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The WonderDECADESThirty years that changed India

It was in July 1991 that India, left with little time or options, made a tryst with pivotal reforms. The Indian economy, which goose stepped along fundamentally unchanged until then, would never be the same again. Here is a special throwback to that epoch.

manmohanpv_narsimha
No power on earth can stop an idea whose time has come…Let the whole world hear it loud and clear. India is now wide awake. Manmohan Singh

TheProtagonists

  • protg pic
    Narasimha Rao
    Then prime minister of India

    Credited with creating an appropriate political environment to help tackle the economic crisis. Rao empowered and backed his finance minister, bureaucrats and economists in the government who kick-started the liberalisation and privatisation of the Indian economy

  • protg pic
    Manmohan Singh
    Then finance minister of India

    Was entrusted with the responsibility of carrying out structural reforms that liberalised India’s economy. Singh, an apolitical appointee in the Cabinet and the ‘architect’ of the liberalisation process, had to dodge intense political opposition. He later went on to become the PM

  • protg pic
    Rakesh Mohan
    Co-authored the 1991 industrial reforms

    The chief economic adviser to the ministry of industry during 1988-96, authored the industrial reforms of 1991 along with then PM’s principal secretary. He is said to have had an impact on the industrial, trade and foreign investment policy

  • protg pic
    Montek Singh Ahluwalia
    then Commerce Secretary

    A key member of the reforms team, he has been credited for authoring the “M document” during his stint in the Prime Minister’s Office under VP Singh. Many final reform measures are said to be based on this document

  • protg pic
    Amar Nath Verma
    Then principal secretary to the PM

    He prepared the first draft of what became the New Industry Policy, along with the CEA. He played a key role in implementing the reforms and helped integrate India’s economy with the world. Manmohan Singh called him the “power centre in reforms”

  • protg pic
    Chandra Shekhar Singh
    PM preceding PV Narasimha Rao

    Chandra Shekhar Singh and his government have been credited for taking multiple steps towards economic liberalisation during their short tenure. These measures are seen as the foundation of the 1991 reforms

  • protg pic
    Naresh Chandra
    Then cabinet secretary

    He also served in Chandra Shekhar Singh’s government. Fought economic fires as the administration changed. He prepared a note of proposed reforms for incoming PM PV Narasimha Rao. The blueprint to avert default and liberalise the economy eventually formed part of the new policy

  • protg pic
    PJ Kurien
    Then minister of state for industry

    Tabled the historic statement on Industrial Policy in the Lok Sabha. This set the ball rolling for the finance minister to present the Union Budget later in the day

  • protg pic
    P Chidambaram
    Then minister of state (independent charge) for commerce

    Seen by many, including Manmohan Singh as ‘one of the strongest advocates’ of economic reforms in the Cabinet as well as in the country’s political sphere. He is credited with initiating the trade policy reform

  • protg pic
    S Venkitaramanan
    Then Governor of the Reserve Bank of India

    Credited for taking decisive actions and handling of the balance of payments crisis in the late 1980s and early 1990s

Reforms & They

Reforms & They

tset

Thirty years of liberalisation: Reforms lifted GDP growth but didn’t create enough jobs

tset

Diaries of a rookie reporter on liberalisation: Nearly every day was historic in the 1990s

speakerIndustrial policy & trade reforms, supported by exchange rate, were game-changing.
Montek Singh AhluwaliaEconomist | Former Deputy Chairman, Planning Commission
speakerInfosys was liberated post reforms to find its rightful place in the market.
NR Narayana MurthyFounder, Infosys
speakerSadly, the initial momentum petered out. Reforms became half-hearted.
RC BhargavaChairman, Maruti Suzuki
speakerReforms unleashed corporate & entrepreneurial energy into the system.
Harsh MariwalaFounder & Chairman, Marico
speakerLiberalisation was an epochal step impacting industrial and financial sectors.
KV KamathFounder President, New Development Bank
speakerReforms unshackled the Indian industry from the ‘License Raj’ & benefitted every sector.
Kiran Mazumdar ShawExecutive Chairperson, Biocon
speakerThe reforms have helped millions climb the income ladder.
Keki MistryVice-Chairman & CEO, HDFC Ltd
speakerEconomic growth and human development haven’t always gone hand in hand.
Chandra Shekhar GhoshMD, Bandhan Bank
speakerBottom 10% of the population still do not have a dignified life.
Madan SabnavisSenior Economist
speakerA sneak peek into the Press Trust of India terminal for stock prices was a privilege.
A BalasubramanianMD & CEO, Aditya Birla Sun Life Mutual Fund
speakerReforms were a bold strategic blueprint that propelled India ahead into the future.
Harsh GoenkaChairman, RPG Enterprises
speakerReforms facilitated long term GDP growth, productivity increases & development of a deep private savings pool.
Sanjay NayyarChairman, KKR India
speakerThe nation suddenly had access to the best the world had to offer.
Haigreve KhaitanSenior Partner, Khaitan & Co
speakerReforms removed the shackles which held back our predecessors and offered a generation the ability to aspire for more.
Rajiv MemaniChairman-India Region, EY
speakerThe 1991 reforms allowed FDI after a huge hiatus. This was really the reason for the growth and expansion of AZB.
Zia ModyCo-founder & Managing Partner, AZB & Partners

Reforms & You

At a time when many expected India to shut its doors to conserve its reserves, it bravely did the opposite. India might have been staring at the end of the proverbial barrel then, but the iconic reforms have put the gun in India’s hands now. The 1991 reforms turned out to be the turnaround scrip that changed the grammar of the country for ever.

Rush ofBrands

  • Before 1991
    alt
    Hindustan Ambassador
    After 1991
    alt
    Hyundai Motor India (May 1996)
  • Before 1991
    alt
    Premier Padmini
    After 1991
    alt
    Toyota (October 1997)
  • Before 1991
    alt
    Maruti Suzuki
    After 1991
    alt
    Škoda Auto India (2001)
  • Before 1991
    alt
    Parley (Gold Spot/Citra)
    After 1991
    alt
    Coca Cola (Oct 1993 re-entered)
  • Before 1991
    alt
    Irani Cafes/Udupi Restaurants
    After 1991
    alt
    Mc Donalds(1996)/KFC (1995)
  • Before 1991
    alt
    BPL/Onida Electronics
    After 1991
    alt
    Sony India (1994)/Samsung India Electronics (1995)
  • Before 1991
    alt
    VSNL/MTNL (Landline - Telephone)
    After 1991
    alt
    Nokia Mobile (1995)
  • Before 1991
    alt
    All India Radio
    After 1991
    alt
    Times FM (Radio Mirchi 1993)
  • Before 1991
    alt
    Doordarshan
    After 1991
    alt
    Star Plus(1991)
  • Before 1991
    alt
    Air India/Indian Airlines
    After 1991
    alt
    Spice Jet(2004)
  • Before 1991
    alt
    SBI/Central Bank of India/Union Bank of India
    After 1991
    alt
    ICICI Bank (June 1994)

TheStories

TheVideos

TheSectors
Then*as per earliest data available.
Now*Data as of 2020.

Then*as per earliest data available.
Now*Data as of 2020.
  • Total revenue (US$ m)

    150

    194000
  • Share of GDP

    0.4%

    8%
  • Total exports (US$ m)

    131

    150000

After the reforms in 1991, India’s software industry turned into a superstar.

Business models continue to evolve and policy changes like relaxation of Other Service Provider license, the Survey said will catapult the sector to the next level of growth and innovation.

  • Deposits (₹ Lakh Cr)

    2.32

    151.13
  • Branches

    60,220

    1,58,373
  • Oustanding bank credit (₹ Lakh Cr)

    1.44

    109.51
  • Min loan rate

    16%

    6.65% - 7.3%
  • Credit-deposit ratio

    60.8%

    72.46%

The years soon after liberalisation saw the licensing of new private banks, one of which -- HDFC Bank -- is now the second largest in the country by assets.

A larger number of people have been covered by bank credit with the rise of unsecured personal loans and other products unknown in the early nineties.

  • Nominal GDP (₹ Lakh Cr)

    6.74

    197.4
  • Nominal per capita GDP (at current market prices in dollars)

    303

    1901
  • FDI ($ Billion)

    0.07

    81.72
  • Foreign Exchange Reserve ($ Billion)

    5.8

    610

Liberalisation has led to a massive economic boom in the past 30 years. Nominal per capita GDP in $ terms has jumped by more than 500 percent as more and more Indians had been pulled out of poverty.

Foreign Direct Investment jumped from a mere $70 million in 1991 to $81.7 billion in 2020-21, the highest ever FDI inflow in a year.

  • Manufacturers/brands with national presence

    20

    70
  • Total Sales ($ Millions)

    1.87

    18.61

The 1990s saw the entry of most of the world’s automakers – General Motors, Hyundai, Daewoo, Ford, Harley-Davidson, Kawasaki – kickstarting the formation of a manufacturing enabling ecosystem.

2008 was a monumental year when the government launched the sub 4-meter rule with attractive tax rates. Such vehicles still control 50 percent of the market.

  • Exports ($ Billions)

    17.9

    291.2
  • Imports ($ Billions)

    19.5

    393.6
  • Total Trade ($ Billions)

    37.4

    684.8
Top trading partners($ Billions)
  • US

    4.8
  • Japan

    3
  • Germany

    2.8
  • China

    86.4
  • US

    80.5
  • UAE

    43.3
Top Exports($ Billions)
  • Non-industrial diamonds

    2.3
  • Non agglomerated iron-ores & concentrates

    0.54
  • Processed petroleum

    0.41
  • Processed petroleum & other light oils

    25.31
  • Pharmaceuticals

    19.4
  • Industrial machinery

    18.9
Top Imports($ Billions)
  • Crude Oil

    3.1
  • Processed petroleum

    2.1
  • Unsorted diamonds

    1.9
  • Petroleum & other Bituminous oils

    59.4
  • Industrial machinery

    37
  • Gold

    34.6
  • Production of Steel (MT)

    14.33

    91.44
  • Consumption (MT)

    14.84

    88.54
  • Import (MT)

    0.97

    4.46
  • Export (MT)

    0.37

    10.15

Crude steel production has grown by 7%on a CAGR basis from 1991-2020. India has set a target of 300 million tonnes capacity by 2030.

On the back of higher capacity utilisation and growing demand for steel products, many players are putting up expansion.

  • Number of telephone subscribers (MM)

    5.07

    1,173.8
  • Teledensity

    0.6%

    84.9%
  • Call rates (₹)

    > Rs 16

    0.01

Technological advancement and heightened competition led to dramatic reduction in calling, data rates and higher penetration of mobile phones

Wider internet penetration helping in achieving National e-Governance (NeGP) objectives opening the doors for e-commerce and extensive spread of social media

  • Share of agriculture in Gross Value

    34%

    16%
  • Share of crops

    65%

    55.9%
  • Share of livestock

    18.5%

    29.3%

The share of the agriculture sector in the gross value added (GVA) halved over the last 30 years as services grew faster.

Freed exports of farm produce such as rice, wheat and sugar, and allowed easier import of oilseeds, edible oil and pulses.

ThePodcasts

HeadlinesThat Day

newspaper
newspaper
newspaper
newspaper
newspaper
newspaper
newspaper

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

A look at the headlines on some of the papers, preceding and following, the historic budget on July 24, 1991.

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