• JUNE 21, 1991. Pamulaparti Venkata Narsimha Rao is sworn in as the Ninth Prime Minister of India. Heading a minority Congress(I) government at the Centre. The Finance portfolio goes to Dr. Manmohan Singh, former Governor of the RBI, former economic adviser to the government, former IMF World Bank consultant. The same evening, a grim-looking Rao in his first televised address to the nation warns about the difficult crisis facing the Indian economy and about the “harsh, unpopular but unavoidable steps” his government may soon have to take.

  • July 1,1991. RBI announces a 10 per cent fall in the value of the Indian Rupee vis-a-vis the US Dollar, the British Pound, the Japanese Yen and the German Mark. The ruling party describes it as a “routine RBI operation”. The big lie is soon exposed when another 10 per cent devaluation is declared on July 3.

  • July 4. Commerce Minister P Chidambaram declares a new trade policy. All residual restrictions on imports are lifted with a single stroke of the pen. Rao again goes on the air and says, “complex maladies call for drastic remedies”.

  • July 4, 7, 11 and 18. The government airlifts a total of 46.91 tonnes of gold to London as security against a short term loan of $400 million from the Bank of England.

  • July 24. The government announces the new industrial policy. The word monopoly is banished from India's industrial dictionary. Licensing hassles are removed for all but eighteen industries. Most industries are also granted automatic approval for foreign technology agreements and 51% participation of foreign equity. And the territory of private sector is extended to all but eight industries.

The same evening, we have the long-awaited budget. Fertiliser prices are raised by 40% (later the hike is brought down to 30%) and ration sugar declared dearer by a rupee per kg. Petrol and cooking gas are rewarded a 20% price-hike. Other less fortunate commodities attract only a 5% hike in excise duty. The campaign for privatisation is declared open with a Rs. 2,500 crore sale of 20% equity of selected public sector undertakings.

Meanwhile, all through July New Delhi keeps playing host to successive teams of IMF and World Bank representatives. Official propaganda is of course not allowed to get polluted with minor details like the agenda and outcome of these meetings. But thanks to the print media, we all know the state secret that the government is negotiating a $5-7 billion loan from IMF, in lieu of its commitment to carry out a typical IMF package of “structural reforms.”