As he approaches the end of his third year as prime minister of India, Rajiv Gandhi looks back on a very bumpy road. He has been going in the right direction, but his steering has become more erratic. The most critical and urgent problems Gandhi faced when he assumed power in October 1984 were clear: (1) to resolve the debilitating political and religious violence in the northwestern state of Punjab and in northeastern India; (2) to reform the Indian National Congress Party and make it an effective political force that would promote his national and regional programs; (3) to invigorate the national economy, enhance productivity, stimulate both the private and public sectors and control the budget; and (4) to ease tensions with India’s neighboring states, particularly Pakistan and Sri Lanka. The rest of India’s foreign and domestic policy interests were all subordinate to these overriding objectives.
Gandhi took office with the strong support of the Indian press and public. The Congress Party, riding on his coattails, won an overwhelming victory in national legislative elections in December 1984. His economic and social objectives were clear and constructive. His early political efforts to reconcile conflicting forces in the Punjab, Assam and Mizoram and to ease relationships with India’s South Asian neighbors struck the right notes. His initial steps to free up the regulation-bound and high-tax Indian economy were cheered by domestic and foreign businessmen alike. And his first ventures into international diplomacy with the United States, the Soviet Union and Europe were marked by warmth and encouragement from all sides.
By mid-1986, however, Gandhi began to stumble in both domestic and foreign policy. The Indian press and intellectuals, always fickle, turned increasingly critical, sometimes with reason, at other times more unfairly. Despite agreements that had seemed momentarily to bring peace and quiet, tension in the Punjab remained serious, and religious and language disputes in Assam appeared no less intractable. The enthusiasm of some elements of the business community for the new prime minister cooled in the face of unaccustomed domestic competition induced by his reforms and aggressive government pressure on tax-evading corporate leaders. Budget deficits had been mounting each year, and fears of inflation increased...
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