Sonia Gandhi on the origins of the 1991 economic reform (Revised 17 Dec 2012)

[See also Did Jagdish Bhagwati “originate”, “pioneer”, “intellectually father” India’s 1991 economic reform?  Did Manmohan Singh? Or did I, through my encounter with Rajiv Gandhi, just as Siddhartha Shankar Ray told Manmohan & his aides in Sep 1993 in Washington?  Judge the evidence for yourself.  And why has Amartya Sen misdescribed his work? India’s right path forward today remains what I said in my 3 Dec 2012 Delhi lecture! and Fact vs Falsification & Flattery in New Delhi (& Kolkata etc) Revised 30 June 2013]

From Facebook 17 Dec 2012

Subroto Roy says to Mr Sathe, Shekhar, changing the direction of a ship of state is very hard, knowing in which direction it should change and to what degree is even harder; it has rarely been something that can be done without random shocks arising let aside the power of vested interests. Had Rajiv Gandhi lived to form a new Government, I have little doubt I would have led the reform that I had chalked out for him and that he had approved of; Sonia Gandhi would have remained the housewife, mother and grandmother that she had preferred to be and not been made into the Queen of India by her party; Manmohan Singh had left India in 1987 for the Nyerere project and it had been rumoured at the time that had been slightly to do with him protesting, to the extent that he ever has protested anything, the anti-Sikh pogrom that some of Rajiv’s friends had apparently unleashed after Indira’s killing; he returned in Nov 1990, joined Chandrashekhar in Dec 1990, left Chandrashekhar in March 1991 when elections were announced and was biding his time as head of the UPSC UGC (typo corrected 5 July 2013); had Rajiv Gandhi lived, Manmohan Singh would have had a governor’s career path, becoming the governor of this or that state one after next; he would not have been brought into the economic reform process which he had had nothing to do with originating; and finally Pranab Mukherjee, who had been made to leave the Congress when Rajiv took over, would have been likely rehabilitated slowly but would not have come to control the working of the party as he did. I think I have said in my Lok Sabha TV interview that there have been many microeconomic improvements arising from technological progress in the last 20+ years but the macroeconomic and monetary situation is grim, because at root the fiscal situation remains incoherent and confused. I do not see anyone in Manmohan Singh’s entourage among all his many acolytes and flatterers and apologists who is able to get to these root problems.

Facebook March 26 2011

Mr Chidambaram knows better than that!

by Subroto Roy

I remain amused by the powers-that-be in Delhi continuing to attempt to deny me credit for the origins of the 1991 economic reform based on the UH-Manoa perestroika-for-India project I had led 1986-1992, and the results of which I brought with me to my first meeting with Rajiv Gandhi on September 18 1990.

After almost a decade of relentless pressure from me for the truth to be told, Rajiv’s widow on December 28 2009 finally admitted her late husband “left his personal imprint on the (Congress) party’s manifesto of 1991″.

Now yesterday, March 25 2011, Mr Chidambaram has admitted “The Congress manifesto prepared for the general elections in 1991 did talk about an agenda of reforms but with the assassination of Rajiv Gandhi, there was no certainty that these would have remained on the agenda”.

Well, Mr Chidambaram, you know better than that!  Did you not yourself say in Tokyo in April 1993 that the reform “was not miraculous” but based on “rewriting of the Congress manifesto while in Opposition. We were ready when we came back to power in 1991″? (And as for those two former World Bank types with you on the podium yesterday, one was out of the country and cannot possibly claim to have been part of anything, though he had begged me to come to Hawaii and I had said sorry, no; the other, well, perhaps the less said about his capacity for self-delusion the better for India (though his shift from Sovietism to Americanism and his power to waffle endlessly on TV etc is a true bureaucratic marvel). The third man on the podium with you was someone I had tried hard to get to come to Hawaii, upon recommendation of Sukhamoy Chakravarty; but he could not make it; he though has inevitably lost his way for some years now with his wish to stay in Delhi much longer than he should ever have done.)

The simple truth is very simple: the positive change in direction of the Congress Party’s economic and other thinking  occurred due to the Congress President’s meeting with me on September 18 1990, where I gave him the perestroika-for-India project results and advised him to look to the future and write a fresh and modern manifesto. He agreed with his actions the following week, and subsequently, viz., Rajiv Gandhi and the Origins of India’s 1991 Economic Reform. Later, after his assassination, against which I had warned, the process came to be taken over by the greedy and the mendacious (specifically, organised big business lobbies, big bureaucrats and politicians, Soviet sleeper agents etc). So the truth got lost and has had to be reconstructed slowly.

(And puleaaase, baba, Manmohan Singh or any of his acolytes had nothing to do with it! Not in the loop! After all, if they had had the creativity and economic knowledge and intellectual honesty and courage, during all their years and decades in the Government of India and sundry international bureaucracies, to do what we did, they would and should have done it!  But there is just no evidence that they did, sorry baba! Time almost to say Uff!)

My colleague Ted James who with me led the Hawaii projects said of it in January 2010 a few months before he tragically died: “Seldom are significant reforms imposed successfully by international bureaucracies. Most often they are the result of indigenous actors motivated by domestic imperatives. I believe this was the case in India in 1991. It may have been fortuitous that Dr. Roy gained an audience with a receptive Rajiv Gandhi in 1990 but it was not luck that he was prepared with a well-thought out program; this arose from years of careful thought and debate on the matter.”

Why all this is important is not because I want a national award and due recognition etc, which I won’t of course mind getting, but because Dr Singh, Mr Chidambaram et al (as well as all the BJP and CPI-M etc people in Delhi too) have rather ruined the fisc, the currency and the exchanges…. It may be hopeless….

From Facebook December 20 2010

Subroto Roy is glad to hear today, for the first time, Dr Manmohan Singh explicitly praise Rajiv Gandhi for chalking out the roadmap of the 1991 economic reform, as Rajiv did thanks to his encounter with the UH-Manoa project I had led since 1986. At last year’s Congress Party meet, Sonia Gandhi for the first time on Dec 28 2009 said Rajiv “left his personal imprint on the (Congress) party’s manifesto of 1991″. Better late than never.

From Facebook Sep 20 2010

Subroto Roy  notes the 20th anniversary just passed over the weekend of Rajiv Gandhi’s encounter with the UH-Manoa peresteroika-for-India project that I had led. On Sep 18 1990, when Rajiv and I first met, Dr Manmohan Singh was not physically in India, ending his final assignment before retirement with Julius Nyerere of Tanzania. Of the others whom Rajiv appointed along with myself as advisers a week later on Sep 25 1990, at least one has recently proved to be mendacious in print — stating Manmohan Singh and not I was in the group that got created on Sep 25 following my single meeting with Rajiv on Sep 18! — and I had to expose the mendacity; he has not sued me for calling him a liar because, of course, truth is a first and full defence against a charge of defamation!

National policy should not float on self-delusion and flattery and myth and mendacity — or grave problems like Kashmir and macroeconomic inflation are the inevitable result.

I have met Mrs Sonia Gandhi once in December 1991 when I gave her a tape of her husband’s conversations with me during the Gulf War; she later in 2001 was kind enough to write acknowledging receipt of an earlier draft of this story.

From Facebook  (December 29, 2009):

Subroto Roy is pleased that Sonia Gandhi has finally said, yesterday (December 28 2009), her late husband Rajiv “left his personal imprint on the (Congress) party’s manifesto of 1991″. He did — thanks to his encounter with me dated Sep 18 1990 where I gave him a copy of the results of the perestroika-for-India project I had led at a US university since 1986, as well as my May 29 1984 IEA monograph that had provoked the lead editorial of *The Times* of London when first published (based on my Cambridge doctoral thesis under Frank Hahn).  I was very warmly introduced to Rajiv thanks to Siddhartha Shankar Ray, Bar-at-Law, senior Congress Party politician and my senior counsel in India’s Supreme Court during a grave international custody battle. The story of my encounter with Rajiv has now been fully told in the Indian newspapers, at my blog/website, and reproduced in my Notes at Facebook. Perhaps Mrs Gandhi will realise too some time that Manmohan Singh (or any of his prominent acolytes and flatterers among Indian bureaucrats, businessmen and journalists) had nothing to do with the origins of the 1991 reform — there was a reason I did not invite them to Manoa,

namely, I had felt they had been part of the problem, not the solution.

Dr Singh and I have met twice and I hold him in high personal regard — in the late summer of 1973 in Paris he kindly consented to visit our then-home there at my father’s request to discuss economics with me before I, as an 18 year old, left for my freshman year at the London School of Economics; we ended up having a tense debate on the merits (as he saw them) and demerits (as I saw them) of the Soviet influence on Indian economic policy-making until that time; then we met twenty years later in Washington in the Fall of 1993 when the Indian Ambassador, the same Barrister Ray, introduced me to him as the person on whose laptop the 1991 manifesto had been written. To his credit, he himself has not attributed to himself any of the original economic thought his many flatterers have attributed to him since 1991 though he has not denounced them either, or at least is yet to do so. My rather critical views on his economics and politics are available in the Indian newspapers, my site and now in my Notes at Facebook, e.g. “Mistaken Macroeconomics” etc.

Update from Facebook July 2, 2010:

Subroto Roy has lost count of all the Advisory Councils in New Delhi and whom they are supposed to be advising or about what. Manmohan Singh has an “Economic Advisory Council” and a “Trade and Industry Advisory Council” besides the “Planning Commission” and “National Development Council” and “National Security Council” and any number of others for sure. Sonia Gandhi has the “National Advisory Council” who seem to live in cities but want to talk about rural India; a rural India where people have always been fully familiar with normal markets for food and labour yet those markets are now being destroyed or at least distorted, perhaps incorrigibly. My advice to Rajiv Gandhi 20 years ago based on the perestroika-for-India project I had led at the UH Manoa was for free (in fact it has cost me a lot personally, so the price I charged was probably negative) — and yet, I am bold enough to say, it remains unsurpassed.

Update from Facebook July 3, 2010:

Subroto Roy is pleasantly surprised to find a “senior journalist” speak a truth in today’s pink business newspaper about the origins of India’s 1991 economic reform, admitting: “Nor might the government have been able to justify liberalisation if it hadn’t been for the 1991 Congress election manifesto that Rajiv Gandhi had compiled, but tragically, not lived to push through.”   And who got Rajiv to do that? I did. On Sep 18 1990, based on the University of Hawaii Manoa project I had led since 1986.  Later, the process got corrupted by the greedy and the mendacious.

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10 Responses to “Sonia Gandhi on the origins of the 1991 economic reform (Revised 17 Dec 2012)”

  1. JGN Says:

    In my opinion,the late PVN Rao deserves credit for the liberalization.

  2. drsubrotoroy Says:

    The anonymous commentator above may find of interest here “Rajiv Gandhi and the Origins of India’s 1991 Economic Reform”; “The Dream Team: A Critique”; “The Politics of Dr Singh”; “Against Quackery” etc.

  3. JGN Says:

    Rajiv Gandhi became PM of our country in 1984. Why did he wait till 1991 to liberate Indian Economy from the Licence-Permit-Quota Raj? I am revolted when the Congress’s stooges attribute whatever achievement is there in our country to Nehru-Gandhi dynasty.

  4. drsubrotoroy Says:

    I am happy to engage my anonymous commentator on the facts. If he reads the last paragraph of my article here on my encounter with Rajiv Gandhi in 1990-1991, he will find it said: “Rajiv’s years in Government, like those of Indira Gandhi, were in fact marked by profligacy and the resource cost of poor macroeconomic policy since bank-nationalisation may be as high as Rs. 125 trillion measured in 1994 rupees. Certainly though it was Rajiv Gandhi as Leader of the Opposition in his last months who was the principal architect of the economic reform that came to begin after his passing.”

    Further, early on in the same paragraph will be found my condemnation of “the system of humbug, incompetence and sycophancy that surrounds politics in India and elsewhere”, which I am sure he would join me in endorsing. He may also like to read my general criticisms of Indian politics in, e.g. “Our Dismal Politics”, “Leadership Vacuum” and numerous other articles here, e.g.

  5. JGN Says:

    Dr Roy is a learned person and I do not want to waste his time but I still believe the 1991 economic liberalization was initiated at the behest of World Bank in the wake of Balance of Payment crisis. I do not expect Sonia Gandhi to admit this.

  6. drsubrotoroy Says:

    I do not think this a waste of time at all; to the contrary I think it calls for an enormous amount of serious doctoral-level research, none of which has happened yet. I have stated quite fully my experience of my encounter with Rajiv from Sep 18 1990 until his assassination, and the anonymous commentator is referred again to the draft Congress Party manifesto that I and some others submitted to the Congress President (following his Sep 25 1990 request) on March 23 1991. In addition to the articles mentioned already, my November 2007 article here “Sonia’s Lying Courtier” also may be of interest. As for the World Bank, I have yet to write of my experience as a short-term consultant there in the summer of 1992, and at the IMF in 1993, though I can say for the first time (a) that in September 1992, a very prominent member of the Government of India’s economic bureaucracy declared in a meeting of several score Indian economists at the World Bank in Washington that he himself was astonished by and had no explanation to offer of the high speed and depth of the new economic reforms emerging from the political process; and (b) the terms of reference of my brief hire by the World Bank’s then Vice President for South Asia involved my explaining to him what had happened in my experience with Rajiv in 1990-1991. I think it has been a large distortion (though one which is understandable because things seem apparently so to outside viewers like the business press) to say as many have done over the years that the reforms originated due to pressure from the World Bank or IMF in response to balance of payments difficulties; that, inter alia, would be to excessively flatter the commitment, rationality and capacity of the India-teams at the time of these organisations (or indeed any of their country-teams at any time). But there is, as I have said, vast scope for serious research on this subject, which is vitally important for a comprehension of what has happened since then, and hence the present economic situation too.

  7. William James Says:

    Seldom are significant reforms imposed successfully by international bureaucracies. Most often they are the result of indigenous actors motivated by domestic imperatives. I believe this was the case in India in 1991. It may have been fortuitous that Dr. Roy gained an audience with a receptive Rajiv Gandhi in 1990 but it was not luck that he was prepared with a well-thought out program; this arose from years of careful thought and debate on the matter.

  8. Sunil K. Aggarwal Says:

    Even a lay man will not believe the statistics being fed to the people of India by Dr Manmohan Singh and party: 9%+ GDP growth and the some rates of inflation on paper not matching with the real pinch on the ground.

    There may be something drastically wrong in these people’s formulae as pointed out by Dr. Roy in these pages.

    Most people in India still believe Dr Singh is the architect of indian economic reforms.

    It is a relief that a resolution has been passed by the Congress Party itself in 2002 that the architect of economic reforms was not him or PVNE but rather it was the manifesto document induced and approved by the late Rajiv.

    But still the credit has not gone to whom it is due i.e the research project of Dr Roy at the University of Hawaii from 1986 onwards.

    In India Montek S Ahluwalia is the name promoted and he seems the trusted man of Dr Singh. Both have in common that both of them had a lateral entry into the IAS.

    And now the proposed UIDAI authority is going to work under the planning commission as such no law has been passed yet but budgets have been allocated and one fails to understand that why such a executive function shall fall under the planning commission and not under the home or finance or some other executive wing, planning commission is an advisory and a non executive body.

  9. Anonymous Says:

    PV Narasimha Rao did the opposite of the manifesto.

  10. drsubrotoroy Says:

    The previous commentator seems unaware that there was a stark difference between the March 22 1991 draft of the Manifesto and the published document. The former contained constructive policies some of which were attempted to be followed, as has been described elsewhere.

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