IV. Prime Minister Rao's Decision and developments through 1997

The Prime Minister's Congress Party not only lost the April 1996 elections, but Rao and several top cabinet officials were subsequently indicted for major corruption. A fragile coalition government of small parties selected H.D. Deve Gowda as Prime Minister, but Congress engineered his defeat within a year. Another minor party leader, I.K. Gujral became Prime Minister in 1997 and promoted more neighborly relations with Pakistan's newly elected leader Nawaz Sharif. India refused a U.S. offer to mediate following six days of border skirmishes with Pakistan in August 1997.

Peace in Punjab and Kashmir remained as elusive as ever, although fresh negotiations began at a 1997 summit meeting with Pakistan. K.P.S. Gill was removed as Police Commissioner, but terrorist bombings continued in the Punjab. The Sikh dominated Akali Dal party defeated Congress in February 1997 elections for the Punjab state legislature.

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