Recalling Manmohan Singh's iconic Budget speech that changed Indian economy

Manmohan Singh addressing a press conference a day after presenting the Budget in 1991 (Archive | Reuters)

Former Prime Minister Manmohan Singh, described as the architect of Indian economic reforms, died in Delhi on December 26. The Congress veteran was admitted to the emergency ward of AIIMS in a critical condition around 8.30 PM.

Releasing the official statement, AIIMS said Singh was treated for age-related medical conditions and had sudden loss of consciousness at home. "With profound grief, we inform the demise of the former Prime Minister of India, Dr Manmohan Singh, aged 92. He was being treated for age-related medical conditions and had a sudden loss of consciousness at home on 26 December 2024. Resuscitative measures were started immediately at home. He was brought to the Medical Emergency at AIIMS, New Delhi at 8:06 PM. Despite all efforts, he could not be revived and was declared dead at 9:51 PM," the statement read.

Singh, who was Prime Minister for two terms in the Congress-led UPA government from 2004 to 2014, had retired from Rajya Sabha in April 2024. Before becoming the PM, he served as Finance Minister in the government of Prime Minister PV Narasimha Rao from 1991 to 1996, implementing reforms that helped stabilise India's economy.

As the then Finance Minister, Singh on July 24, 1991 read out - over a duration of 1 hour and 35 minutes - a speech that opened up India's economy to the world. With a fragile Indian economy facing a severe balance of payments crisis, the 1991 Budget introduced sweeping economic reforms that liberalised the country and measures to boost domestic growth.

In his speech, Manmohan Singh reminded the House that India was left with just 15 days worth of forex reserves in its kitty.

"The current level of foreign exchange reserves, in the range of Rs.2500 crores, would suffice to finance imports for a mere fortnight," he said.

Without mincing his words, Manmohan said that there is no time to lose. "Neither the Government nor the economy can live beyond its means year after year."

He then announced measures to "liberalise the policy regime for direct foreign investment" into India.

The former finance minister, who went on to become the Prime Minister from 2004 to 2014, also announced a radical policy that would end the crippling license raj system in the country.

"It is essential to increase the degree of competition between firms in the domestic market so that there are adequate incentives for raising productivity, improving efficiency and reducing costs. In the pursuit of this objective, we have announced important changes in industrial policy which will bring about a significant measure of deregulation in the domestic sector, consistent with our social objectives and the binding constraints on the balance of payments," Manmohan told Parliament.

The then Congress government also took the historic step of opening up Indian economy to the world - facilitating a two-way access to global markets and technologies.

"The time has come to expose Indian industry to competition from abroad in a phased manner. As a first step in this direction, the Government has introduced changes in importexport policy, aimed at a reduction of import licensing, vigorous export promotion and optimal import compression. The exchange rate adjustments on 1st and 3rd July 1991 and the enlargement and liberalisation of the replenishment licence system constitute the two major initial steps in the direction of trade policy reform," he said.

While concluding his historic speech, Manmohan quoted famous novelist Victor Hugo, saying "No power on earth can stop an idea whose time has come”.

He ended the speech by borrowing the iconic line from renowned poet Girija Kumar Mathur's composition "Hum Honge Kaamyab".

"I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said, 'No power on earth can stop an idea whose time has come'. I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea. Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome".