The correct answer is option 2, P.V. Narasimha Rao. He was the Prime Minister of India from 1991 to 1996 and played a crucial role in improving India-China relations. One of the significant steps taken by him was signing the “Line of Actual Control”, which helped in reducing tensions between the two countries. This agreement aimed to establish peace and stability along the disputed territory between India and China.
Option 1, Lai Bahadur Shastri, was the Prime Minister of India from 1964 to 1966. While he made efforts to maintain a peaceful relationship with China, he did not sign the "Line of Actual Control" as mentioned in the question.
Options 3 and 4, Chandrasekhar and V.P. Singh, were also Prime Ministers of India, but they did not have a significant impact on India-China relations or sign the "Line of Actual Control".
Therefore, the correct answer is option 2, P.V. Narasimha Rao.