When the Lord comes as Vamana to Bali’s yagna, Bali is in a privileged position to offer gifts to the Lord, who is the giver of all benefits. However, the noble Bali is blinded by pride and power at the moment when he offers Vamana whatever He desires, thinking that he is the sole possessor of his attainments. The entire sequence of events in this avatar is a lesson to all to cross this illusory sense of possessiveness that deludes one and prevents him from perceiving the truth that He alone is the Lord of all, pointed out Damal Sri Ramakrishnan and Srimati Perundevi in a discourse.
Vamana asks for earth to be measured by three steps of His feet. Bali’s ego rises and he reiterates that he is prepared to give Him much more, in fact anything that He wishes. Sukracharya guessing this guest of honour to be Vishnu, who has come on behalf of the celestial beings to defeat Bali, warns him not to go ahead with the offer. But Bali believes that if it is the Lord who asks of him, none could be more fortunate and offers all his possessions without the least hesitation.
The Bhagavata Purana describes the amazing form that the Lord assumes as He grows higher and higher to cosmic dimensions. His feet rest on Rasatala; the sky is His navel; the stars are high on His chest; Dharma is on His heart flanked on both sides by Rita and Satya. Spanning the entire earth with one foot, and the swarga loka and heavens with the other, the Lord waits for Bali to offer the third step as promised.
The righteous Bali is undeterred and shedding his ego offers his entire self to the Lord who is the sole refuge of all beings. Every jivatma has to strive towards this act of total surrender to the Lord to get liberated.
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