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January 2019 Edition of Power Politics is updated.    Wishing You All a Happy New Year.       January 2019 Edition of Power Politics is updated.
Issue:January' 2018


Ripples of an old wave


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.