’t just off-the-cuff kind of choices. Manmohan Singh and Narasimha Rao have to be seen as members of a larger team.

RAJAGOPALAN: You’re absolutely right. A.N. Varma, Rakesh Mohan had, during their time in the industry ministry as bureaucrats and technocrats, already created most of the blueprint for industrial deregulation, the dismantling of the License or Permit Raj.

SITAPATI: I would even say all of it.

RAJAGOPALAN: All of it, yes.

SITAPATI: What does Narasimha Rao do to that document? All he does is he changes the preamble.

RAJAGOPALAN: Some political rhetoric.

SITAPATI: That’s right. He just changes the preamble to say that industrial delicensing is what Nehru wanted. It’s just Indira Gandhi went too far, so he’s just restoring the position to Nehru. Just complete rubbish. The heart of my book “Half-Lion,” Shruti, is to make the argument, that’s what reform required. The ideas were already there. Even not just intellectuals and academics, but even bureaucrats had understood the importance of deregulation, the importance of opening up the economy to the market. But there were too many vested interests, and you needed a politician with the guile to make his way through these vested interests and push liberalization forward.

RAJAGOPALAN: On this, one of the other things I find quite remarkable about Narasimha Rao is, a lot of the people on the ’91 reforms team, whether it is Montek Singh Ahluwalia or Jairam Ramesh, there are a lot of people he inherited from previous governments.

SITAPATI: That’s right.

RAJAGOPALAN: Montek Singh had actually written the document for Rajiv Gandhi.

SITAPATI: That’s right.

RAJAGOPALAN: Which eventually found its way to V.P. Singh and Chandra Shekhar’s government. Now we hear murmurs, and maybe there’s some truth to it that Yashwant Sinha’s budget speech, had the government not fallen, was actually remarkably similar to the speech that Manmohan Singh ended up giving.

SITAPATI: That’s right. He says that. Yashwant Sinha writes that in his memoirs. That’s right.

RAJAGOPALAN: Exactly. It’s quite remarkable that for someone who was such a Congress man and such a Delhi insider, but not with a cronies group or with close friends, he was quite a lonely man. But he knew how Delhi worked, but he was very willing to work with people who had worked with other governments. This is something which is in sharp distinction to both Indira Gandhi, Rajiv Gandhi, people before him, and also modern-day India. Where once a new government comes in, suddenly there are these huge changes in bureaucracy, and the continuity starts breaking down.

What Narasimha Rao figured out is, who are the people who believe in what I need to do, but will also keep continuity of government in a way that things can proceed and things can proceed quite quickly without having this huge structural break because there’s a change in government and a change in ideology.

A Civilizational View of India

SITAPATI: No, you’re absolutely right, Shruti. I think it’s something that made him rare. It’s a rare talent, which is that he wasn’t petty on these things. I think if I ask myself why he was like that, he had a civilizational view of India. Let’s just take a step back, Shruti, from his political acumen and look at his cultural and literary acumen.

He was a man who knew ten languages. Every time when he used to get out of power, he used to go to Jawaharlal Nehru University and learn Spanish, for example. He knew Urdu and Persian very well, and he translated from Marathi to Hindi and from Telugu to Hindi, so he translated in multiple languages. It gave him a civilizational view of India, in a sense that while India needed radical change, there also had to be a thread of continuity. I think he took that to his view of the opposition also.

People like V.P. Singh and Chandra Shekhar, keep in mind they were Congress men at one time and had worked closely with Narasimha Rao. He appointed to cabinet rank Subramanian Swamy, who was a commerce minister in the previous government. Even people like Chidambaram, Manmohan Singh, Montek Singh Ahluwalia, these were not his men. He didn’t think like that. Maybe A.N. Varma is the closest to being Narasimha Rao’s man.

I think because he was a lonely man, because he was intellectually quite confident in his own abilities, he never felt overshadowed by bureaucrats or by other politicians. He was never worried that they would steal his thunder. His rise in the Congress system was because he didn’t have a faction or a coterie or cronies or yes-men around him. That made him less threatening to other people.

As a consequence, even as a prime minister, he never sought to build a personalistic team. By the way, he suffered for this because in ’96, once he stepped down as prime minister, and soon after, when he stepped down as Congress president, there was nobody out there to support him. He had never gone out of the way to cultivate a friend circle or an admirer circle. Once he left power, he once again was a lonely man.

RAJAGOPALAN: I almost feel like that’s a gift when it came to the reforms. I’m thinking about this from the larger view of political economy of reforms more generally. What I find is even someone like Rajiv Gandhi, who is very reform-minded, he was friends—almost too close—to a lot of the industrialists and their children. They had gone to Doon School together or vacationed in London together. The moment you start trying to do something radical, your inner circle starts whispering in your ear that this is not quite a good idea.

SITAPATI: That’s right.

RAJAGOPALAN: Whereas I think Narasimha Rao’s support for technocrats and having technocrats help guide his decision is almost because personally, he’s such a weird, lonely guy and not surrounded by sycophants or surrounded by this close friends’ circle who also turn advisers and things like that.

SITAPATI: He didn’t have any of that. Look, he was intellectually confident. He didn’t need a circle of admirers to tell him what to think. Here was a man who had spent almost 50 years in politics holding every lever of the Indian state from the regions all the way to Delhi, so he didn’t need that. He was a lonely man. Look, he had some advisers, he did have some friends—Kalyani Shankar, Chandraswami the Tantrik.

I would say they were friends to some extent, but I don’t think there was anybody who could influence Narasimha Rao’s thinking on politics. I can’t think of a single person who would tell Narasimha Rao and Manmohan Singh say, “Yes, I will do it.” There wasn’t a single person like that.

RAJAGOPALAN: That is really remarkable. For a job that requires the kind of delegation like the prime minister’s office, it’s really quite remarkable that nobody is able to influence his decision, other than technical expertise that he has full faith in.

SITAPATI: That’s right. I think that’s right. I agree with your argument—I don’t have it in the book; it’s all your argument. That lack of friendship gave him the leg room to swivel 180 degrees. But someone who was more invested, who had businessmen, friends, this, that, those kind of people, it’s hard for them to be revolutionary.

RAJAGOPALAN: Yes. It could have also gone easily wrong when you don’t have a sensible set of advisers. Which is why I think your previous point about being able to pick a really good, talented team comes in. He could have also surrounded himself by quacks and then refused to be influenced by anyone else, in which case things could have gone south quite badly.

SITAPATI: I think it sounds a bit boring and conservative, but the lesson of Narasimha Rao is there isn’t a substitute for IQ and experience. He had both of them in great measure. That just gave him an intellectual confidence that is of a different order than most prime ministers of the day.

I mentioned in the book that I found notes which, for example, the Indian ambassador to China is sending back to him on China. And Narasimha Rao, in the margin in his handwriting, is correcting it, is pushing back. He’s saying, “No, you don’t understand Chinese history.” Now, look, the Indian ambassador of China is a country expert, right?

RAJAGOPALAN: Yes.

SITAPATI: Prime ministers don’t normally argue with that person. They accept that advice. Narasimha Rao, he respects the advice, but he’s able to push back. He’s able to argue on welfare schemes. He had a fantastic team. They were all left-leaning, all of them, so that just tells you the contradiction of the man. Two of them, B.N. Yugandhar and I think K.R. Venugopal, is the father and father-in-law of Satya Nadella, who now runs Microsoft, right?

RAJAGOPALAN: Yes.

SITAPATI: I have a story in the book about how Narasimha Rao gatecrashes the wedding reception of Satya Nadella. He hasn’t been invited, but he wants to send a signal to Satya Nadella’s dad and father-in-law that he’s still on their side—even though he’s supporting the economic reformers, not the socialists.

This is Narasimha Rao. He doesn’t give the socialists what they want, but he shows up unannounced at their son’s wedding. He had this range of people, but at each point he was able to argue with them as an equal. He was able to push back and yet take their advice, and that I put it down to IQ and experience.

The Translator

RAJAGOPALAN: Yes, I would actually add to IQ and experience that he was a linguist. I don’t know what it means to know 10 languages and to be able to translate fluently out of at least four or five of those languages. By the way, 10 languages that humans speak. He also learned some computer languages.

SITAPATI: He knew Cobol, Basic, and he could code in Unix.

RAJAGOPALAN: Yes, which I find really remarkable. This was when he was already 60 years old or something, he just picks up a computer and starts doing this to get in favor with Rajiv Gandhi and Sam Pitroda and those guys. I think something about being a linguist of his caliber also adds to the political acuity because you know something about messaging and signaling. You know what translates well from one language to another, which must also mean you have some acute understanding of how something translates for one group versus another, even in the same language.

I know you said he’s not an economist. I found it remarkable that when he gets the opportunity to look at something, create new portfolios like the Ministry of Human Resource and Development, he’s very clear not to include labor in it because he understands transitional games traps. He understands that the interests of incumbent labor are very different from interests of labor who are just waiting outside the door and need job creation, and there’s no point in pitting these interests against each other.

You see this again happening when the foreign investment development is kept under the prime minister’s office immediately post 1991 because of the realization that this needs to be a clearance right at the top. Otherwise, all the typical bureaucratic nightmare of things getting stuck in different ministries is going to start happening to the big liberalization moment.

Something about understanding people’s incentives and being able to translate, I find quite remarkable. Do you know much about his life as a linguist and how that informs this character trait? Or something from his family about his ability to translate things?

SITAPATI: I had originally wanted to call the book not “Half-Lion” but “The Translator” because he has said this before: that translators, what they do is that they don’t just translate the text. But in translating the text, they bring something of their own to the table, right?

RAJAGOPALAN: Yes.

SITAPATI: Now, here’s the contradiction about Narasimha Rao, Shruti, which is, at one level, he lacked charisma. While he spoke in 10 languages, the joke was he knew how to be silent in 10 languages. He didn’t speak; he used to pout. He didn’t open his mouth much; he lacked charisma. He wasn’t that kind of politician, but he knew how to say without saying, how to signal.

He knew how while he was moving economically to the right, how to constantly talk as if he was economically to the left. He knew how to send those signals, and by the way, he notices—and I think that comes from his language and his linguistic abilities—he notices exactly this about Deng Xiaoping. He’s written, and I quoted it in the book, and he says, “Look, what’s remarkable about Deng Xiaoping is that he has the ability to radically change a system, all the while pretending to continuity and talking to continuity.

To give you just another example, one of—I would say his favorite Telugu poem was a 14th- or 15th-century poem, if my memory serves—one of those centuries—where if you read it one way, it’s the story of the Ramayana, which is a very popular Hindu epic. You read the same sentence another way, it’s the story of the Mahabharata, which is a completely different Hindu epic. Narasimha Rao says that Deng Xiaoping reminds him of exactly that.

It’s the words and how you put the words that matter, and Manmohan Singh understood this completely. Which is that when liberalization is happening, and the Congress men themselves are furious, saying that “you’re going against socialism, you’re going against Nehru’s legacy, you’re going against Rajiv’s legacy,” Narasimha Rao and Manmohan Singh both defend liberalization saying, “No, it’s part of Nehru’s legacy.” Manmohan Singh even says that, “Look, the ’91 manifesto that we had that had been written under the overlordship of Rajiv Gandhi actually says what we’re implementing.” It didn’t, but Manmohan Singh was able to craft sentences here, sentences there and tell the story.

As he’s leaving the briefing room, a politician who is an enemy of Narasimha Rao, Arjun Singh from the Congress itself, tells Manmohan Singh that, “Dr. Singh, I think you’ve read the manifesto better than we have,” and he has a bit of a twinkle in his eye. Manmohan Singh is learning this, and I think this very much has to do with Narasimha Rao’s ability as a linguist. As somebody who not just was comfortable with ambiguity, but in fact celebrated it as a way of creating a smokescreen so that he could do what he wanted to do.

RAJAGOPALAN: Speaking of smokescreens, is this whole IMF influencing and arm twisting another smokescreen? Because I have looked at this as an economist. IMF did not give conditionalities to India for the loan. It was the general prescription of the Washington Consensus, which had been around for a while, but no one sent marching orders to Delhi just to get over the 1991 moment.

Also, most of the reforms were indigenous in the sense that industrial licensing had been crafted by A.N. Varma, Rakesh Mohan, Vandana Agarwal. In the industry ministry, you have the M document, which is written by Montek Singh—continuity over three governments. Where is the smokescreen of IMF’s whispering in Narasimha Rao and Manmohan Singh’s ear coming from? Was this created by them to dodge the problem, or what’s going on?

SITAPATI: I would say it was used by them. I don’t think it was created by them. Nonetheless, to give you another example, Shruti, in 1981, India took a loan from the IMF—at the time, the biggest loan the IMF had given anybody. That didn’t push India to reform. Because of the socialist nature of India’s economy, because the commanding heights of the Indian economy led to an inefficient state running the economy, Indian economy was chronically in trouble. Yes, 1991 was a trouble issue, but India had gone through trouble many, many years earlier. None of that pushed prime ministers to reform.

Look, I think it’s definitely true that if it hadn’t been for the IMF crisis, Narasimha Rao wouldn’t have been jolted. I think that owes itself to the IMF crisis, but that opportunity was quickly filled in by ideas that were a decade brewing within the system. Manmohan Singh and Narasimha Rao quickly realized that they needed to use it.

As I pointed out, even after ’92, when the Indian foreign exchange reserves have come back to normal, we can easily pay back the IMF, reforms still continue all the way to 1995. I would say that the IMF crisis was a genuine crisis, but India had suffered crisis many, many times in the past because there was a structural issue with the economy. Narasimha Rao and Manmohan Singh and A.N. Verma chose to use this particular crisis to implement long-brewed ideas. They implemented it much after the crisis had abated. I would say that’s the right spin to give to it.

RAJAGOPALAN: Very fair, because this whole foreign governments conspiring to change India’s socialism and secularism, this is something that never goes away. I’ve been hearing it for 30 years. It’s a little bit odd that it keeps coming back.

SITAPATI: It comes from, frankly, I would say, an international left political discourse which sees what happens to India as very similar to what happened to Latin America, and that’s just absolutely not true. It’s absolutely not true. Which is why the phrase neoliberal for what happens post ’91—because the assumption is that you had these welfare schemes in the West, and which Margaret Thatcher and Ronald Reagan then dismantled. I don’t think that argument is true in the West. It’s certainly not true in India because in fact, all the welfare schemes come after ’91.

RAJAGOPALAN: Yes, because there was no revenue before that. ’91 is the moment that leads to a huge increase in state revenue which allows the welfare state to actually begin, in a weird sense.

SITAPATI: I’m very happy that your ’91 project also sends this message out, because it’s a lazy way in which India becomes a larger argument for the failure of Washington Consensus et cetera, without seeing the particularities and the particular relationship of social welfare schemes in India and liberalization. The two have actually gone hand in hand; poverty alleviation in India is miraculous because of liberalization, and it’s an irrefutable fact. Yet, I meet professors of political science, professors of economics in the U.S. and the U.K., who still mouth this, and I’m like, “Don’t you guys look at data? What’s going on?”

RAJAGOPALAN: One is, don’t you guys look at data? And the other is, I think also this is coming back in spades even within India and within the government. You know, the things that actually made India rich, which is dismantling a certain type of regulatory overload or reducing tariffs and making imports cheaper so that domestic producers have a huge advantage globally—all that stuff is receding again.

Somehow those intellectual ideas just seem to have disappeared. Now India’s back to raising tariffs, which makes absolutely no sense. This kind of protectionism really kills the domestic production possibility because the costs go up.

SITAPATI: To be fair to India, it’s a global headwind that you’re seeing at the moment toward protectionism. And which is why I would say the Mercatus Center and what you’re doing, Shruti, is even more important at the moment.

RAJAGOPALAN: Well, thank you very much. I will pass this on to the team. There’s a team of people who’ve been writing for it, both within Mercatus and outside. We’ve had some excellent outside scholars. The excerpt that you were talking about on Rao and Deng Xiaoping is actually featured on the website. It’s really like a community history effort. I certainly can’t take credit for it.

Rao-Verma Team

RAJAGOPALAN: Two things on this before we move on to some other aspects of Narasimha Rao. One, can you talk a little bit more about him and A.N. Verma? How did they find each other? How did that working relationship coalesce into such a perfect dance where they had full trust and they had each other’s back, but they didn’t agree on everything? Why is that so important in the larger scheme of Indian politics, that the Indian prime minister has people like Naresh Chandra, has people like A.N. Verma to have their back? What is really happening with that pair?

SITAPATI: I think that A.N. Verma—for those of you who don’t know, Amar Nath Verma was a bureaucrat, an IAS officer, which is an elite cadre of Indian bureaucrats. He had been industry secretary, which is the chief bureaucrat heading the industry ministry in Delhi. Narasimha Rao chose him because he was a ruthless implementer within the bureaucracy. You needed somebody to do the actual cutting of the red tape. The red tape is generated on a daily, minute-by-minute basis by the bureaucracy. Narasimha Rao was worried that he wanted the biggest losers of liberalization, who are the bureaucrats in Delhi who lose their power, to allocate resources and pocket some for themselves.

You needed somebody to bring them in line because even if the politicians agree, even if you get voters to agree, if the bureaucrats don’t agree, in India that powerful state can sink Narasimha Rao. Amar Nath Verma was that man. He was a deep insider within the bureaucracy. Manmohan Singh, by the way, wasn’t a bureaucrat in the sense that he wasn’t a career civil servant from the Indian Administrative Services. He was a professor of economics who had made his way laterally into the bureaucracy as a technocrat and constantly remained an outsider and a technocrat. While he was respected, he wasn’t “one of us.” Amar Nath Verma was “one of us,” and that was very, very important.

Amar Nath Verma would have these Thursday meetings in the prime minister’s office. He would serve kebabs and fancy food, somebody who went—every week, he would get all the line secretaries, the finance secretary, commerce secretary, industry secretary to all come for that lunch. And that lunch had one agenda: What have we done this week for liberalization?

It was that clear. He would ask this question: What has happened? If there’s an implementation gap, who is going to work with whom? And next week when he used to meet them, he used to say, “Okay, this is what you promised last week. What happened this week?” Until I think late ’95, for sure, but even maybe early ’96, this continued every single week.

For many, many people—Rakesh Mohan (who you referred to) also feels this, that this was the central engine for liberalization. Because, again, Narasimha Rao can win over parliament. He can win over the voters, he can win over IMF. But who’s going to win over the bureaucrats, who stand the most to lose with delicensing and reducing the state?

It’s the functioning of the state that needs to be combated. And keep in mind that Narasimha Rao, unlike Deng Xiaoping, didn’t have that kind of control over the state. He needed someone like Amar Nath Verma.

RAJAGOPALAN: Also in contrast, when we think about, say, the Manmohan Singh years and how they tried to reform the system and everything kept getting stuck in every ministry, you suddenly realize the value of someone like A.N. Verma and his genius. The executive in India—we like to call it the executive but there’s a temporary executive and a permanent executive.

SITAPATI: That’s right.

RAJAGOPALAN: The permanent executive is really what controls the system. We learned that the hard way as other governments after Narasimha Rao tried to push through a lot of similar kinds of reforms. They don’t have an A.N. Verma to the Rao partnership sort of thing.

SITAPATI: Just to add to A.N. Verma, lots of people didn’t like A.N. Verma in the system. There were a lot of allegations against him. He was one of those characters. I don’t want to only talk about his good side. There was a lot of criticism. There was a lot of allegations made, but there was a ruthlessness to the man which, as you said, is essential if you have to get things done. Because reform has a basic asymmetry, which is that you have vested interests who benefit from the status quo, whereas the beneficiaries of reforms are not coordinating, not together.

Every time you bring about a reform, nobody will cheer you. Plenty of people would complain. That’s just the nature of reform. You need somebody like Amar Nath Verma to navigate through the complainers.

Political Failures

RAJAGOPALAN: Now, you’ve highlighted beautifully that Narasimha Rao’s genuine skill was the political acumen, how to get people on board, how to push things through, when to be quiet, when to open your mouth, when to signal something and get things going, how to pick a right team and so on. This works with great returns for India when it came to liberalization. Where is this kind of political acumen when we are talking about navigating something like his experience in the home ministry during the Sikh riots, or his experience with something like the Babri Masjid?

This is a guy who has a very keen awareness of what’s happening around him, and yet those are big blunders, in one sense. He’s not completely responsible for those blunders. I think there are many people to blame, and I think he unfairly shoulders most of the blame for these events. How come his sharpness did not kick in those moments and he was not able to navigate or maneuver with the same political agility?

SITAPATI: In the book, I’m very critical of his handling of the Sikh riots in 1984. I call it his vilest hour. On Babri Masjid, I’m not that critical. I think it was a complex issue and he made a certain call. It was the wrong call. Everybody around him also made the same call. But on the Sikh riots, Shruti, I think that he conducted himself with remarkable acumen. He was not looking at the nation’s interest at that time; he was looking at his self-interest. His self-interest, what he was very worried about on October 31, 1984, was that his old boss had been killed and the new boss, Rajiv Gandhi, who’s the son of the old boss, has come. He wanted to make sure that he’s as close to the new boss as he was to the old boss. That was his sole focus.

In the evening of Indira Gandhi’s murder, he gets a call from the prime minister’s office saying that there’s going to be violence the next day, and the prime minister’s office will handle it from then. As you know, in Delhi, the home minister usually deals with the police. But after that phone call, the police were directly reporting to the prime minister’s office, not to Narasimha Rao.

Narasimha Rao could have complained. He could have protested because he knew what was happening, but it was far more important for him to be within the good books of the new boss because he was terrified that he didn’t have the same equation with Rajiv Gandhi as he did with prime minister Indira Gandhi. He chose that and he was successful in that because he continued as a defense minister and became foreign minister again. He was education minister. He had five more years of union ministership as a consequence. But in doing so, he put his interest above the nation’s interest, and I think we should judge him very harshly.

RAJAGOPALAN: He also put his legacy in jeopardy. He wants to be remembered as a reformer because Deng Xiaoping has caught his imagination.

SITAPATI: Not at that time, not in 1984. In 1984, he was just another union minister, and it was just far more important for him. He was an accidental prime minister in ’91. He had retired.

RAJAGOPALAN: He was going to be a monk.

SITAPATI: Yes, he was about to become a monk in a Hindu monastery. He was closing his bank accounts because a monk shouldn’t have money, and then he hears that Rajiv Gandhi has been killed. Suddenly, by virtue of being the least ambitious senior politician in the Congress, he now is first in line to become prime minister. I don’t think he was thinking about his legacy.

Babri Masjid is a different issue. It’s a highly complex issue. Police in every state in India comes under the state chief minister. In June ’91, when the BJP wins the state of Uttar Pradesh, where the Babri Masjid is located, you have a contradiction that a party and chief minister who has sworn to destroy the Babri Masjid has become a constitutional role to actually protect that mosque. Right?

RAJAGOPALAN: Yes.

SITAPATI: That’s very, very difficult to fix and solve. Right?

RAJAGOPALAN: Yes.

SITAPATI: Narasimha Rao could have dismissed the government and taken direct central control of the mosque, but nobody was backing him on that. Anybody who today says Narasimha Rao should have done something, and the only thing to have done is Article 356, president’s rule—but neither Sonia Gandhi, nobody in his cabinet, neither Arjun Singh, nobody was pushing for that.

Look, he made a mistake. It’s an error. He didn’t want to—he also wanted the Hindu vote, he wanted the Muslim vote and he wanted the Babri Masjid to remain. And he failed in all three. The Hindu vote left the Congress for the BJP, the Muslim vote left the Congress for the Samajwadi Party and the Babri Masjid was demolished. It was an error of judgment, no doubt about it, but the issue was a highly complex one. Unlike the Sikh riots, where I think that there was quite moral clarity on what Narasimha Rao should have done, and he didn’t do it.

RAJAGOPALAN: What I’m curious about is, by the time Babri Masjid comes around, he’s already navigated the no-confidence motion, the protest against devaluation in a minority government. He’s already navigated some really difficult political waters. It seems like that agility was missing when he was trying to do the same thing within his party. What he managed to do within the bureaucracy and within parliament, he somehow never managed to do within the Congress. It’s not clear to me why that political sharpness or agility didn’t translate.

SITAPATI: Well, on Babri Masjid, I’m hard pressed to see what he could have done. The fundamental issue is not protecting the mosque. It is, is there a way to stymie the rise of the BJP? That’s the real question. Since the rise of the BJP is a demand-side rise, it’s not a simple question of dismissing one chief minister or dismissing a second. If he had dismissed the BJP, the mosque may have gone two years from then, or three years from then. It would’ve been a constant mobilizing issue for the BJP. I would say the big failure as a Congress man and for Narasimha Rao was that he wasn’t able to reduce the rise of the BJP. That was the second book I wrote.

I don’t think he could have done much. I think that by the time he came to power, the rise of the BJP was an accomplished fact. And his secretary, Ramu Damodaran, even tells me—and I quote it in the book—that he was very aware of the fact that the BJP could have well come to power, had Rajiv Gandhi not died and the Congress not got sympathy votes. He was very sensitive to the fact that Hindus were voting en masse for the BJP away from the Congress. He wanted to reverse this in some way. It’s not clear to me that any other prime minister in the Congress could have acted dramatically differently.

Longevity in Parliament

RAJAGOPALAN: Fair. I think that’s a fair point. One of the other things that makes Narasimha Rao stand apart is, he had a minority government that actually lasted the full term, which was quite exceptional, especially given what he inherited. There were two governments that barely lasted a year just before his, and India was kind of a political mess in the late ’80s.

SITAPATI: Three governments after him that lasted barely a year.

RAJAGOPALAN: Barely a year. Exactly. This is the Deve Gowda, I.K. Gujral, quick succession.

SITAPATI: The second Vajpayee government, and all the minority. All did not have a majority in parliament. And for those of you who are American viewers, India is a Westminster system where you have a parliament, and you have to get a majority in parliament. His party did not have a majority in parliament, so to remain in power as prime minister, he had to rely on allies who were constantly shifting.

RAJAGOPALAN: Yes, and therefore also had to build bridges with all sorts of strange bedfellows to push each agenda through. It is remarkable for someone to survive three no-confidence motions in a minority government. Most people don’t even survive one.

SITAPATI: And a confidence motion and a motion of thanks or a vote of thanks. It’s roughly five, if my memory serves.

RAJAGOPALAN: What is going on in parliament? How is Narasimha Rao navigating this situation? I ask this in one particular context. He’s the least favored Congress prime minister within the Congress Party. Most of his party members are constantly finding reason to turn against him and support someone else. Even when he’s the prime minister, he never is this great favorite among his own people. Not just because he is not from the family, but also just never manages to get that kind of admiration. How does he navigate all these troubled waters and survive so many times? He has nine lives, or at least four or five, as you point out.

SITAPATI: I’d say the first, sordid answer is he used to bribe his way through. That’s the sordid answer, but that’s not the only answer.

RAJAGOPALAN: Walk me through the bribery. This is more like logrolling, but what kinds of things were being offered and exchanged?

SITAPATI: I actually have quite a bit of detail on that because, seeing his notes with Ajit Singh, et cetera, one is that he would offer them money, right?

RAJAGOPALAN: Yes.

SITAPATI: We know that for certain GMM MPs, for a 1993 no-confidence motion, it was found that the money had been given. That’s not in debate. The second is that he would offer plum positions. The third is that he would do things that they wanted. The government would use government money to do things that they wanted, but that’s part of it.

The other part was that Narasimha Rao had cultivated this art, and he really had a sense of timing, that at key moments he would—to give you one example after the demolition of Babri Masjid, when all the non-BJP opposition is saying that the Indian secularism is in threat and the BJP has a no-confidence motion, Narasimha Rao goes to the communists and tells the communists that, “Look, I know you don’t like my economic policies, but right now the big issue is Indian secularism. And on that, we stand together.”

And the communists vote for him, and he wins that no-confidence motion very easily. I interviewed communist MPs who would say that every time they would go and complain against, say, new licenses being given to private sector for banks, for example, Narasimha Rao would say, “Listen, listen, don’t talk to me about this. Let’s talk about the BJP.”

He would change the subject, and then he would also have relations with the BJP, Jaswant Singh, who was the leader of the opposition in the Rajya Sabha, if my memory serves, who was instinctively also a liberalizer. He becomes finance minister later, an excellent finance minister. And Narasimha Rao would go to him and would basically play up the liberalizing part saying that, “Look on economic reforms, we are on the same team,” and nod, nod, wink, wink. The BJP would allow a lot of economic reforms to go through, even though they would complain in public that there is job loss, et cetera, et cetera.

He really knew—and this goes to a question, Shruti, that you discussed earlier, which is his language skills—he knew how to say without saying. He knew whom to say what to. It’s a remarkable talent. Those of you who’ve seen the early episodes of “House of Cards,” he really reminds me of Kevin Spacey in that sense.

RAJAGOPALAN: Yes. Maybe without the murder, just the bribing.

SITAPATI: Yes. That’s true.

The Great Decentralization

RAJAGOPALAN: Another very interesting thing that happens during Rao’s term is the great decentralization. Again, something that Rao is not the architect of, but the 73rd and 74th amendment, which is very long due in India. India never constitutionally had a structure for local government because the assumption of the framers was simply that we have the union government and the state government, and then each state is going to figure out what it needs to do locally. That never quite comes through. India’s local governance is in shambles.

This is everything from picking up garbage to figuring out the welfare state and giving people all the positive welfare entitlements they need like health, education, clean drinking water, whatever it is that we’re doing today. Where is this force coming from, both intellectually for him, but also in his ability to pass a constitutional amendment with a minority government? That is even more remarkable than the simple usual government motions to pass through one reform or the other. What is the coalition or constituency that is truly in favor of this, and how does Rao navigate that?

SITAPATI: I’m afraid, I don’t quite know the answer to this, Shruti, because even in the book itself, I don’t focus on the 73rd/74th. I should have. My instinct is that it’s not as successful today as we would like it to be because state chief ministers haven’t really devolved power downward. It’s not something I know enough about specifically to do with the 73rd, 74th. I think you might know more than that.

I can tell you that Narasimha Rao’s general instinct of decentralizing was something we see in the economy—that when Narasimha Rao reduced the power of New Delhi when it came to licensing, overnight, the people who benefited the most were state chief ministers. Suddenly, tax benefits, land benefits, infrastructure benefits, housing, electricity, roads, et cetera, came to the hands of the state chief minister.

It’s not a coincidence that when Bill Clinton comes to visit—I think he comes in 2000, if my memory serves—I think for the first time for an American president, he travels to a state (Hyderabad), and he goes and visits the state chief minister, and he goes to Cyber City. To signify that, you know what, when it comes to American economic interests, you don’t only talk to the finance minister and prime minister. You also talk to state chief ministers now. They’re an important ingredient of the conversation. We see that now happening all the time, that anyone who wants to invest, it’s one thing to talk to a finance minister, but really it’s the state finance minister, the state chief minister, where the power lies.

I think that’s very powerful decentralization that has happened in India. Of that, Narasimha Rao was very conscious, because he had been chief minister of a state before. Because he had been state minister, he understood that India wasn’t just Delhi. That power had to go all the way down. This is unlike the Nehru/Gandhis, for example. Neither Sonia, Rajiv, Nehru, Indira have ever served in the states. All their working career has been in Delhi. When they want to transform India, they’re like, “The India we know is Delhi.” That wasn’t the case for Narasimha Rao. I think a mix of his cultural interest, as well as his work in the states had given him a decentered view of India.

RAJAGOPALAN: That’s really interesting. People had expected that when Narendra Modi came to power. A lot of people said, “Oh, the great federalism wave is going to begin because we’ve had someone who’s been such a chief minister of a state, and all the development that chief ministers do, come to the union government. Now he’s going to transfer more power to the states.” Then that just never quite panned out in the same way. Whereas, in the case of someone like Narasimha Rao, that’s exactly the direction in which it goes.

Anti-Defection

RAJAGOPALAN: I have a question I would only be able to get an answer from a political scientist like yourself. One major change in Indian parliament is the 1985 52nd Amendment, which brings in anti-defection. As a simple move, at least, in terms of parliamentary procedure, what it does is it officializes India’s party whip system.

SITAPATI: That’s right.

RAJAGOPALAN: Now, members of parliament are no longer voting their conscience. They have to vote according to the party whip, and they can’t go against it. The consequences are quite severe. It’s not a slap on the wrist; it is suspension.

SITAPATI: That’s right.

RAJAGOPALAN: Is this one of the reasons he can get away having a minority government, because what he really needs to do is just build bridges with party leadership in all the different parties? Whereas, he doesn’t have to actually go around begging to each and every member of parliament, the way he may have had to before 1985, before this anti-defection moment kicks in.

SITAPATI: I don’t know if I quite see it that way, Shruti, for two reasons. One is, it’s certainly true that for the bigger parties, he had to deal with the party men. He was spending a large amount of time trying to break up the smaller parties. And there, the numbers are really small. The anti-defection law doesn’t really apply, right?

Two is that, while that is true—what you’re saying is certainly true, that the anti-defection law strengthens parties and creates more stability in the system at the cost of freedom and conscience—you’re absolutely right—this was also true of the two governments before Narasimha Rao in ’89 and ’90. And this is also true of the three governments after Narasimha Rao. Another way to think about it is, had the anti-defection law not happened, imagine just how unstable India would’ve been, because even with the anti-defection law, the period ’89 to ’98 is just so unstable in Indian history, right?

RAJAGOPALAN: Yes, that’s also why a particular kind of generation wants a strong leader and a single-party majority and things like that.

SITAPATI: That’s right.

RAJAGOPALAN: That’s probably the burden of our generation and what is typically requested. Whereas, I actually think coalition governments have done much better and far more interesting work than single-party large mandates, like maybe the case of Rajiv Gandhi or Indira Gandhi or something like that. I think you’re right that this was a facility that was available to governments before and after him, and no one quite used it in the same way.

SITAPATI: I remember, let me say it in Hindi and then I can also say in English, which is, Narendra Modi has a phrase when he comes to power in 2014: Ab ki baar Modi Sarkaar, which is, “This time, Modi government,” loosely translated. That is based on an earlier Hindi phrase, which was used for Atal Bihari Vajpayee when he was campaigning in the mid-’90s. It goes something like this: Baari Baari, Sab ki Baari, Ab ki Baari, Atal Bihari, which the English translation is, “Time after time, it seems it’s everybody’s time.” Which means you name it and that person has become prime minister. This time it is Atal Bihari’s time. At least, this time give a chance to Atal Bihari because everybody seems to be getting a chance.

Chandra Shekhar hadn’t held any position anywhere, and suddenly he becomes prime minister of India. At least V.P. Singh was chief minister of Uttar Pradesh before that. It was an enormous period of instability despite the anti-defection law. I just shudder to imagine, without the law, how much more chaotic it could have been.

RAJAGOPALAN: I don’t know. I feel like the political equilibrium is different, and it need not necessarily mean greater chaos. It means greater churn within the parliament and how people are going about negotiating their agendas, but I would be a little bit more careful to jump to that necessarily means political chaos.

SITAPATI: Fair enough. I just worry that individual MPs could then negotiate the rates. That does terrify me. Look, fair enough.

RAJAGOPALAN: I would actually hope that happens today. I would love for individual MPs to have more power and have more voice, and negotiate rates or any other favors that they wish for their constituents, as opposed to this overwhelming cabinet control that we see, which swallowed the legislature. That’s another conversation for another time.

Rao Versus Vajpayee

RAJAGOPALAN: One of the things that I want to pick your brain on is, your second book is called “Jugalbandi.” It’s really like a biography of the rise of the BJP, but the two central characters in it are L.K. Advani, who almost became prime minister, and Atal Bihari Vajpayee, who did in fact become one of India’s most successful prime ministers and, at least on the right, is one of those much-revered characters even today.

The continuity of reforms goes straight from Narasimha Rao to Vajpayee because the governments just before Narasimha Rao couldn’t get much done. The governments between Narasimha Rao and Vajpayee could barely hang in there in parliament. They could barely complete the term. What is it about these two people which makes them such great coalition builders and reformers? They’re quite different in their personality. Vajpayee is much more of an ideologue. We know exactly where he’s coming from in a basic sense. He’s hugely charismatic in a way that people have called—I believe they say that Narasimha Rao had the charisma for dead fish.

SITAPATI: That’s right.

RAJAGOPALAN: Vajpayee is the other extreme of that spectrum. What is it about these two people that makes them such fantastic bridge builders and reformers?

SITAPATI: Certainly, Vajpayee was a reformer on economics. He really ran a fantastic government. I think his tragedy was that the benefits of the reforms that he did weren’t immediate, which is why he lost the elections. It took five, six years for those reforms to actually bear fruit. I would say that the Manmohan Singh government benefited from that rather than Vajpayee himself.

I would say the other way to think about this question, Shruti, is, why is it that the people in every government after Narasimha Rao all became reformers? That’s the other way to look at this question, that what did Narasimha Rao do that, on foreign policy, economics and welfare schemes, he locked in a certain way, a certain trajectory of India that Vajpayee, Deve Gowda’s dream budget—

RAJAGOPALAN: Absolutely.

SITAPATI: —even I.K. Gujral, and then the second Vajpayee government, all of them moved in this direction. To me, the biggest data point of this is Montek Singh Ahluwalia, who became finance secretary, which is the key bureaucrat on the economy, under Narsimha Rao, continued in the first Vajpayee government, continued in Deve Gowda, in I.K. Gujral and only left office in the second Vajpayee government. I think that’s quite remarkable. That tells you that this key figure was left untouched.

During the Vajpayee government, when Yashwant Sinha, who was his finance minister, was asked—I think he goes to Washington, D.C., with Montek Singh Ahluwalia—and he was asked, “Look, we are very worried because the BJP talks about protectionism, et cetera.” He said, “Listen, don’t worry. I might be change but that man”—pointing at Montek Singh Ahluwalia—“is continuity.” I think that what Narasimha Rao was able to do, which enables someone like Vajpayee to continue the reforms, was to give a signal that reforms would not destroy you politically.

He wasn’t able to give a signal that the reforms will win you elections. I think that’s something that Modi is trying, but he was able to say that liberalization will not destroy you politically. That Narasimha Rao lost in ’96, for a set of reasons unrelated to liberalization—it gave enormous courage to prime ministers after him that doing the good thing may not be something that loses you votes.

Rise—and Fall?—of the Technocrats

RAJAGOPALAN: I think you’re absolutely right. In one sense, after Nehru, Narasimha Rao is the agenda setter for the next three to four decades, almost. We’ve already crossed three decades of his agenda. That agenda is greater federalism, more markets, larger welfare state. All of these things are going parallelly.

One thing, though, I must ask: This almost makes it seem like it’s really the win for the technocrats, because they are the people where the ideas are being incubated. Under the right political protection and umbrella, they’re able to get a lot done. Without the right political protection and umbrella, they can get nothing done. That seems to be the lesson from what you’ve told me.

Why is it that the reformers float up to the top? Why is it that parties are picking the more reform-minded people as their prime ministerial candidate? Why is it that Sonia Gandhi is picking Manmohan Singh as opposed to Pranab Mukherjee or any of the other loyalists who could have been chosen prime minister when she gets the big mandate in 2004?

SITAPATI: That’s a very good question. These are all good questions that my book doesn’t answer. My own instinct for an answer, and this is not based on research—the other stuff you asked me, I know because I’ve researched it. But this is speculation, and it’s a very good question. I suspect that as you’re seeing more and more of a pro-incumbency vote in India right now, which means that voters are rewarding good governance more than they used to. In India—unlike the U.S.; historically, you’ve had an anti-incumbency effect—you’re getting a little more of a pro-incumbency effect now. That is telling politicians, that is telling parties that governance matters.

Governance, they are beginning to see, is an increasingly technical task and something that requires if not technocrats, but politicians with specialized skills. Again, I don’t want to be euphoric about it, because there are plenty of ministers both in the center and the state who are there only for patronage and only because of patronage. To the extent that you’re seeing this trend, I think it’s because governance increasingly matters electorally in a way it never did.

Even within the bureaucracy, you’re seeing certain bureaucrats who are experts on finance or health or infrastructure being pushed in the states to become health secretary or become finance secretary or to push on infrastructure in particular. I think it has to do with a shift that is happening in India where voters are rewarding better governance, especially on infrastructure, education, et cetera.

RAJAGOPALAN: I partly agree with you and disagree with you, because governance has lots of different practical aspects. I think on service delivery, I agree with you. I think voters are rewarding better service delivery. Most of the service delivery we’re talking about is quasi-private goods which have been converted into some kind of government entitlement.

SITAPATI: Private welfare.

RAJAGOPALAN: Private welfare. We don’t really have strong creation of public goods. Things like garbage getting picked up or sewage systems being built or slums getting regularized into a better public sanitation and health environment. We don’t really see creation of public goods happening. In that sense, I’m a little skeptical on the glowing report card for governance. But it is better than before, where people neither got public goods nor did they get private entitlements because most of it leaked away in some kind of corruption.

SITAPATI: I hear you. All I’m saying is, to the extent to which technocrats are preferred, but only to the extent that they preferred, this could be one explanation. I’m totally with you. In fact, Shruti, maybe you should have got somebody else to talk about this because you and I may just end up agreeing quite a bit.

RAJAGOPALAN: Well, I do agree with you that agreeing on everything may make for a terrible conversation. We usually come to it from different points of view.

The other aspect, however, I feel that continuity in technocracy has broken down. When we talk about who should be running the RBI or who should be advising the prime minister on economic matters or on scientific and technical matters, I think on this there has been a clean shift away from continuity and technical experts, and more about who is my guy, or who is the person who is going to support my point of view?

In fact, when people like Puja Mehra—who are reporting almost daily, but also chronicling over a period of a decade or two, what’s happening in these different ministries when it comes to economic reforms or financial decisions—now say that it’s very difficult to figure out what’s happening because no one really makes notes on documents anymore. Files are really not moving around; everything is tightly controlled by one or two people in the prime minister’s office. We really don’t know what people think within the bureaucracy and the technocracy. Do you think that’s a fair way to characterize the shift in India?

SITAPATI: I think so. I think that this is particularly a case on economics. I think that the shift is in the Narendra Modi government. I think 2014 marks the shift. I think it’s a tragedy. Let me first tell you why it’s a tragedy, which is that in a developing country like India, having economists, bureaucrats, politicians and a nexus of reformist bureaucrats, reformist politicians, reformist economists and reformist businessmen . . .

Even businessmen and women need not be reformist. ASSOCHAM and FICCI were protectionists. It was CII as a lobbying group, which ended up being much more open to liberalization. From the 1980s, this nexus began to develop. It’s a national treasure. This nexus is a national treasure. You see it in Japan around the MITI, the ministry of industrial technology. You see it a little bit in South Korea, where South Korean bureaucrats and the chaebols are dealing with each other.

Now, look, there are circumstances in which this nexus can lead to corruption. In India, this nexus actually led to dramatic economic growth for a very long period of time. This continued from the ’80s, then the ’90s, and through the 2000s is continued. It led to large-scale growth in India.

I worry that Narendra Modi feels that this nexus has been tainted by the Congress Party, and they consist of Ph.D.s who speak English, who are culturally alien to India—I think this is how he thinks—and are independent-minded, so may talk back to him. The treatment of Arvind Subramanian and Raghuram Rajan is a good example of this.

RAJAGOPALAN: Urjit Patel, Viral Acharya. All of them.

SITAPATI: That’s right. All of them. I think that’s a problem. There is no plan B here. It’s not that the RSS has been incubating its own nexus of reform-minded businessmen, economists, technocrats, politicians and bureaucrats. There is no plan B. I think that’s a colossal mistake.

I remember this—if I may share a personal anecdote, I went for the book release of Montek Singh Ahluwalia’s book “Backstage,” where the key speaker was Manmohan Singh. He was really the central figure behind this nexus. In the audience were businessmen like Uday Kotak, Shiv Nadar—you name the reformist bureaucrat, and he or she was there. There were RBI governors who were there; there were reformist politicians like P. Chidambaram and, of course, Manmohan Singh.

And it struck me that not one person in that room would be consulted by the Modi government. Look, he may have his views, which is that all of them are tainted by closeness to the Congress Party, but that’s a mistake. Narasimha Rao did not make that mistake. Narasimha Rao didn’t say that, “Oh, I only want to pick people who are not tainted by the previous government.” He didn’t make that mistake.

RAJAGOPALAN: Nor did Vajpayee.

SITAPATI: Nor did Vajpayee. And Vajpayee chose as finance minister a person, Yashwant Sinha, who had been finance minister in a different political party and a different government, yet he became finance minister. I think it’s a mistake that the Modi government has made.

RAJAGOPALAN: Why has this happened since 2014? Is it because this is sort of like a backlash against the whole Delhi Durbar scene? Or is it something else to do with the personality of the prime minister, which seems to be overwhelmingly important?

SITAPATI: No, it’s the personality of the prime minister, but I think the prime minister feels that they’re part of a cozy Delhi Durbar. There are elements of a cozy Delhi Durbar there. But it is this coziness which created the networks that allowed Korea, Taiwan, Thailand, Indonesia, Japan, Malaysia—all of them had this coziness, China now. I see this as a tragedy, and it’s a colossal tragedy because it has taken three decades to produce this.

RAJAGOPALAN: Exactly, the pipeline.

SITAPATI: To produce the pipeline. You don’t have it. You don’t get IAS officers who understand economics on a daily basis; you just don’t get that. You don’t get businessmen and women who are forward looking rather than protectionist; you just don’t get that. I think that’s a serious error.

Importance of Liberal Ideas

RAJAGOPALAN: You know, also on this, I know we started the conversation with how it wasn’t about the ideas. The ideas were kind of around, and it was about the political maneuvering that Rao and others like him in his position have brought in. But I think here the ideas really start mattering. You need a deep bench and a pipeline of people who are vested into the idea that economic growth really matters or that good governance looks a particular way or high-quality public goods and infrastructure need to look a particular way or need a particular kind of investment.

And that actually is my great fear for India. It’s not the current moment. It’s where is the pipeline that will incubate those ideas over certain decades or over multiple generations, and how we can make that possible?

SITAPATI: Yes, I agree with you. I just want to end one thing about this. On the importance, I hear your criticism that on many of the hard-won intellectual battles that led to liberalization there’s a bit of a rollback. I think there’s a global rollback. But on the other hand, liberalization itself is now a bipartisan success in India.

And I think that, look, the Mercatus Center and you and me shouldn’t all be about doomsday. This is a big success, and I’ll give you an example. I was terrified, when the Narasimha Rao book I wrote (my first book) came out, that there would be heavy pushback because the book assumed that liberalization was a good thing and spent 300 pages trying to answer who did it. But underlying the assumption was, look, this was a transformation in India for the good, largely.

There has been a problem with inequality, but poverty has reduced hugely, growth has improved, welfare schemes have improved, et cetera. And there just wasn’t pushback. It just led me to believe that across the intellectual spectrum that liberalization, or neoliberalism as critics call it, has been more successful than what preceded it, has become accepted truth now. And I think that that’s a nice thing.

RAJAGOPALAN: Yes, and that’s Rao’s great legacy in one sense. That agenda setting and setting the trajectory that there is huge buy-in for this. I always like to tell my friends in the United States who ask me about the Indian economy and Indian politics that on both sides of the political spectrum you have the same kind of socialism, and on both sides of the political spectrum you have the same kind of support for markets. It just depends on who you speak with and in what context you speak with them. They’re all equally socialist and all equally reformist as well, which is one of those bizarre things about India.

Approach to Research and Writing

RAJAGOPALAN: I want to talk to you a little bit about both your books and your writing process. You have a Ph.D. in political science, but you also write very accessibly for the general public. Both your books are exceptionally well researched but also exceptionally easy to read. You also write newspaper columns. You still teach political science in an academic sense. What is your writing process more generally, and how does it differ for all these different kinds of outputs?

SITAPATI: Well, the first thing is a deep belief, Shruti, that academics aren’t brighter than others, all right? It’s a deep belief. To put it differently, a doctor is not brighter than the patient. It’s just that the doctor has done a degree, an M.D., and has spent years—that’s the only difference.

But academics think of themselves as the highest-IQ people in the room. They’re not. The IQ or talent is as distributed among non-academics. In fact, in a country like India the brightest of the bright don't want to become academics because it's not remunerative. And you have plenty of people who are engineers, who are doctors, who work in finance, who work in a corporate world, who are as bright as academics.

What you need to provide them when you write is context. And transparently, that’s what I try to do when I write. I try to say, look, I want to write the same thing that academics will like and non-academics will like. But the courtesy I make to non-academics is I provide a little more context which they would have, had they done a Ph.D. or had they become an area expert. But they have the intellectual chops to do that. I have absolutely no doubt about that.

Now, in terms of the sources that I use for both books, I spent a ton of time reading secondary sources. So if you’re doing a Ph.D., those graduate students, it’s quite the same. When you read secondary sources, then you’re able to shape what’s the question you’re asking, how you’re planning to structure it. Both my books, even though they’re about people, they’re larger questions. The Narasimha Rao book, it was his biography, but underlying it was what was the political acumen needed to transform India in the ’90s. The Advani-Vajpayee book was about how the BJP rose in the 1980s but even before that. I was kind of nestling a biography in an intellectual question.

After I look at secondary sources, the primary sources that I use tend to be interviews, archival documents and newspapers. These are the three things that I tend to use. Within archival documents there could be party documents, there could be private papers of people, correspondences, there could be either of that. Of course, that varies. A lot of political scientists use survey data, for example, or existing data and run regression analyses to find correlation. That’s not very different from how political economists work.

Mine is different, and I think that’s fine as long as you have something that resembles a research design, or rather that the material you use fits the claims that you make; it doesn’t exaggerate the claims that you make. I spend a lot of time thinking about that. But in the books, I don’t make that explicit because I find that turns off a lot of readers. If you’re an academic and read it, you see where I’m headed and you see what I’m trying to do.

Of course, some academics don’t like both my books because they feel that they are not written for them, and they’re right. They’re written primarily for a non-academic audience, but academics also have something to gain from them. That’s the way I see it. Does that answer some of the questions?

RAJAGOPALAN: Absolutely. The thing I find most remarkable about you is you have the uncanny ability to pick the right research question. Both your books have zeroed in on some of the most important things that have happened politically, right? This is across the two parties, but whether it is Mandir, whether it is Mandal, whether it is markets, whether it’s reforms—what is the setup within the Congress that leads to certain outcomes or the setup within the BJP? These are deeply important questions that political scientists and economists are interested in. How do you zero in on the research question, because these books could have gone in many different directions?

SITAPATI: I soak and poke for a while. I try to make sure that I don’t have too sharp a research question until the end. I have some hypothesis going on, because here’s the thing. In any research process, it’s not that right in the beginning, you have the research question and then you spend 90% of the time finding the answer. It takes you 50% of the time even to ask the right question.

Often if you get the specific question exactly right, the answer is quite easy. When I was doing my Ph.D. at Princeton University, I learned this. And all my students, when they’re doing their research, I say, “Look, don’t get hung up on day one having the right question. Just keep soaking and poking. Have a general set of hypotheses, but 50%, halfway down the research process, that’s when you’ll have clarity on your research question.”

I try to do that. Look, there are choices, right? That if you pursue a certain research question, you can’t pursue another one. Also, you should only pursue a research question to which there is an available answer. You have to do enough research to find out what is the set of answers that are available. It is a bit of an iterative process.

The one thing that the grad students among you—if I could proffer some advice, it would be have a set of vague hypotheses when you go in, but be prepared that it’ll take you 50 to 60% of your research time to just find the question. Once you have a razor-sharp question, the answer actually flows quite easily.

RAJAGOPALAN: What was the question when you started poking into P.V. Narasimha Rao and thought this might make for a great project? And what did you end up finally? Do you have a memory of that vaguely?

SITAPATI: I had read a book called “Deng Xiaoping and the Transformation of China” by Ezra Vogel, a Yale historian.

RAJAGOPALAN: Excellent.

SITAPATI: Excellent book. It was two biographies running parallel. It was China changing in the ’80s, and it was a biography of Deng. The moment I read it, I said, look, I need to write a book on India, which is India changing in the ’90s. And the political figure was Narasimha Rao, but I didn’t know anything about him at that time. I knew what Wikipedia knew. I didn’t know anything more than that. I didn’t take that much more seriously.

On hindsight that was a good thing because what the core research question is, all of that just happened much later. I was soaking and poking, and then I read up a lot of the debates of that period the economists have. Was it the IMF? Was it internal ideas that transformed India, something we just discussed? Did it happen in the ’80s or did it happen in the ’90s? Atul Kohli, Dani Rodrik, Arvind Subramanian versus Arvind Panagariya.

RAJAGOPALAN: T.N. Srinivasan on the other side.

SITAPATI: T.N. Srinivasan on the other side. I was soaking and poking all these debates, and then I looked at his archives. Somewhere down the line, the core insight I got was, wow, this guy really doesn’t seem to have power, yet he’s making so many changes. The central question that then began—I got obsessed—is how did this guy create power and then expend it to bring about change? The question wasn’t that, what were the policies that Narasimha Rao adopted? Because actually, the policies are now well known. It is, how did he have the political chops to implement them and survive at the same time?

That became the razor-sharp question that the rest of the book was structured around. It took me around 50 to 60% to even see that insight so that it would become a question. That’s the one-sentence advice I would have to those researchers among you, which is don’t assume that you’ll have a clear research question on day one. You often have it on day 100, and that’s a good thing.

Writing Process

RAJAGOPALAN: That’s great advice. How do you write?

SITAPATI: I only have two books. I haven’t done all that much, but for both of the books very early on, I came up with a draft table of contents. I told myself if I was writing the book, what would the chapters look like? Then I said, okay, each chapter will, let’s say, be 30 pages. Then what would the subsection of each chapter be? And then after doing that, every time I read a book and I came across a paragraph, I said, “Oh, this is an interesting paragraph. This is chapter six, section three.” Then I would basically copy it, or I would open a word document and put that there.

If I interviewed somebody and somebody was talking, I’d say, “Oh, wow, that was an interesting quote. That’s chapter two, section four.” At the end of my research process, I had this thick binder with each chapter and notes, which are section-wise divided. Now, the thorn of this process is that you can get invested very early to a structure because even before I started researching, I came up with a structure. The main thing to keep in mind, which I kept in mind, which is a negative of my process, it’s important to kill your babies. I know it’s a horrific way to say it, but what it means is don’t fall in love with your ideas too early.

I have a certain chapter, but then as I’m doing more research, I’m saying, okay, this chapter is not necessary because the material can be eaten in other chapters. Or this subsection should come earlier than the other subsection. I’m quite comfortable changing the initial structure, but I end up with a structure. Then of course, on a daily basis when I’m doing interviews—that’s the part I find most fun, but it’s also the most infuriating because somebody gives you a time and doesn’t show up. Or you’re spending a month with the secretary’s secretary of the person, and that person is giving you a hard time.

It’s very difficult, and the archives in India—Narasimha Rao’s archive is fine, but if it’s in the Nehru Memorial or the national archives, that has its own rhythms. Once I have it and I have all my notes and I have to write, I try to spend two weeks writing per chapter.

RAJAGOPALAN: That’s basically all you do. You just write many hours a day and just keep hacking away at it.

SITAPATI: Yes. I would just leave blank where the research had it because you don’t know whether research is complete or not until you start writing. Because that’s when the holes of the research are revealed. That doesn’t make me ashamed at all. I’m like, “Okay, I just need to do more research.” Even while writing, I leave blanks and then go back and do some research. But I would take about 10 days to two weeks to write. And then I had this brain trust of about 10, 11 people, and I would circulate it to them and then incorporate all their feedback. I found that very helpful.

Again, the researchers among you who also write, this might prove helpful to you, which is if you give it to a diverse set of people to read and they give you feedback, if the universal feedback is something doesn’t work, take it seriously. If they give you feedback on how to fix it, don’t take it seriously because that’s your voice, right? If everybody says this chapter is not working or this paragraph is not working, take that seriously, but how you fix it is up to you. Nobody else can give you advice on how to do it. Does that make sense, Shruti?

RAJAGOPALAN: Absolutely. Vinay, thank you so much for doing this. This is such a pleasure. We always chat like this, except I’m glad this time it got recorded and we got a chance to really talk about your book, which has now been around for many years. It’s been translated in so many languages. And hopefully, you’ll come back to talk about your other book in equal detail.

SITAPATI: Thank you very much. This has been a fantastic hour and a half. Please continue what you’re doing. And especially now in India, the ideas that got us where we are needs to be advertised more than ever.