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.

Gandhi’s image as a calm, dignified, reflective leader was marred by outbursts of temper and aberrant behavior. Senior bureaucrats were embittered over major changes in personnel policies and resentful at the prime minister’s brusque treatment of them. Relations between Gandhi and Indian President Zail Singh grew increasingly strained, as did Gandhi’s ties with many leaders in his own party.

By the time of the March 1987 elections in several states, the Congress Party had lost control of one third of the 18 Indian state assemblies that had been under its leadership two years earlier. The honeymoon was over for Gandhi. Indeed, it must be hard for him to remember that there ever was one.


Rajiv Gandhi is not a politician by instinct. Although he has dealt ruthlessly and adroitly with challenges to his personal power, virtually no Indian, friend or foe, believes that he enjoys the give and take of politics, that he likes dealing with politicians, that he has a feel for what will work and what will not, that he knows when to yield and when to be firm, when to induce and when to threaten. Nor does he have a group of dedicated and loyal advisers and friends deeply experienced in politics upon whose judgment he can rely.

Gandhi started with a small coterie of energetic, intense, seemingly able men mostly his own age, many of them old friends. Gradually they drifted away. He had a falling out with one of his closest early advisers, Arun Nehru, who apparently began to believe that he might make a better prime minister than Rajiv. Another, Arun Singh, was shifted to a sub-cabinet level position for similarly vague reasons, and his influence faded further—according to Delhi gossip—as a result of personal clashes between his wife and Sonia Gandhi, Rajiv’s Italian-born spouse. Gandhi’s close friendship with a third, Amitabh Bachchan, India’s premier film idol and now a member of Parliament, aroused considerable private and press criticism and scorn for alleged influence-peddling and on the grounds that film stars may not be the best advisers on national policy. At the same time Gandhi purposefully held himself aloof from many older Congress Party politicians, arguing with verve and logic (if not political discretion) that the country and party needed new blood and fresh views.

Gandhi tried from the beginning to assert his independence, to show his determination to achieve results and reject shoddy work, and to exercise personal control over the cabinet, the bureaucracy and his party. But for many Indians his efforts have been marked by seemingly arbitrary turns and shifts in policy and personnel that raise questions about the new prime minister’s judgment, or at least his patience.

He has shuffled his cabinet nearly ten times, shifted senior bureaucrats again and again, dismissed or changed top Congress Party functionaries, including vice presidents of the party (of which he is the president), as if he were operating a revolving door, fired his personal drivers and security aides, and insulated himself from most people in his party who criticize his political judgments (although he remains accessible to some businessmen who are willing to speak frankly). As Gandhi has come under stronger criticism over specific policies, he has become increasingly combative and sarcastic in Parliament. He is often witty but more commonly abrasive, and his relationships with back-benchers in his own party—including many of the younger ones he earlier tried to cultivate—are increasingly strained.

Thus Gandhi has come under criticism as much for how he has made cabinet changes as for why he has made them. The most dramatic example, coming in February 1987, only weeks before the presentation of the Indian budget for 1988, was the shift of his widely respected minister of finance, Vishwanath Pratap Singh, from the treasury to become minister of defense. Mr. Singh subsequently resigned this portfolio in April, nominally over his initiation of a complex investigation of corruption and kickbacks in defense contracts, but more probably because Gandhi was uneasy with Singh’s personal stature and independent behavior in the cabinet.

The sudden and embarrassing public revelation in January 1987 that Foreign Secretary A. P. Venkateswaran was to be replaced for no apparent reason other than his forthright independence (following Gandhi’s rebukes to several other senior officials only a short time before) similarly caused a national stir that lasted for several weeks and seriously damaged Gandhi’s reputation for judgment and manners as well as weakened his position among many members of Parliament and the civil service.

To some extent Gandhi’s behavior reflects personality traits—pride, vanity, arrogance, even vindictiveness—that his grandfather, mother and late younger brother Sanjay shared in full measure. In Jawaharal Nehru and Indira Gandhi, however, these were compensated for by a record of remarkable achievement over many years, the building up of political debts from many national and regional politicians and, most particularly, by a finely honed political sensitivity.

Some Indians attribute Gandhi’s political problems—which the Indian press often describes as reflecting "immaturity"—to his having grown up in a privileged environment in which he rarely had to deal with ordinary Indians, certainly not with villagers. Others allege, probably unjustly, that he lacks Nehru’s historical awareness or his mother’s more visceral feel for the importance of religion in Indian life and that this explains some of his difficulty in dealing with Sikh nationalism, the slowly growing influence of nationalistic Hinduism (and consequent Muslim resentment) and the forces of regionalism, which have always been present but appear once again to be on the rise in India. Still others look more sympathetically to the psychological effect of the isolation imposed on Rajiv after the assassination of his mother and a number of other senior Indians in the last two years, as well as the nearly successful attempt on his own life in October 1986, which has forced the young prime minister and his family to live an artificial and stultifying personal and political life within a cocoon of tight security.

It is difficult not to feel some sympathy for Rajiv Gandhi when, faced with these personal and family strains on top of his formidable official responsibilities, he breaks away from the controls placed on him, loses his temper, drives rashly by himself at breakneck speeds around Delhi, and even bolts from his car—to the dismay of his security escorts—to try his hand at hang gliding at a local airfield.

Much of the sharpest criticism of Gandhi’s personal behavior is limited to the big cities, and mainly those in the north. According to the polls, men are markedly more critical of the prime minister than are women. But Gandhi’s actions on certain issues—Hindu-Muslim relations, the intellectual poverty of Congress Party leadership, and, above all, rising prices—affect all Indians. Gandhi may still have much of the appeal he and his charismatic family have always had among the masses. Congress has won most of the parliamentary by-elections since 1985, although by declining margins. But in state elections—where local issues, local politicians and local pressures are predominant—the prime minister’s national image plays a much weaker role. Not only did the Congress Party perform more poorly in state elections in 1985 than in the national elections that year, but in the series of state elections in 1987 Congress Party candidates for state legislatures in Mizoram, Kerala and West Bengal failed to benefit substantially from Gandhi’s vigorous campaigning. The growing concern of Congress politicians as to Gandhi’s ability to help them win elections is particularly dangerous for him in pursuing his policies in the future, and potentially even for remaining in power. Haryana, a key small northern state where Gandhi has deferred elections once already for fear of defeat, will be his most critical test when elections are finally held in June 1987.


The major problem that Gandhi has singularly failed to solve in the last two-and-a-half years, and which he must successfully manage in the second half of his five-year term, is the revival and strengthening of the Indian National Congress Party. Solutions to India’s long-term problems—accelerating economic growth and modernization, controlling population growth (at present rates India could nose out China as the world’s most populous nation in another generation), averting environmental disaster from soil erosion, pollution and deforestation, providing better education, housing, health, transportation and energy supplies, and assuring Indian national security—are all fundamentally dependent on political stability, political support and political mobilization.

Traditionally the Congress Party was a movement rather than a real political party. Its strength came from its role as the organizer and mobilizing force behind Indian independence from British rule. After independence, pieces continually broke away from the movement to form separate parties, some based on ideological and policy differences, others centered around caste or factional leaders who could no longer work with Nehru, Indira Gandhi or, more recently, Rajiv. As this happened the party increasingly became identified with the personality of its leader. The dominant branch of the party is Congress-I (Indira), but a number of other variants have come and gone.

Congress-I’s platform is a mishmash of appeals to every theme and doctrine that has had an attraction for one or another of the party’s factions. Congress-I has lost much of its original proud appeal as the party of the poor and downtrodden and has become for many a symbol of corruption, special interests and, above all, patronage. It has gradually become less effective at the state level as new local political parties have taken shape that promise to serve specific regional objectives under the banner of local cultural, linguistic, ethnic or economic interests. Politicians and politics of all stripes are granted less respect by most Indians.

Much of this decay was a result of Indira Gandhi’s own successful effort to hold onto power within the Congress Party during her 18 years as prime minister. No internal party elections have been held to select local committees and leaders since the early 1970s. This enabled first Indira and now Rajiv to be the sole formal dispensers of power within the party. But it has also progressively weakened the ability of the party apparatus to rally new supporters, to act as a mobilizing force to help popularize and implement new policies and as a channel of reliable information upward about grass-roots concerns, and to resist the gradual attrition of Congress power and influence at the state level.

Early in his administration Gandhi seemed to acknowledge all this. He announced plans to hold early intraparty elections, to bring in tens of thousands of new members from the young educated elements in society, and to march the party into the 21st century. When he addressed thousands of party veterans at the 100th anniversary of the party in Bombay in December 1985 he strongly and accurately criticized the Congress for what it had become and called for it to be born again—fresh, invigorated and honest. Most of the stilled and generally sullen older party leaders and hangers-on present clearly understood what he was saying, but it was their careers, power bases and practices that he was condemning. Small wonder most were indignant at his criticism and at his decision to speak out on that occasion. A senior party member compared it privately with "sneering at the bride’s beauty and the bridegroom’s prospects while presiding at their wedding."

The enormous disarray of party records, allegedly including hundreds of thousands of names of bogus party members, forced Gandhi in mid-1986 to cancel party elections; high party leaders privately say the elections may now be held in 1988 but certainly before the next national elections, due by the end of 1989. By then, they say, Congress must be turned into a genuine political party even if some members again split away. Younger, more educated party leaders will be sent to the states to organize this new Congress, and thousands of young teachers, engineers, lawyers, businessmen and educated farmers will be recruited as new members.

Cynicism about the prospects for this strategy is deep and widespread. Indeed, little had been accomplished by May 1987. The grass-roots political power of older leaders remains strong both for cultural and caste reasons and because of the economic influence of the groups they represent and the personal patronage they have wielded for years. The process of reform is more likely to alienate party members than it is to attract a "new breed" for the future. As one sharp-eyed member of Parliament observed early in 1987, "When you walk by the national headquarters of the Congress Party [in New Delhi] and see no cars or people waiting to see party officials you know how much influence the central organization has!"

The key issue is that, in order to reform the Congress Party, Gandhi must be prepared to risk losing control. In 1969 his mother understood this, accepted the creation of rival factions and emerged triumphant in her faction, which became dominant. Rajiv’s critics complain that he has been willing to take the wrong kinds of risks with the party, including Congress defeats (or coalitions with Congress in a minority) in state elections in the interest of local peace and reconciliation. But these risks, while possibly worth taking in the national interest, nevertheless weaken his ability to rally his own supporters behind him in a future, larger struggle for control of the national party.

Still, Gandhi has the satisfaction so far of seeing virtually no national figures capable of mounting a successful challenge to his position. Within the Congress Party there are many members of Parliament who might rally behind a plausible alternative, but no one stands out with the national reputation, energy, broad political support and ambition to rival Gandhi. The opposition is effective at local levels; nevertheless, only one state leader, Ramakrishna Hegde, the Janata Party’s chief minister in the southern state of Karnataka, has a national reputation for integrity, intelligence, personal charm and political shrewdness. Hegde’s prospects of bounding from Bangalore to New Delhi are slim, however, unless a dramatic anti-Congress wave rises before the next parliamentary elections.


Violence has been a companion of politics in India since independence, and it has not eased in the two-and-a-half years of Gandhi’s tenure. Violence in the Punjab has centered on Sikh demands for greater autonomy or even independence. Violence in the eastern state of Assam continues over the desire of Assamese-speaking Hindus to expel or disenfranchise Bengali-speaking migrants. Violence between young Tamils in Sri Lanka demanding a separate state and the majority Sinhalese population and government continues to poison relations between the two countries and threatens political unrest in the south Indian state of Tamil Nadu. Another less conspicuous problem, now resolved, was the violent, drawn-out struggle by Mizo tribesmen in the former territory of Mizoram for national autonomy.

Gandhi’s performance in each of these areas is the subject of considerable debate inside India, but he clearly has done better than many thought possible. Unlike Indira, who was instinctively tough and even brutal, Rajiv has looked for accommodation and reconciliation. Nevertheless he has not yet shown the political skill to turn his achievements to full political account.

Mizoram. In this mountainous eastern region, Gandhi offered amnesty and participation in a Congress-supported coalition to a band of hardy tribal guerrillas, who had been fighting for years, in exchange for their willingness to accept the results of a democratic election. Apparently at Gandhi’s insistence, the February 1987 election was both peaceful and honest. But Congress lost; the former guerrilla leader, Laldenga, backed by his own local party, is now ensconced as chief minister of the newly formed state of Mizoram.

Assam. The same approach seemed to succeed in Assam. Through quiet and steady negotiations in 1985, Gandhi’s government worked out an agreement that appeared to satisfy the minimum requirements of both Assamese and Bengalis in the state. A new election was held in which the Congress Party was also defeated. A new state government, consisting mainly of 20- to 30-year-old student leaders of an Assamese regional party, assumed power in early 1986.

Nationwide and within the Congress Party there were nevertheless misgivings about this result. Vested Congress interests were more deeply entrenched and valuable in Assam than in Mizoram; the election produced a flight by the traditionally pro-Congress Muslims away from the Congress Party to a new minority-oriented local party. Furthermore, many Indians were genuinely uneasy about the legality, or at least the ethics, of an agreement that accepted the disenfranchisement for ten years of persons who could not prove they had been in Assam before 1969.

In the year it has been in power, furthermore, the new state government has been incompetent and corrupt in dealing with economic problems. It has also winked at the resort to violence over ethnic and communal disputes. Gandhi may have bought a limited peace and some relief from earlier high levels of conflict, but the underlying cultural and linguistic tensions in Assam remain unresolved.

The Tamils in Sri Lanka. How to cool nationalist fervor in Tamil Nadu, avert a successful separatist struggle in Sri Lanka that might set a precedent for similar movements inside India itself, and avoid regional tensions that could engage outside powers are the central challenges Gandhi has faced in handling the Sinhalese-Tamil conflict. Gandhi early on reassured Sri Lanka that India would not use force against the island republic. He moved carefully but steadily to close down most of the training camps for Sri Lankan Tamil guerrillas that Mrs. Gandhi had permitted to operate. He deployed a stream of emissaries to talk with all parties and held a series of high-level meetings with Sri Lankan leaders in India and Bhutan, as well as with representatives of the Tamil insurgents.

All this has eased but not solved the problems Gandhi inherited two-and-a-half years ago. New and increasingly deadly outbreaks of violence and terrorism occur almost every month. But Gandhi deserves credit for keeping this dangerous political problem within bounds thus far in south India and for not succumbing to political pressures either to abandon his mediating efforts or to intensify pressure on Sri Lanka, even though violence inside Sri Lanka has increased in 1987.

The Sikhs in the Punjab. The most explosive political problem in India was and remains the Sikh political and religious protest in the Punjab. Gandhi’s approach to the Punjab crisis closely resembles his efforts to cope with other regional and communal issues—looking for an individual or group with whom he might negotiate a settlement, avoiding the use of excessive force, and looking to compromise and the democratic process to bring about gradually communal and political harmony. He found a Sikh leader willing to risk this course in the late Harchand Singh Longowal, the Akali Dal party chief whom many radicals and moderates seemed willing to support, and with whom a complex agreement was concluded in July 1985. The agreement conceded a number of Sikh demands in exchange for the promise of civil peace and the restoration of order.

Indian political commentators and politicians continue to argue bitterly over whether the agreement was ever viable. Longowal was promptly threatened with death by the ultra-hardliners in the Sikh movement for having sold out, and was assassinated within a month. Gandhi has been unable to implement some key provisions of the accord—transfer of the city of Chandigarh to Punjab control, release of all Sikh prisoners, and readjustment of the Punjab border and of water flows. He did, however, hold fast to one of his commitments—to hold local elections—despite strong criticism from his own party and political opponents who wanted him to continue to govern the state from New Delhi until violence and disorder could be ended. Gandhi was convinced that failure to allow elections would leave the central government exposed to blame for violence and all other ills in the state, would continue to polarize Hindus, Sikhs and possibly other religious communities, might precipitate new communal violence in Delhi and elsewhere, and would represent an abandonment of efforts to restore a political process in the state.

In the elections to the state assembly held in September 1985 the moderate Sikhs won 73 out of 115 seats. But this did not bring peace: the following year witnessed a series of violent incidents, any one of which could have set the state and northern India aflame with communal violence. Hundreds were killed in individual incidents in the Punjab—including ghastly killings on buses, in shops and in the streets, a nearly successful assassination of the Punjab police chief and his wife, and the assassination in another state of the former chief of staff of the Indian army, who had authorized the 1984 raid on the Golden Temple in Amritsar.

Nevertheless, over time the balance of sentiment in the Punjab appears to have shifted toward the moderate regional Sikh political leaders, who are prepared to work toward accommodation with New Delhi, and away from the most radical advocates of an independent Sikh state of "Khalistan" and their terrorist supporters. The bulk of Punjabi middle-class farmers and urban residents, including many young Sikhs, seem increasingly weary of the violence and ready to support a moderate government. Nevertheless, killings have continued, and in mid-May New Delhi took over state administration from the elected government. It was probably no coincidence that a week earlier elections were announced for mid-June in the neighboring state of Haryana, where a hard-line, law-and-order policy against Sikhs has strong appeal among the Hindu farmers on whom the Congress Party’s hopes for an election victory depend.

Gandhi’s policy in the Punjab was designed to: (1) prevent violence from spreading to other parts of the country; (2) weaken, even if not eliminate, terrorist Sikh groups; and (3) begin to restore a political environment in which communal tensions could eventually be healed. It did not achieve all these objectives, but its direction was clear and sound. Gandhi’s most recent decision to abandon the moderate Sikh administration in the Punjab may be shrewd politics, and in the short run it may enhance security in the state. But in the longer run it may also arouse a new sense of betrayal among the Sikhs and undercut his broad national strategy.


Communalism and regionalism are the two dark demons that continue to lurk in the corners of Indian political life. Millions were killed in the process of dividing British India between Muslim Pakistan and predominately Hindu India (although India remains firmly committed in principle to constitutional secularism), and there has hardly been a year since 1947 in which thousands have not died somewhere in India through violence that has religious or ethnic roots. Mizo, Assamese, Tamil and Sikh tensions all come from these sources, as does the remarkable growth of local parties. Rajiv Gandhi certainly understands this. In a mid-1985 interview he singled out caste, regionalism and language, along with overpopulation and economic development, as India’s most serious problems.

In the last two years Muslim and Hindu workers and upper-and lower-caste Hindu students have fought repeatedly in the west Indian textile and manufacturing center of Ahmadabad over "turf," jobs, educational privileges and religion. Rival castes (often representing landlords and peasants) have fought pitched battles in half a dozen states. Students and workers have clashed in the western cities of Belgaum and Goa over local language use. Hindus and Muslims have bludgeoned one another to death over parade routes, seemingly inconsequential fictional references to the Prophet, and access to temples or mosques. Middle-class farmers and urban residents in nearly a dozen Indian states have fought with representatives of higher and lower castes over the allocation of quotas in high schools, colleges and government offices to which they are entitled under the Indian constitution. In some states as many as 80 percent of all such positions are reserved for lower castes, creating grave dissatisfaction among those denied these privileges.

None of this is new in India. But as the population grows and awareness of "a better life" spreads, the struggle for educational opportunity and good jobs is intensifying. Already hugely overcrowded cities like Bombay, Delhi and Calcutta continue to grow rapidly as millions of rural Indians flood into them looking for jobs. Provincial centers like Bangalore, Jaipur, Poona and Madurai, and even summer vacation towns redolent of Kipling stories like Darjeeling, Mussoorie and Simla, are becoming major urban areas, outgrowing their colonial-era infrastructures. Crime, often linked to the spread of drugs, has been increasing rapidly. Heroin and its derivatives are found in every major population center, filtered in through the Punjab and Madras by Sikh or Tamil couriers who use the proceeds to support their violent activities, and by sea through numerous purely criminal channels, which some Indians pointedly identify as usually Muslim-controlled.

Illegal drugs are as difficult to deal with in India as they are in the West. Abysmally low pay scales for police and municipal and state officials, the lure of quick gain for the unemployed youth and the accessibility of narcotics along a long, smuggler-permeable border suggest that this will be a steadily rising problem for Gandhi, and India, for years to come.

Indian national and local government officials are aware of all these problems but have done relatively little about them. Political instinct seems to be to deal with these issues one by one as they become critical. A senior Indian government economist agrees, for example, that urban blight—clearly visible to anyone who revisits India even after only a year or two away—should have been high on the national agenda for the Seventh Five-Year Plan, which began two years ago. Shortages of resources and other priorities forced a deferral of this problem until the next five-year plan; by then, however, finding remedies will not only be more difficult but far more costly.

Not only are these issues intractable, but Gandhi’s own judgment in dealing with some of them has been called into serious question. Early in 1986 he was suddenly confronted by a minor legal case involving a Muslim woman seeking alimony from her divorced Muslim husband. However, the basic political issue—whether Indian civil law or Muslim religious law applied—swiftly became a national cause célèbre that sharply divided both the Muslim and Hindu communities and raised a host of fundamental issues about the role of religion in Indian society.

Modernists on all sides (as well as Hindu nationalists who reject any special treatment for Muslims) strongly favored confirming that the civil law, requiring alimony, applied; conservative Muslims insisted traditional Islamic law applied and that the government could not tell a Muslim what to give his divorced wife. Gandhi—whose instincts were on the side of the secularists—temporized, listened to advisers who worried that Muslim support for the Congress Party might slip, and eventually supported the Islamic conservatives. Then, as a compensating gesture to conservative Hindu nationalists, a local court—probably with New Delhi’s urging—suddenly opened to Hindu worship a building in a northern town that had once been a Muslim mosque but had been locked as a result of a dispute going back to 1949. A similar incident involving yet another disputed mosque/temple site was handled in a similiar fashion a few months later.

Gandhi lost on all counts as a result of these decisions: Muslim and Hindu riots and demonstrations throughout northern India erupted and have continued sporadically since; Muslims abandoned their traditional support for the Congress Party in state elections in the north, east and south anyway; a widely respected young Muslim member of his cabinet resigned in protest and began quietly working against the prime minister in Parliament and elsewhere among Muslim groups; Hindu nationalist groups became increasingly belligerent in northern and western India; and Gandhi’s image as a man of principle and supporter of a modern and secular India suffered severely.


When Rajiv Gandhi assumed power his economic priorities were to accelerate the pace of the Indian economy by encouraging the private sector, removing barriers posed by red tape and bureaucratic inertia, and reforming the leaden performance of the state-owned sector of the economy. He also promised to eliminate poverty and encourage rural development, but, while presumably sincere, these pledges were taken as rhetorical IOUs for the much longer term.

Gandhi was fortunate in having an excellent financial and economic team willing to take at least some chances. This has resulted during the last two years in some administrative reform, considerably higher industrial growth and a tightening of tax collections. India’s gross national product has grown by roughly five percent over the last two years, an excellent rate by Indian standards; imports, particularly of producer goods, have risen sharply; agricultural growth has been sustained and government grain reserves have grown to 25 million tons; and Indian capital markets have taken on new vitality as businesses have sought new funds for expansion.

On the other hand, exports lagged alarmingly until late 1986. The grain surplus is an embarrassment, as New Delhi has promoted exports only hesitantly, moved slowly in looking for alternative uses for the grain, failed to build adequate storage facilities and done relatively little to distribute effectively more food grains to those in need. India’s exports remain essentially the same old commodities and textiles that have made up India’s trade lists for years, with the exception of precious stones and jewelry (a rapidly growing new industry apparently based in part on dealings with subsidiaries of the South African De Beers group). By late 1986 the capital markets revealed their vulnerability to speculation, and the stocks of several major corporations crashed with heavy losses to smaller investors.

Gandhi’s well-known fascination with electronics and telecommunications, his bellwether for India in the 21st century, has produced favored treatment and rapid growth in this sector. New telephone and switching equipment was ordered mostly from European and Japanese manufacturers; large contracts for computers were concluded, including several with American suppliers after prolonged and difficult struggles within the U.S. government over the risk of transferring such capabilities to India; and agreements were negotiated to expand research and cooperation with a number of European countries and the United States and the U.S.S.R.

But much of the growth in high-tech industry has been in assembly of costly, imported components; overexpansion produced growing numbers of bankruptcies among smaller firms early in 1987. Excess capacity in automobiles, motorcycles and scooters required serious readjustments in this sector as well and forced the government to withdraw some of its market liberalization measures. The easing of government tax rates and licensing requirements—designed to encourage private investment and business decision-making—was matched by intensified and unaccustomed investigations by the Finance Ministry’s enforcement branches of tax and foreign-exchange evasions amounting to tens of millions of dollars. The investigations swept up in their nets some of India’s most prominent business families as well as close political friends of Gandhi himself.

Business criticisms of some of Gandhi’s economic policies, strong corporate pressures to shift Finance Minister Singh away from his economics portfolio, and efforts by some business groups to constrain the market entry of new firms—including some with foreign partners—mounted in the last year. The safe and stable seller’s market that for years had enabled most Indian businessmen to make enormous profits regardless of the quality and price of their products was looking more attractive, at least to an influential portion of the business community, than Gandhi’s and V. P. Singh’s more daring and innovative economic policies.

Gandhi yielded on some minor points and halted new reforms. But enhancing India’s economic competitiveness is critical to everything he hopes to achieve, and he must build political support for his economic policies. The appeals of socialism, social equity, public welfare and state ownership remain politically strong in India after nearly 40 years; building support for economic reforms that threaten these cherished values may prove more difficult than Gandhi anticipated.

It is difficult to measure change in rural India, but Indians who travel widely and know the countryside well say that rural development programs are actually most effective in the opposition-ruled states, where local initiative has been responsible. Gandhi has personally supported population and family planning programs, but these have moved slowly up to now as memories linger of the draconian attempts in 1975-76 to compel Indians to practice birth control. Nevertheless, research on a wide range of new family planning techniques may yield major progress in the next two years.

In the modern sector Gandhi’s reforms have not reduced the dismaying inefficiency of most state-run corporations. New chairmen with private business experience have been put in charge of some key companies—the State Trading Corporation, Indian Airlines and Air India among them—and in time this may yield results. But the new administrators themselves are frustrated by the dimensions of the reorganization and improvements needed. The coal industry has made some progress under prodding from the energetic and determined energy minister, Vasant Sathe, but remains grossly overstaffed. So is the public steel industry, whose high prices, along with high electricity costs, are an important reason given by most businessmen for the failure of many Indian manufacturing exports to be competitive internationally.

Some observers hoped, without much specific evidence to go on, that Gandhi would undertake more radical reforms in the public sector, including selling off or closing down some companies. He has not done this. Nor has he seriously considered reforms to deepen the government’s shallow fiscal base in which income tax plays a very small role, agricultural and land taxes virtually none, and excise and sales taxes and tariff revenues bulk large.

All in all, Gandhi’s economic record, although on balance positive, has been neither a singular success nor a dismal failure. Measured against expectations—perhaps excessive—it has been disappointing. Early on the new prime minister told an interviewer that "hard work and slogging and time" were the only ways to progress in India. His style, however, is widely perceived as impatient—in the words of an Indian editor, as "wanting to pick the fruit without tending to the root." Above all, Gandhi has sometimes appeared insensitive or indifferent to the need to build constantly and refurbish political support for his economic policies. In sum: good intentions, some progress, frequently weak implementation, poor politics.


The new prime minister’s central foreign policy concerns, like those of his predecessors for the last two decades, are to better relations with India’s neighbors and with the United States and the Soviet Union.

Gandhi’s first visit to the United States, in the spring of 1985, to meet President Reagan and open the yearlong Festival of India was an unqualified success. His robust physique and his calm, charming, somewhat self-effacing manner projected well on television and before American audiences, including the Congress. Most important, he and President Reagan established a good personal relationship, which has clearly helped over the last two-and-a-half years to sustain one of the warmest and most upbeat periods in Indo-U.S. relations of the last four decades.

Gandhi has sharply reduced the anti-American flavor so common in much of Indian diplomatic and political statements in previous years. But like his mother he has found it hard to resist complaining to domestic audiences of "foreign interference" in Indian politics, invariably a code for the United States, Pakistan or China, and the frequency of these references has increased recently. Nevertheless, the atmosphere of the Indo-U.S. dialogue has improved, and the prime minister’s fascination with modernizing India and his encouragement of the Indian private sector have attracted an interested wave of private American businessmen and bankers and trips by members of the U.S. cabinet over a two-year period.

Developments on the trade and investment front, however, have been neither as encouraging as some had hoped nor as unrewarding as others had feared. American exports to India, including high-tech telecommunications equipment, actually declined between 1984 and 1986; Indian exports to the United States increased only slowly, although the Indians were pleased—and somewhat surprised—at American encouragement of trade and, most recently, at U.S. generosity in negotiating an increase in Indian textile exports. American technology transfers and joint ventures led all such foreign collaborations, but total U.S. investment was still barely $500 million by the end of 1986. A large Du Pont chemical fiber venture could, however, increase this level substantially in 1987 to $600 million.

Nervousness in the Pentagon about transferring high technology to India has been a continuing source of frustration to the U.S. Department of Commerce, the State Department and the Indians. Nevertheless both civilian- and military-type aircraft engines, naval engine technology and small quantities of military equipment have been sold. Approval was also granted after prolonged delays for the sale of technology to construct small mainframe computers as well as a supercomputer for weather forecasting. All of these cases ultimately had to be resolved at the highest levels of the U.S. government and caused some Indian resentment. Secretary of Defense Caspar Weinberger’s visit to India late in 1986, a trip by the commander of the U.S. Pacific Command to New Delhi a few months later and a resumption in 1984 of U.S. naval ship visits to Indian ports after many years of denied access may have eased Pentagon concerns, which nevertheless remain an obstacle for future transfers of high technology.

One reason for the greater American willingness to accommodate Indian enthusiasm for high technology has been a growing interest in and concern about India as a major military and political power in South Asia. American military assistance to Pakistan, however, remains a thorn in the Indo-U.S. relationship, as it has been for the last 30 years. Each new hint of American weapons transfers to Pakistan elicits sharp expressions of resentment and concern from the Indian elite, including the prime minister.

Gandhi was personally reassured of American goodwill in 1985 by vigorous American cooperation in apprehending Sikh terrorists and exchanging information about terrorism. But many senior Indians, including some of the prime minister’s closest advisers, are convinced that Pakistan is behind the Sikh independence movement and various acts of terrorism, including the assassination of Mrs. Gandhi, and that the United States is aware of and thus tacitly condones what Pakistan does. Gandhi’s speeches repeatedly include language suggesting he still shares this view.

Security and defense are intensely political issues for Gandhi; his angry parliamentary retort early in 1987 to critics challenging budget requests for sharply increased defense and national security spending verged on accusations of disloyalty to India. His advisers have told him that the radar aircraft Pakistan is seeking from the United States, along with other new sophisticated military equipment, could counterbalance much of India’s planned defense modernization. Mr. Weinberger’s casual reference, made immediately after he left New Delhi, to U.S. agreement to sell AWACS to Pakistan soured what had earlier been seen as a very successful trip. Gandhi, along with sophisticated Indian defense planners, understands that the United States will continue to supply arms to Pakistan. But certain technologies—AWACS among them—will be treated as litmus tests of whether the United States is really interested in better relations with India or will invariably shrug off Indian concerns in favor of Pakistan’s importance for U.S. global security interests.

In the next two years Washington may have to decide whether to impose heavier political pressures or legislative sanctions on both India and Pakistan or to change U.S. policy to take account of the new subcontinental nuclear realities. This issue is likely to be a new major test for Indo-U.S. relations.

The current U.S. dilemma is whether to challenge Pakistan’s denial that it is developing nuclear weapons, and thereby risk a conflict with Islamabad and jeopardize assistance to the Afghan resistance. The Indians see only one target for a Pakistani nuclear weapons program—India itself. Gandhi continues to deny he has made a decision to authorize the manufacture of nuclear weapons, but every Indian statement on the subject makes clear that India will do so—and swiftly if need be—whenever it finds this necessary to assure its defense.

A nuclear-armed subcontinent may already be a fact. It will be much easier to deal with if overall Indo-Pakistani relations ease, but Gandhi’s views of Pakistan do not appear significantly different from those of his mother, or of most Indians. Despite superficial gestures and periodic high-level bilateral meetings, nothing in the relationship in the last two years suggests that suspicions on either side have eased or that either side is willing to lower its large, growing and ill-affordable defense expenditures.

Washington has little credibility as a mediator between India and any of its neighbors, and there seems little point in trying to play such a role. Gandhi has tried to develop a new style in dealing with India’s neighbors other than Pakistan and China, encouraging discussion, negotiations and accommodation rather than displaying the more imperious and arbitrary manner of his mother. This has eased dealings on all sides even though India’s size and strength as compared with Nepal, Bhutan, Bangladesh and Sri Lanka make changes in the ultimate power relationship virtually impossible.

Sino-Indian relations have not changed much under Mr. Gandhi. Hints on both sides in 1985 that negotiations on border disputes might be accelerated and that trade might increase substantially have led nowhere. New irritants appeared along the border when India accused the Chinese of intrusions into Indian territory in mid-1986. Despite this, Gandhi, for obscure reasons and against the advice of the Foreign Ministry, asked Parliament late in 1986 to designate the northeastern border territory of Arunachal Pradesh (to which China lays formal claim) as a full-fledged Indian state. This has produced a new round of strong Chinese criticisms of Indian policy. The border incidents themselves were not serious, but the revival of charges and countercharges over the disputed area has set back prospects for any easing of the Sino-Indian tensions for some time, and the threat of new frontier incidents has increased.

On the surface, India’s relations with the Soviet Union remain tranquil and smooth. Gandhi agreed to raise the question of Afghanistan with the Soviets after his 1985 trip to the United States, and he apparently did so although to uncertain effect (the Soviets’ declared policy did soften in 1986). The Soviets still send India their newest weapons systems—including the MiG-29—and during General Secretary Mikhail Gorbachev’s visit to New Delhi in November 1986 there were announcements of new Soviet aid for Indian steel, coal and hydroelectric programs, and of agreements on major increases in trade and on high technology and research ventures.

Gandhi, however, was no more willing to endorse Gorbachev’s call for a new conference to discuss Asian and Indian Ocean security and cooperation than Indira Gandhi had been to support Brezhnev’s earlier gambit for an Asian security conference. Gorbachev pointedly urged India, Pakistan and China to resolve issues among themselves through mutual give and take; this evenhanded and noncommittal posture raised eyebrows in India and compelled Gandhi to reassure Parliament after the visit that the Soviets did in fact continue to stand behind Indian security.

Of greatest concern to Indians privately was the sense that Gorbachev was really increasingly interested in Asia as a whole, for all his rhapsodizing about Indian culture (including the works of Nobel Prize-winning author Rabindranath Tagore, Buddhism and the supposed common spiritual cultures of India and Russia). A number of Indians are asking whether this means that India will become only one of many Asian countries on which Soviet attention will now increasingly be lavished. The Soviets appear to be trying to offer reassurances—including organizing their own Festival of India in 1987—but India’s place on the Soviet world map may in fact be diminishing.


Inevitably the record of Rajiv Gandhi’s policy initiatives is mixed. On balance the prime minister has managed relatively well a number of foreign, economic and domestic political issues, including the Punjab crisis, flareups with Pakistan, industrial expansion and relations with the great powers. His strong bias toward attempting to resolve conflicts through reconciliation and compromise rather than confrontation is admirable, as are his efforts—at least partly successful—to speed up and simplify the processes of government.

But Gandhi has done less well in coming to grips with the basic problems that ultimately will determine the future of Indian economic, political and social development:

—He has failed conspicuously to strengthen his own party, to revive the steadily declining respect for politicians throughout India, or to restore the legitimacy of the political party system in ways that reaffirm the vitality of Indian democracy, reinforce social and civic stability and prevent the strengthening of caste, communal and regional party politics.

—He has made no real progress toward stabilizing Indo-Pakistani relations so as to enable both countries to reduce defense expenses and particularly to avert a new escalation of costs in a nuclear arms race on the subcontinent. The situation is probably worse now than it was two years ago, if only because hopes of a new atmosphere in relations with Gandhi have diminished.

—He has done little to persuade most Indians that he has a long-range plan for creating jobs for the seven-to-ten million Indians entering the job market each year while modernizing and rationalizing Indian industry, agriculture and services so as to make them more efficient and productive.

To list these problems is only to emphasize their complexity. Nevertheless, Gandhi has lost much of his initial momentum and will find it more, not less, politically difficult to confront these issues in the next two-and-a-half years.

A particularly worrisome phenomenon is that effective government at the national level continues to depend heavily on the presence of a member of the Nehru/Gandhi family. This sense of "indispensability" led Indira Gandhi to become increasingly assertive and intolerant of opposition in the face of mounting domestic pressure. Rajiv may be tempted in the same way to stifle criticism, and from time to time shows signs of willingness to yield to such temptation.

Rajiv Gandhi nevertheless is a young and vital leader. He possesses the intelligence, energy and proper sense of national priorities that could enable him in time to be a great prime minister. But like any national leader, he needs imaginative and capable advisers and administrators around him, and he needs to learn to work better with individuals of independence and strong character. He has not found many such persons, or—more seriously—has chosen not to use those who may be available. And he must learn to accept, to become more skilled at, and ultimately to enjoy the game of politics. His mastery of these two personal leadership qualities could become the key to his remaining in power and leading India into the 21st century and an era of peace, democracy, stability and increasing prosperity for his countrymen.

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  • Paul H. Kreisberg has been Director of Studies at the Council on Foreign Relations since 1981. A former Foreign Service officer, he has lived in India and traveled there frequently since 1953. He will be a Senior Associate at the Carnegie Endowment for International Peace in 1987-88.
  • More By Paul H. Kreisberg