Economic Reforms of 1991


It was the Summer of 1991 when Mr. P.V. Narshima Rao took over as Prime Minister of India. As soon as he became the PM, he understood that India is in serious economic crisis.As gulf crisis came and price of oil is skyrocketing India is unable to purchase the oil. Though he do not have any economics Pedagogy but he was an intellectual and knows 9 Asian and European languages. Serving to the various department of the government in his political career, he soon identified the situation. As the crisis needs a great savior who can deal with economic affairs of the country is his first step, he trust no politician efficient enough to do this job.There by he appointed Dr. Manmohan Singh as the Union finance Minister.
The reticent, soft-spoken ex-governor of RBI serving Indian commerce ministry from long time, Manmohan singh easily understood the situation and said to the PM that India is bankrupt now and we have only two weeks of reserve for Imports, the only way to get out of this crisis is to go for bailout package from IMF. Getting bailout package from IMF is not easy job as India as to make certain amendments in their law before entertaining this package and Dr. Manmohan singh very well know about that and his first step to devalue the currency by 20 percent. He then called newly held Commerce Minister P.Chidambaram to abolish subsidy from the export. As devaluing the currency already working as a subsidy for the exporters but if it is withdrawn, it can reduce fiscal deficit by 0.4 percent. For a newly held commerce minister it will be suicide of his political career. He sulked that how he will face the exporters but then agreed to the Finance minister. P.Chidambaram a MBA from Harvard is a quick learner and understand the situation very well by day and night working in the office.
As soon as Finance Minister approached him that are you ready for the changes, he told to Manmohan singh that he also want to change trade policy of India. Manmohan singh said by tommorow and he said yes!. Okay lets meets in the evening with your policies. P.Chidambaram very well knows the flaws of the policy of the trade and he understood that it is the time to abolish License Raaj there by putting end to all the corruption and bureaucracy, which is hindering growth of India. Sitting with the commerce secretary by then, Mr. Montek singh Alhuwalia, Chidambaram put his best efforts to reform the trade policy. Although it takes 40 years to built up the policy of License Raaj but Chidambaram ruled out in just 8 hours.In the Evening they meet with Mr. Manmohan Singh and not to be surprising, he is very pleased and satisfied. Together three of them Dr. Manmohan singh, Mr. P.Chidambaram and Mr. Montek singh headed towards PM’s office. P.V Narshima Rao just came out of his bath and still in his lungi, ask them to show the proposal of the policies. Chidambaram sits next to him and explained everything in detail. Few of things get over his head but at last he look over to the Manmohan singh and asked are you agreed with this. Manmohan Singh nodded with yes. In that case you are agreed to that Sign it and then i am going to sign under it said PM. Finally these four men with firm determination made changes in the trade policies and open India to the world market. An Uncaged tiger that was India they made.

Written by Sandesh Sharma

Sandesh loves writing about movies, books and brands. He is an entrepreneur with interest of cycling, travelling and blogging.

Leave a Reply

Your email address will not be published. Required fields are marked *