Former Prime Minister Manmohan Singh
The liberalisation reforms of 1991 paved a new path for India’s economic policies which has catapulted the country into the league of the world’s largest economies, former prime minister Manmohan Singh said.
“Over the last three decades, successive governments have followed this path to catapult our nation to a $3 trillion economy and into the league of the world's largest economies,” Singh said in a statement on July 23, thirty years since the 1991 economic reforms.
As finance minister in the PV Narasimha Rao government, Singh’s Union Budget on July 24, 1991, ushered in the opening up of the Indian economy.
Singh said that in the 30 years since, nearly 300 million fellow Indians had been lifted out of poverty and hundreds of millions of new jobs were provided.
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“The reforms process unleashed the spirit of free enterprise which has helped produce some world-class companies and help India emerge as a global power in many sectors,” he said.
“The economic liberalisation process in 1991 was triggered by an economic crisis that confronted our nation then, but it was not limited to crisis management. The edifice of India's economic reforms was built on the desire to prosper, the belief in our capabilities, and the confidence to relinquish control of the economy by the government,” Singh said.
The 1991 budget was just a part of the liberalisation process. As then commerce secretary Montek Singh Ahluwalia, one of the architects of liberalisation, pointed out in his recent interview with Moneycontrol, the budget speech itself laid out the intellectual arguments and the case for the tough measures which were taken then.
The measures included devaluing the rupee, a new industrial policy which sharply reduced bureaucratic control, raising foreign direct investment limits in a number of sectors, cutting red tape and paving the way for privatisation of state-owned entities.
“I was fortunate to play a role in this reform process along with several of my colleagues in the Congress party. It gives us immense joy to look back with pride at the tremendous economic progress made by our nation in the last three decades,” Singh said.
In his statement, however, Singh did not name former prime minister Narasimha Rao, who is said to have played as important a role in pushing through reforms while dealing with the opposition within the Congress and from other political parties.
Singh said that he was deeply saddened at the devastation caused by the COVID-19 pandemic and the loss of millions of fellow Indians and said that the social sectors of health and education had lagged behind and not kept pace with India’s economic progress. “Too many lives and livelihoods have been lost that should not have been,” he observed.
“It is not a time to rejoice and exult but to introspect and ponder. The road ahead is even more daunting than during the 1991 crisis. Our priorities as a nation need to be recalibrated to foremost ensure a healthy and dignified life for every single Indian,” he said.
As finance minister, Singh had ended the 1991 budget speech with that famous line by French poet Victor Hugo: “No power on earth can stop an idea whose time has come.”
Thirty years later, in his statement, Singh said: “As a nation, we must remember (American poet) Robert Frost's poem, 'But I have promises to keep, And miles to go before I sleep'.”