With the passing of Manmohan Singh, India mourns the loss of one of its most transformative leaders. As the architect of India’s 1991 economic reforms, Mr Singh’s vision and policies reshaped the Indian economy, moving it from a closed, license-driven economy to one that embraced globalisation and market-driven growth. His initiatives, including liberalisation, privatisation, and tax reforms, not only stabilised India’s financial situation but also laid the foundation for its emergence as a major global economic player.
Manmohan Singh served as Finance Minister under P. V. Narasimha Rao in 1991, where he spearheaded transformative economic reforms. These reforms introduced the Liberalisation, Privatisation, and Globalisation (LPG) model, which played a pivotal role in reshaping India’s economy and opening it up to the global market.
Manmohan Singh’s economic reforms in the 1990s were pivotal in reshaping India’s economic landscape. As Finance Minister, Singh initiated a series of bold policy changes in 1991 to address a financial crisis that saw India on the brink of default. His reforms focused on liberalising the economy, reducing government control, and opening up markets to international competition.
Singh’s key reforms included the devaluation of the rupee, which helped boost exports, and the reduction of import tariffs, promoting trade liberalisation. The government also dismantled the Licence Raj, a complex system of permits and controls that restricted business activities. This liberalisation facilitated an increase in foreign investment, both from abroad and Indian corporations, which were previously constrained by regulatory barriers.
Another significant reform was the introduction of the Goods and Services Tax (GST) system, which streamlined India’s taxation structure, reducing corruption and simplifying business operations. In his budget speech, then-Finance Minister P. Chidambaram introduced the concept of Goods and Services Tax (GST), setting April 1, 2010, as the target date for its implementation.
Singh’s economic policies also included the privatisation of state-owned enterprises, fostering competition and increasing efficiency within the corporate sector.
The opening up of the economy led to rapid economic growth, with India’s GDP growth rate rising significantly in the years following the reforms. Foreign investment poured in, and the Indian stock market flourished. Singh’s policies also played a crucial role in transforming India from a largely protectionist economy to one that embraced globalisation.
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