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The crisis would sorely test Rao's besieged Congress party, his government's narrow control of Parliament, and India's international reputation. Rao became Prime Minister in 1992 following the assassination of Rajiv Gandhi. He had instituted free market economic reforms that opened India to more foreign investment as well as legal reforms to enhance respect for human rights.
Congress initially fared very well in state elections. By 1995 privatization had caused job losses. Two Hindu nationalist opposition parties, Bharatiya Janata Party (BJP) and Shiv Sena made anti-Muslim appeals that contributed to Congress defeat in five out of six state elections. Congress Party dissidents demanded the Prime Minister's resignation. A rebel faction elected a rival party leader, and the leadership expelled Rao's chief rival from Congress (I). If the government failed to satisfy Hindu nationalists demanding a firm response to the Punjab assassination, the opposition might easily oust his government in national elections next March.
