When Rajiv Gandhi and Mikhail Gorbachev set up a joint Indo-Soviet group to reform their economies
In 1985, we were well into the domestic reform process. Compulsory governmental approval of all kinds of investment and output activity was being abolished. Controls were being replaced by taxation and tariffs. The removal of negative protection — the efficient domestic producer suffering because his “protected inputs” leading to cost disadvantages made him uncompetitive in financial terms with his competitor abroad — was releasing the energies of efficient Indian firms. The Bureau of Industrial Costs & Prices (BICP) under me produced DRC industry level estimates separately of such producers. Firms which were marginally uncompetitive were given notice to shape up in three years time. Despite moving from controls to a reform process, industrial growth rates were high.
The prime minister, Rajiv Gandhi, went to Moscow. It was a friendly environment. Mikhail Gorbachev was attempting Perestroika (economic reform) in addition to Glasnost (political liberalisation). Rajiv, at the spur of the moment, said: “Mr First Secretary, you are pushing reform and so are we. Why don’t we cooperate in this process.” Gorbachev jumped at the idea and a joint Indo-Soviet group was set up with me as its Indian chair and a member of the GOSPLAN (the state planning committee), an electronic engineer trained in the US, as the Soviet Chair.
I was told by the PMO to get cracking. I was aghast. We were well into reform. The last thing we wanted was bilateral exchange based trade. They told me I have no options. Clenching my teeth, working on second best options, I wrote to all the ministries. Check your list of projects not sanctioned but is of priority to you, and where you think the Soviets are doing well. If you are still interested, send the detailed proposal to me. I got back a list which, three to four decades later, is still relevant. The newer variant of the VVER reactor for producing nuclear power (the older version had failed in Chernobyl), rock blasting to get irrigation channels through mountains (from the Hirakud dam to the prosperous coastal plains in Orissa), mining deep water underground water reserves (like the Luni deposit in Rajasthan, which is a river trapped 700 meters below) and similar projects.
Moscow, here I come. Satyen Pitroda, who was a neighbour of my wife Raksha in Vadodara, was chairman, C DOT. He had given his name as Sam Pitroda. I asked him if he would like to join. Even though we both held the rank of minister of state in the government, I was the Indian Chair of this group. He readily agreed.
On the Air India flight to Moscow, he bought a lot of gifts. I told him he is breaking the exchange laws of India. In any case, we are carrying gifts.
He said, “Yogi, you know I have dollars.”
I told him: “Satu, you can use your dollars only if you repatriate them.”
He ignored my advice. After the government changed, he was persecuted by central agencies for using his own money for a national cause. He had to undergo a cardiac operation.
In Moscow, Kaul saheb (T N Kaul) was the ambassador. My discussions went on famously. In the return banquet, Kaul saheb agreed that we should invite all the men I had met. These were technocrats, the man who was completing the Siberian Railway, the man who led the teams to modernise steel and machinery industries and so on.
The small lane in Moscow that housed Ashoka Restaurant was full of cars with red lights and sirens. The dinner was a great success. But in the years to come, I met these men in Delhi and Moscow. I could see them wilting under the pressure. The Gorbachev regime had not worked out the details. Anyway, my Soviet counterpart took us to Kiev and Leningrad. In Leningrad, now back in its historical glory, we heard the story of the Soviets dismantling the palace of the Czars, stone by stone, as the Nazis advanced, taking it to Russia and rebuilding it after the War.
History repeats itself, but the second time as a farce, as Marx wrote in The Eighteenth Brumaire of Louis Bonaparte.