The correct answer is option 'C': 1989.

Following are the details explaining why the era of coalition government began in India in 1989:

1. Introduction to Coalition Government:
- A coalition government is formed when multiple political parties come together to form a government.
- It happens when no single political party secures a clear majority in the Parliament or legislative assembly elections.
- In such cases, different parties join forces and create a coalition to gain a majority and form a stable government.

2. Fragmented Political Landscape:
- India has a diverse and fragmented political landscape with numerous regional parties.
- The dominance of two major parties, the Indian National Congress (INC) and the Bharatiya Janata Party (BJP), started to decline in the late 1980s.
- Regional parties gained prominence as they represented the interests of specific states or regions more effectively.

3. Political Developments in the Late 1980s:
- The late 1980s witnessed several important political developments in India.
- The Bofors scandal, involving alleged corruption in defense deals, severely damaged the reputation of the ruling Congress party.
- The Mandal Commission's recommendations for the reservation of jobs for Other Backward Classes (OBCs) led to widespread protests and demands for social justice.

4. Formation of the National Front Government:
- In the 1989 general elections, no single party secured a clear majority.
- The National Front, a coalition of several regional and left-leaning parties, emerged as the largest alliance.
- Led by Vishwanath Pratap Singh, the National Front formed the government with the support of the BJP from outside.
- This marked the beginning of the era of coalition governments in India.

5. Subsequent Coalition Governments:
- After 1989, coalition governments became a recurring feature of Indian politics.
- The 1990s witnessed the rise of various coalition governments, including the United Front government and the National Democratic Alliance (NDA).
- The United Front government, formed in 1996, saw the participation of several regional parties and lasted for two years.
- The NDA, led by the BJP, came to power in 1998 and continued in various forms until 2004.

6. Significance of Coalition Governments:
- Coalition governments reflect the diversity of India's political landscape and allow for the representation of regional interests.
- They require parties to negotiate and form alliances, leading to a more inclusive decision-making process.
- However, coalition governments can also be prone to instability and disagreements among coalition partners, leading to frequent changes in government.

In conclusion, the era of coalition government began in India in 1989 with the formation of the National Front government. This marked a shift from the dominance of single-party rule to the emergence of coalition governments, which have since become a regular feature of Indian politics.