India 7: Coalitions and Growth

Shortly after the 1991 assassination of India's former Prime Minister Rajiv Gandhi, which I discussed here, Gandhi's Congress Party finished first in a general election. It was not a landslide, as had been the case with the 1984 general election in the wake of the assassination of Gandhi's mother, Indira. But the 1991 victory was sufficient to allow Congress to head a coalition government.

Congress had routinely maintained an overall majority in the Lok Sabha (lower house of parliament) in the early years of Indian independence. But no general election since 1984 has produced an overall majority for any party, so coalition governments have become the norm.

P.V. Narasimha Rao was prime minister in the Congress-led coalition government that took office in 1991. That was a rare time when no member of Jawaharlal Nehru's family was available to head the Congress Party. However, Nehru's Italian-born granddaughter-in-law, Sonia Gandhi, widow of Rajiv Gandhi, eventually became party leader.

In an earlier post, I mentioned India's persistent economic problems. By 1991, it had still not opened itself up to globalization. During that year, the country found itself bankrupt, so it had no choice but to change its economic policies.

Rao and his Finance Minister Manmohan Singh (now the prime minister), implemented deregulation, privatization and more free trade. Since then, India's economy has grown at a greatly accelerated pace.

India is now often compared with China, which began implementing similar reforms under the leadership of Deng Xiaoping, a few years earlier. With their huge populations, those two countries have the potential, if they can continue to increase per capita Gross Domestic Product, to bypass the United States and become the largest economies in the world within a few years.

Another development in India in the 1990s was the appearance of a semblance of a two-party system in the country for the first time. Congress's counterpart in that system is the Bharatiya Janata Party (BJP).

Many parliamentary seats are still scattered among myriad small parties, but the elections since 1996 have resulted in either Congress or the BJP emerging as head of a coalition government.

The BJP is aligned with India's Hindu majority. It is an enthusiastic proponent of the capitalist economic policies which the Congress Party had adopted only under pressure.

The BJP won the highest number of seats in the 1996 general election, but was unable to assemble a viable coalition. For a brief interim, H.D. Deve Gowda of the small Janata Dal Party served as prime minister. In 1997, Congress withdrew its support of Gowda's coalition, and he was succeeded by I.K. Gujral. Gujral's time in power was also brief, and another general election was called in 1998.

Next: India gets closer to a two-party system.