In July 1991, the then Finance Minister Manmohan Singh presented a landmark budget, which is credited for modern India's economic progress. India had been growing at a minimal rate per year before the historical 1991 budget. With economic reforms kicking in, India was gradually pushed to the path of economic development and progesss. Presenting the budget, Manmohan Singh explicitly mentioned the crisis India was facing, as he said, "the new Government, which assumed office barely a month ago, inherited an economy in deep crisis. The balance of payments situation is precarious."
He went on to add that the people of India could see double-digit inflation that potentially hurts the poorer sections of the society the most. In his Budget speech, Singh said that the foreign exchange reserves at that time, which was only Rs 2,500 crore could suffice to finance imports for a mere fortnight. It is said that the real liberalisation of the Indian economy came through the historic changes made in the industrial and export-import policy announced in the Budget.
It is reported that within a few days of his appointment as the finance minister, Manmohan Singh called a meeting of all secretaries as well as the chief economic advisor. In the meeting, Singh outlined the entire economic reform programme that had to be followed. He told everyone that he had full backing of the then Prime Minister Narasimha Rao.
The major reforms undertaken in 1991 include-
- Fiscal Reforms: Under finance minister Manmohan Singh, India focussed on restoring the fiscal discipline. The fiscal deficit at that time was as high as 8.4 per cent of the GDP. The 1991 budget envisaged to reduce the fiscal deficit by nearly two percentage points.
- Reforms in Industrial Policy: In order to give a major stimulus to the domestic industry, the then government headed by PM Rao announced New Industrial Policy. It sought to deregulate industry to promote growth, making industry more efficient and competent.
- Foreign investment promotion: The government announced high technology and high-investment policy industries. it entailed offering automatic permission for foreign direct investment (FDI) up to 51 percent foreign equity.
On Thursday, former Prime Minister Manmohan Singh breathed his last at AIIMS Delhi at the age of 92. This came hours after he was admitted to the emergency department of the hospital. The veteran leader, who had faced health issues in the past, was taken to the hospital for urgent medical attention. The news of his demise was first confirmed by Robert Vadra who posted it on social media. Later, a medical bulletin was also released by AIIMS, confirming Singh's death.
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