by a severe crackdown on firms suspected of tax evasion). There was
a prolonged boom on the stock exchange.
5. Rajiv Gandhi had made clear from the first that he would treat
the Punjab problem as his first priority. From March onwards he made a number of concessions to Sikh opinion, and did not allow
himself to be deterred from this course by outrages such as the wave
of Sikh bombings in May, or by the Air India crash in June. On 26 July he signed an accord on the problems of Punjab with the moderate Sikh leader, Sant Harchand Singh Longowal. Longowal was
assassinated by Sikh extremists on 20 August, but this had the effect of rallying moderate opinion behind the settlement. In the Punjab elections on 25 September, the Akali Dal Party won a decisive victory under the leadership of Longowal's successor, S S Barnala. Although Congress (I) was defeated, Sikh moderates now had the incentive to carry out the terms of the accord and Mr Gandhi
praised the result as a victory for democracy.
6. After the success of his Punjab policy, Mr Gandhi also reached a settlement of the long-standing student agitation in Assam (over immigration from Bangladesh) in August 1985. The results were less happy. Congress (I) lost to the student agitators in the subsequent state elections by a large majority. Again, the Assam settlement
left a number of loose ends to be tied up.
to be
7. One of the key provisions of the Punjab settlement was that Chandigarh, the shared capital of Haryana and Punjab, was transferred to Punjab in return for a Hindi speaking area. The Mathew Committee was charged with identifying the area to be transferred from Punjab to Haryana but reported in January that it was unable to do so; and that, consequently, Chandigarh should not
be transferred either. This was a severe blow to the State
Government of Barnala, already under increased pressure from extremists. It coincided with re-entry into the Golden Temple in Amritsar of militants, who dismissed the committee which oversees all Sikh temples, and began to demolish the sacred Akal Takht, on the grounds that its restoration by the Indian Government had been sacrilegious. A Sarbat Khalsa (or general synod) on 16 February
called upon the militants to leave the temple.
/8.