It was during his tenure that India conducted underground nuclear tests in Pokhran in May 1998, just a month after the government came into power. These tests were regarded a national milestone.The Kargil War between India and Pakistan took place between May and July 1999. By the end of the war, the Indian Army and Air force had recaptured the areas infiltrated by the Pakistani militants. The Kargil victory cemented the reputation of Vajpayee as a strong and able leader of the nation.The BJP led NDA again emerged as the largest political alliance in the 1999 general elections in the wake of the Kargil War victory. Vajpayee was made the Prime Minister for the third time in October 1999.
He introduced many economic and infrastructural reforms like strengthening of private sectors, encouraging private research and development, bringing about privatization of certain government owned corporations, etc. His major projects were National Highway Development Project and Pradhan Mantri Gram Sadak Yojana.U.S. President Bill Clinton paid a state visit to India in March 2000. Clintons visit to India was viewed as very significant in improving the foreign trade and economic relations between the two nations.
Vajpayees privatization campaigns were criticized by trade unions and government employees as excessive privatization was not in their favour.In 2001, he invited the Pakistani President Pervez Musharraf to India with a view to improve Indo Pak relations. However, this attempt could not achieve much success for India.He launched the Sarva Shiksha Abhiyan in 2001, with the aim of universalization of elementary education.
The Parliament House in New Delhi was attacked in December 2001 by Pakistan trained terrorists. Investigations pointed to a conspiracy hatched in Pakistan. For a long time the threat of a full fledged war between the two nations loomed. The Prevention of Terrorism Act, 2002 (POTA) was enacted in the aftermath of the attack. The Vajpayee government implemented several economic reforms during 2002 03 which resulted in a record growth rate of 6 7% in the GDP. The international image of India also improving due to the rapid developments that took place in the country during this perios.Vajpayee resigned as Prime Minister in 2004 after Congress emerged as the single largest party in the general elections.He announced his retirement from active politics in 2005 and didnt contest the 2009 parliamentary elections.