India

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India in the 1990s

Corruption was the main issue in the 1989 elections. Once again the Congress (I) lost its power, this time to a coalition led by V. P. Singh, who had served as Rajiv Gandhi’s finance and then defense minister before being expelled from the Congress (I) Party for investigating corruption allegations. Singh’s National Front coalition collapsed when L. K. Advani, the leader of the Hindu nationalist Bharatiya Janata Party (BJP), was arrested for campaigning to replace the 16th-century Babri Masjid (Mosque of Babur) in Ayodhya with a temple to the god Rama. The BJP withdrew its support for Singh’s government. The government that replaced it, led by Chandra Shekhar, was scuttled in 1991 by the Congress (I) Party, which had initially supported it. In the meantime, India’s finances were badly hit when Iraq invaded Kuwait in 1990: Remittances from Indian workers in Kuwait and Iraq abruptly ceased, and the workers had to be brought home at great cost.

In May 1991 Rajiv Gandhi was assassinated by a Sri Lankan Tamil terrorist during a campaign rally. The assassination disrupted the May elections, and a second round of voting was scheduled for June. P. V. Narasimha Rao, who had once served as Gandhi’s foreign minister, was chosen to replace Gandhi as head of the Congress (I). Rao led the party to a near majority in the second round of voting, and took office as India’s new prime minister.

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Economic Reform

When Rao took office, India was facing an economic crisis that threatened the country with bankruptcy. Rao made economic reform the first item on his agenda. Under his reforms, many of the most burdensome controls on private enterprise, such as licenses to build or expand factories, were abolished. His government also welcomed foreign investment, and lowered tariff rates to encourage trade.

India’s economy responded with growth in the gross domestic product, a rapid expansion of trade, and new vigor in the private sector, visible in new products from automobiles to breakfast cereals. Other parts of the reform package were only partially implemented. Subsidies to farmers were cut barely at all, privatization of public-sector enterprises was attempted with great caution, and little was done to change laws that made labor management difficult. The states began to compete vigorously for private investment, including foreign investment, and also took some small steps to privatize their own public-sector enterprises.

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Hindu Nationalism

The economic policies were put in place with surprisingly little political resistance. This was due perhaps to other major political issues commanding attention at the time, including Hindu nationalism. Faced with a militant movement with links to the BJP to demolish the Babri Masjid in Ayodhya and build a Hindu temple there, the Rao government decided to accept the assurances of the BJP government of Uttar Pradesh that the shrine would be protected. But in December 1992 gangs of militant Hindu youths stormed the mosque and demolished it, sparking serious protests by Muslims, police firings, and then Hindu-Muslim riots, with a particularly terrible one in Mumbai; thousands lost their lives.

Militant Hindu nationalism had apparently peaked, however. In March 1993 bomb blasts in Mumbai severely damaged the Bombay Stock Exchange and killed several hundred people, but the bombing did not spark riots, even though it was widely assumed that Muslim extremists were responsible. The BJP, whose governments in several north Indian states had been dismissed by the central government in the aftermath of the Babri Masjid demolition, faced united opposition in the elections of November 1993 and fared poorly.

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Rise of the BJP

The 1996 elections ushered in a period of unrest in India and concern on the part of foreign investors. The Congress (I) lost its majority, forcing Rao to resign as prime minister. The central political issue had become the corruption of the most senior politicians. Amid allegations of corruption, Rao retained his parliamentary seat but resigned as party president. He was indicted for corruption in 1997, as were a number of his former cabinet colleagues. Members of other political parties—with the exception of the Communist parties—were also implicated in bribery and kickback scandals. With the continued investigative vigor of the press and a newly energized judicial system, the revulsion of most Indians against corruption became evident.

The BJP, which had toned down its emphasis on Hindu nationalist demands, won the most seats of any party in the 1996 legislative elections. Having fallen short of a majority in the parliament, the BJP formed a coalition government with its allies. BJP leader Atal Bihari Vajpayee became prime minister. After only 13 days in office, however, Vajpayee resigned when it became clear that he would not pass a confidence vote by the parliament.

The leftist coalition United Front, which had the second highest number of parliamentary seats, formed a government under Prime Minister H. D. Deve Gowda with the help of the Congress (I) Party and several smaller regional parties. Gowda’s government, however, had only been in power for nine months when the Congress (I) withdrew its support, demanding Gowda’s resignation. In order to avoid new elections, Gowda resigned and Inder Kumar Gujral, also of the United Front coalition, assumed the position of prime minister with support from Congress (I). Still, the Indian government remained shaky. In the fall of 1997, Gujral resigned when the Congress (I) once again pulled its support of the coalition, this time over differences relating to the investigation of Rajiv Gandhi’s assassination.

In the March 1998 elections that followed, the BJP and its regional party allies won a majority of seats in parliament with 35 percent of the vote. A coalition government took office, led by Vajpayee of the BJP as prime minister.

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Relations with Pakistan

Two months after the 1998 elections, the new BJP-led government followed through on its controversial pledge to make India into a nuclear power. In its first atomic tests since 1974, India detonated five nuclear devices underground. Pakistan responded with its own nuclear tests, arousing fears of a regional nuclear arms race. A number of foreign governments declared sanctions against both countries to express disapproval of the tests.

Tensions eased somewhat in the months following the nuclear tests, as India and Pakistan both declared moratoriums on further testing and entered into negotiations sponsored by the United States. Some economic sanctions were lifted at these signs of progress. In early 1999, after months of talks, the leaders of India and Pakistan signed the Lahore Declaration, which expressed the two countries’ commitment to improve relations between them. However, fears of an arms race revived in April, when first India and then Pakistan tested medium-range missiles capable of carrying nuclear warheads.

Relations between India and Pakistan were further strained by their longstanding territorial dispute over the region of Jammu and Kashmîr. A Muslim separatist insurgency that emerged in the region in 1989 had become increasingly militant and violent, leading to periodic escalations of violence.

In May 1999, Muslim separatists widely believed to be backed by Pakistan seized Indian-controlled territory in Jammu and Kashmīr. Fighting between Indian forces and the separatists raged until July, when Pakistan agreed to secure the withdrawal of the separatists, and India suspended its military campaign. However, the territorial dispute continued to be a major obstacle to the normalization of relations between the two countries.

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India into the 21st Century

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