Prime Minister: Rajiv Gandhi

The Age Of Stars

Partition, planning, aid consortia and nationalised banks.

Vol. CXIIIThe edition of 1987 · The Planned Republic12 records
Prime Minister
Rajiv Gandhi
Presidents
Giani Zail Singh · Ramaswamy Venkataraman
Finance Ministers
Vishwanath Pratap Singh · Rajiv Gandhi · Narayan Datt Tiwari
RBI Governor
R. N. Malhotra

Bank Rate

10%

unchanged on 1986

Rupee per dollar

₹12.95

+2.8% on 1986

Inflation

8.8%

+0.07 pts on 1986

GDP growth

3.97%

−0.81 pts on 1986

Reserves

$11,512m

+9.8% on 1986

External debt

$53,425m

+19% on 1986

Indian politics; defence procurement · 16 April 1987

Bofors scandal breaks (Swedish Radio)

Contract ₹1,437 crore (1986); alleged kickbacks ₹64 crore (see SCAM block for the USD conflicts)

Bofors blacklisted by India in 1987; the scandal dominated 1987-89 politics and contributed to the Congress defeat in November 1989

ReportedPress. Source: https://en.wikipedia.org/wiki/Bofors_scandal

Markets & Money

1 item

South Asian security; Indian defence budget · 29 July 1987

Indo-Sri Lanka Accord signed; IPKF inducted

Peak IPKF strength c.100,000

Force remained until March 1990; counter-insurgency against the LTTE

ReportedPress. Source: https://en.wikipedia.org/wiki/Indian_Peacekeeping_Force

Trade & Tariffs

2 items

Blacklisting of Bofors AB

India blacklisted Bofors after the April 1987 kickback revelations, barring it from Indian business until…

India blacklisted Bofors after the April 1987 kickback revelations, barring it from Indian business until 1999, a restricting measure on a single supplier, not a tariff change

ReportedPress. Source: https://en.wikipedia.org/wiki/Bofors_scandal

Tariff and licensing relief (Rajiv Gandhi liberalisation, 1985-87)

Broad tariff reductions and licensing relaxations begun under Rajiv Gandhi after 1985; the 1985-87 moves are…

Broad tariff reductions and licensing relaxations begun under Rajiv Gandhi after 1985; the 1985-87 moves are the pre-history of 1991 and are the reason the mid-1980s import surge began

ReportedPress. Source: en.wikipedia.org

War & Unrest

3 items

South Asia (Sri Lanka)

Indian Peace Keeping Force (IPKF) in Sri Lanka

Direct military cost (full cost ?); ~1,200 Indian soldiers killed (published figures vary slightly); strained a fiscal position already sliding towards 1991

ReportedOfficial record. Source: Indo-Sri Lanka Accord 1987-07-29; Lok Sabha answers on IPKF casualties

Sri Lanka

Indo-Sri Lanka Accord and deployment of the Indian Peace Keeping Force (July 1987 – March 1990)

Peak strength c.100,000 troops; sustained Indian military expenditure; Indian casualties; also the arms-to-militants channel that preceded it and the 1987-1990 counter-insurgency campaign

ReportedPress. Source: https://en.wikipedia.org/wiki/Indian_Peacekeeping_Force

South Asia, Sri Lanka

Indo-Sri Lankan Accord (July 1987) and induction of the Indian Peace Keeping Force (IPKF)

Defence expenditure on a 100,000-strong force at peak (July 1987 – March 1990); Rajiv Gandhi's political cost after the Accord and the LTTE's opposition; Tamil Nadu political channel

ReportedPress. Source: https://en.wikipedia.org/wiki/Indian_Peace_Keeping_Force

Courts & Scandal

4 items

defence procurement (155 mm FH-77B howitzers)

Bofors howitzer kickbacks scandal

Contract signed 1986-03-24 with Bofors AB (Sweden) for 410 howitzers plus a follow-on of roughly twice that number, described in one Wikipedia summary as a US$1.4 bn deal; a separate line in the same article gives the signed contract as US$285 mn for the 410 guns. Bofors was blacklisted by India in 1987.

ReportedPress. Source: ; https://archive.org/details/cia-readingroom-document-cia-rdp90t00100r000300300001-7 (en.wikipedia.org)

defence procurement

Bofors, alleged kickbacks paid to Indian politicians/officials

₹64 crore

Sources disagree and both rows are recorded. (a) The English Wikipedia summary states Bofors paid ₹640 million (₹64 crore) in kickbacks, and separately renders the same sum as US$6.6 mn, which is not consistent with the 1987 rupee rate (₹64 crore ÷ 12.96 ≈ US$49 mn), so the USD figure in that source appears to use a different base or is an error. (b) A separate line in the same article puts bribes paid to Indian politicians, Congress party figures and bureaucrats at ₹600 million (₹60 crore), rendered as "US$85 mn in 2023 prices". (c) A declassified CIA assessment of 1988-03-04 refers only to "allegedly bribing Indian middlemen and officials in connection with New Delhi's $1.5 billion purchase of 155mm howitzers" and gives no rupee bribe total.

ReportedPress. Source: ; https://archive.org/details/cia-readingroom-document-cia-rdp90t00100r000300300001-7 (en.wikipedia.org)

offshore banking

Bofors, Quattrocchi accounts

₹21 crore

Two London bank accounts of Ottavio Quattrocchi (€3 mn and US$1 mn) were frozen, then released by the UK; the CBI told the Supreme Court on 2006-01-23 that about ₹210 million (₹21 crore), about US$4.6 mn, had already been withdrawn. Recorded here because it is the documented City of London banking link in the Bofors case.

ReportedPress. Source: https://en.wikipedia.org/wiki/Bofors_scandal

The Ledger: what was borrowed in 1987

Full ledger →
CreditorInstrumentAmountUS$ mStatusGrade
"Group of banks" / tender panel (not named)ICICI Euro-commercial paper backed by a note issuance facility; 12 swaps by Sep 1989verified

Rows are listed as recorded. Some describe the same loan from different sources and must not be added together.

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