Bal Thackeray was founder and long-time leader of the Shiv Sena, a far right political organisation in alliance with the BJP, known for orchestrating communal violence, and moral and cultural policing. According to the Srikrishna report [pdf] on the 1992-3 Bombay riots, the Shiv Sena took the lead in organising attacks on Muslims under Thackeray's guidance. His strategy of creating communal polarisation through violence helped bring the Shiv Sena-BJP alliance to power in Maharashtra in 1995.
Thackeray was well known for his hate speech against Muslims and others, saying for example, "They [Muslims] are spreading like a cancer and should be operated on like a cancer." He admired Hitler, and believed that "What India really needs is a dictator who will rule benevolently, but with an iron hand". Narendra Modi is a self-proclaimed admirer of Bal Thackeray (see also here).
Bal Thackeray died of natural causes in November 2012 at the age of 86. Two girls were arrested for a Facebook post critical of the shutdown of Mumbai for Thackeray's funeral.
References: Articles on the Shiv Sena on Communalism Watch.