The Political Economy of Agricultural Policy Reform in India

112 CHAPTER 9

called for some liberalization and deregulation (see “1977–91: Emergence and Establishment of Electricity Subsidies and Flat-Rate Tariffs”), Rama Rao launched a major attack on the reform policies of the Congress Party at both the national and the state level. In the election campaigns for the 1994 elec- tions, he promised to restore the Rs 2 per kilo of rice scheme and to prohibit the sale of liquor (a measure especially appealing to women, who had agi- tated for this measure for years). Electricity subsidies to farmers were also an important element in Rama Rao’s election campaign.2 Prime Minister P. V. Narasimha Rao played a major role in the Congress Party’s election campaign in his home state. Contrasting “development” with “populist welfare,” he argued that Rama Rao’s proposals would hinder development (Suri 2004). Eventually, however, Rama Rao’s campaign prevailed, and he won the 1994 elections. Once elected, he immediately introduced some of the liber- alization policies he had attacked during the election campaign. This strategy is quite in line with Lal’s (2006) observation quoted above: that politicians use “populist” slogans before elections but become reform politicians after the elections. In the power sector, Rama Rao’s government promoted IPPs, which were characteristic of the first phase of power-sector reforms.

TDP Rule under Chandrababu Naidu, 1995–99

The liberalization reforms of the TDP gained momentum when Rama Rao’s younger son-in-law, Chandrababu Naidu, replaced him in office in 1995, in what has been described as a palace coup. While the leaders of this coup justified their action by pointing to the massive influence that Rama Rao had permitted his wife to exert in public affairs, the event remains a paradox in the politics of Andhra Pradesh, considering the massive electoral victory that Rama Rao had achieved just a year before (Suri 2004).3 Though TDP had won the 1994 elections on an antiliberalization ticket, Chandrababu Naidu emerged as one of India’s most outspoken and interna- tionally acclaimed champions of liberalization and good-governance reforms.

2 Rama Rao’s electoral promises were associated with a strongly populist rhetoric. He frequently used formulations such as “Society is my temple and people are my god” and “I am waging a war for the welfare of the common man.” Such statements fitted well with his image as a movie idol, especially as he often played the divine roles of Rama and Krishna. As Suri (2004) com- ments: “In 1989, he declared himself ‘rajarshi’ [philosopher-king] and began to wear the robes of a sanyasi, a Hindu religious mendicant. Really, there was some kind of divine madness in his

thinking and political practice.” 3 In contrast to the situation in 1984, when the central government removed Rama Rao from office, there was no widespread popular protest against his removal from power in 1995, in spite of his own efforts to organize it. Suri (2004) speculates that protest was minimal because the event was seen as a family affair, because of the rise of an elite that increasingly consid- ered Rama Rao’s populist welfare schemes to be unproductive, and because many party leaders were dissatisfied with his autocratic leadership style.

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