Friday 27 / December / 2024
New Delhi: India's economic growth post-liberalisation cannot be hailed without recognizing the significant contribution of former Prime Minister Dr. Manmohan Singh. His journey began long before he assumed charge as the 13th Prime Minister of the country.
When India was facing a balance of payments crisis, Singh, along with then Prime Minister P.V. Narasimha Rao, steered the economy onto the path of development through liberalization and served as the Finance Minister in Rao's government.
As Finance Minister under Prime Minister Rao from 1991 to 1996, Singh played a pivotal role in liberalizing India's economy. He reduced the License Raj and streamlined regulations, significantly reducing government interference in industries.
He also introduced trade reforms, cutting import tariffs and moving towards an open-market economy. The major reforms in Foreign Direct Investment (FDI), which India continues to benefit from, were initiated under his leadership, allowing FDI in key sectors.
The devaluation of the rupee, which Singh oversaw, helped make Indian exports more competitive, boosting export potential. He also introduced tax reforms that simplified the tax structure and widened the tax base. These efforts led India through a period of economic growth and policy transformation during his tenure.
Presenting the first budget as Finance Minister on July 24, 1991, Singh said in Parliament, "I am confident that, after a successful implementation of stabilisation measures and the essential structural and policy reforms, our economy would return to a path of high sustained growth with reasonable price stability and greater social equity."
When he assumed charge as Prime Minister, the country experienced sustained economic growth. India achieved an average growth rate of 7 per cent during his first term. According to IMF data, India's GDP from 2004 to 2014 averaged a growth rate of around 6.7 per cent.
During the 2008 global financial crisis, Singh successfully steered the Indian economy with minimal damage.
The crisis, triggered by cheap credit and lax lending standards that led to a housing price bubble, left financial institutions holding trillions of dollars in worthless mortgages when the bubble burst.
Under Singh's leadership as Prime Minister, the government took aggressive countercyclical measures. The Reserve Bank of India sharply relaxed monetary policy, and the government introduced fiscal stimulus to boost domestic demand.
Singh is also hailed as a socialist for his reforms like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which aimed to provide employment and reduce rural poverty. This scheme guaranteed work to a person from rural households for 100 days, it significantly improved the livelihoods.
The success of today's Direct Benefit Transfer (DBT) system and reduced leakages in welfare schemes can be traced back to Singh's initiative to launch the Aadhaar project. This project later became a cornerstone for financial inclusion and welfare distribution.
He also played a critical role in negotiating the India-US Civil Nuclear Agreement, opening up nuclear energy for civilian purposes. On August 1, 2008, the IAEA Board of Governors approved India's safeguards agreement, paving the way for India's entry into the Nuclear Suppliers Group.
Speaking about nuclear energy, Singh remarked, "The civil nuclear initiative is good for India and good for the world. As we move forward towards our goal of sustainable development and energy security, the peaceful uses of atomic energy will play an increasingly important role."
Dr. Manmohan Singh's tenure as both Finance Minister and Prime Minister marked a transformative era in India's economic landscape. His visionary policies laid the foundation for modern India's economic rise.
