India's Globalisation Marks Silver Jubilee

The reforms, put in place by the then-finance minister Manmohan Singh in July 1991, had not only helped the country come out of the economic slump faced by the country 25 years ago, but it had also set a new and global framework for the future generation of policymakers.

- Charanjit Ahuja

July is a month to remember and 2016 is an year to celebrate the silver jubilee of economic reforms spearheaded by the then-finance minister, Manmohan Singh, considered the architect of reforms in India from July 1991 when PV Narasimha Rao was the Prime Minister. This was the time when India development model evoked sarcasm across the globe.

This was the year that proved the dictum that ‘coming events cast their shadows before’, wrong. The year 1991 had begun on an ominous note as the year saw political instability in India with Mandal Commission’s report on reservations leading to a crisis situation never witnessed before. Former Prime Minister, Rajiv Gandhi had been assassinated on May 21 and there was a wave of anguish and unrest.

It was under such trying circumstances when Manmohan Singh as the Finance Minister presented his budget on July 24. It was not only the political instability that had shaken the nation but there was a serious foreign exchange reserve crisis as well threatening the fundamentals of Indian economy. The foreign exchange reserves were so low that they could suffice for a maximum of 30 days only. It was this moment when Manmohan Singh delivered his historic speech that changed the destiny of Indian nation and its economic direction. “There is no time to lose,” Singh urged, before going on to announce “essential reforms in economic policy…” Licensing, the bane of businesses, was tamed by the abolition of permits for all but a handful of industries; import-export policy radically altered; and direct foreign investment was freed up.

An idea whose time had come

In his maiden speech as the union finance minister, Singh quoted one of the greatest French writers, Victor Hugo: “No power on earth can stop an idea whose time has come.” And rightly said this was an idea that changed the Indian nation for better.