Ripples of an old wave
S.Narendra
Indira Gandhi
The ripples of a wave
started in Bangalore’s
iconic Lalbagh glass house
in the summer heat of
1969 have not fully ebbed
even today in Indian
politics and economics. I was
privileged to occupy a tiny corner
when the nation’s affairs were
churning at that historic time and
again when there were attempts to
push the tide back decades later by
both the Congress and non-Congress
governments.
The Congress party had barely
managed to win a majority of seats in
1967 elections ; then Prime Minister
Indira Gandhi, picked by party
seniors, was expected to function as a
‘ghungi gudiya’. Against this
backdrop, the Congress was holding
its All India Congress Committee
(AICC) session in Lalbagh.
S. Nijalingappa
Then party president
S.Nijalingappa, a freedom fighter and
Gandhian, in his presidential address
had dared to suggest a change from
the Nehruvian socialist-economic
policy to a more market oriented one.
Mrs Gandhi countered it with what
she called as her ‘stray thoughts’ for
greater control over the economy,
including bank nationalization.This
latter idea had been vehemently
opposed by her deputy prime
minister who was also the finance
minister, Morarji Desai (I was working
as his information officer).
On the afternoon of July 14th,
some of the officers of the finance
ministry were called into the finance
minister’s room. Morarji Desai, with
great grace, thanked all of us and
announced that he had resigned from
the government,and drove off in his
private Fiat car.
Morarji Desai
A few minutes earlier, the news
agency PTI had put out that the prime
minister had taken over the finance
portfolio from her deputy prime
minister. Technically, she had not
sacked him.Next five days and
evenings I was asked to be at No 5
Rajendra Prasad marg,residence of
Desai, whose resignation had not
been accepted by Mrs Gandhi. My job
was to provide media interface,if
required by Desai. From the prime
minister’s supporters a media tirade
had been launched against Desai but
the latter refused to respond.
This July America had launched its
first mission to land a man on the
moon and its was to touch the
destination on Jyly 19th. This had
gripped the attention of the media
world-wide but in far way Delhi, the
media headlines were all on the
‘ghungi gudiya’ challenging the
established political order
(characterised as’ syndicate’, a
pejorative word meaning mafia), in
post-Nehru era.
The year 1969 was the
tipping point in India’s
import substitution
economy. It marked the
beginning of
government efforts for
gaining the commanding
heights of the economy.
In politics as well it was
a watershed moment.
Polarisation, bending of
institutions for political
purposes, media
manipulation in support
of spawning a political
cult fertilised by antipoverty
rhetoric, have all
flowed ceaselessly into
Indian politics from that
moment.
I.G. Patel
On the 19th afternoon, again PTI
announced that Mrs Gandhi had
accepted Desai’s resignation,followed
by a speculative report that
commercial banks were being
nationalized. I took leave of Morarji Desai and went to Dr. I.G. Patel, the
economic affairs secretary, in the
north block. When I timidly enquired
from him as to when the bank
nationalization proclamation would
be made, and took out a draft FAQ on
them I had prepared for his approval.
Dr. Patel, normally a soft spoken
and very curteous person lost his
temper. He was under pressure,
perceived as Desai’s favourite officer.
Yet he gave me the Ordinance copy.
I
rushed to my office to make copies
and distribute it to media. When I went through to understand its
import ,I discovered that it was an
Ordinance not about bank
nationalization buy aimed at banning
hoarding of metal Nayapaisa coins.
That was the government response
to the prevailing acute shortage of
small change. No media was
interested in this small change in the
news cycle.
Around 6 pm, Dr Patel called me to
his room,gave me a copy of the 14
banks’ nationalisation ordinance but
forbade me from leaving my office
until after 8.30, when the prime
minister was expected to make a
national broadcast on All India Radio.
The Ordinance was a 19 page
document.In that world without
photo -copiers and the Internet,,
making available this document in
hundreds of copies for media
distribution was almost an impossible
task, and, I was forbidden from
leaving my room!. As an aside, neither
the Reserve Bank nor the finance
ministry had much information about
the commercial banks.My own FAQ
on the the subject had been prepared
with the help of two persons who had
worked in the background in opposite
directions-one (Prof: S.K.Goyal) had
argued for Mrs Gandhi in favour of
nationalisation and the other (Dr.Pai
Pannadikar) had worked for Morarji
Desai to avoid it.
The government had taken over 14
commercial banks having deposits of
above Rs 50 crore. The basis for this
cut off figure had come from a series
of research articles published in the
Economic Times a few weeks earlier.
The total number of commercial bank
branches in India was about 5000;
their total deposit was far less than
that number, in crore.The 14 bank
owners were paid a grand sum of Rs
86 crore.
The political air was tense not only
in the corridors of power but in the
streets as well. From the prime
minister’s side her move had been
projected as a battle between the
poor and the exploitative rich and big
business.
That 19th July was the tipping point in India’s import substitution
economy and marked the beginning
of the government efforts for gaining
the commanding heights of the
economy. In politics as well it was a
watershed moment. From
radicalization, polarisation, bending of
institutions for political purposes,
media manipulation in support of
spawning a political cult fertilised by
anti-poverty rhetoric, have all flowed
ceaselessly into Indian politics from
that moment. In short, the foot -prints
of the economic decisions and
political behavior unleashed then can
be observed by a discerning eye in the
positive and negative currents of
contemporary India.
A few weeks back the election
verdict in the four states revived the
debate about the issues in play in
state assembly and parliamentary
polls. The victors arguing that the poll
result was a referendum on the
performance of the prime minister
and his government in Delhi,
countered by the loser that local
issues and state leadership’s were
responsible for their defeat.It was this
very argument,surfacing for the first
time in post independent India, that
was employed by Mrs Gandhi in
1969-70 to separate the state and
general elections.
Interestingly, her party had lost
power in several states in the earlier
1967 elections. In the 1970
parliamentary poll, un -encumbered
by state polls,Mrs Gandhi swept to
power with a massive majority.It is
very interesting that 50 years later an
incumbent party at the centre should
be wanting to undo this move,while
the opposition should be seeing a
conspiracy in such a measure.
The legacy of 1969 deserves a
closer and detailed look and this
series will attempt to explore its
manifestation in today’s political
economy.
S.Narendra,
Former Information Adviser to
PM and Principal Information
Officer, Government of India.