Manmohan Singh: Architect of India's Economic Reforms

New Delhi, Dec 26 (PTI) Manmohan Singh, who is credited with successfully anchoring the sinking ship of the Indian economy by ushering in bold economic reforms under Prime Minister P V Narasimha Rao, died at the age of 92 on Thursday.

When Singh took the reins of the Finance Ministry in 1991, India's fiscal deficit was close to 8.5 per cent of the GDP, the balance of payments deficit was huge and the current account deficit was close to 3.5 per cent of GDP.

To make things worse, foreign reserves were just enough to pay for two weeks of imports indicating that the Indian economy was in deep crisis.

Against this backdrop, the new economic era was brought in through the Union Budget 1991-92 presented by Singh.

It was a turning point in the economic history of independent India which witnessed bold economic reforms, abolition of licence raj and opening of many sectors to private players and foreign players so that capital could flow in.

He is credited with putting India on the new economic policy path which allowed Foreign Direct Investment (FDI), rupee devaluation, moderation in taxes, and privatisation of public sector companies.

His role in ushering in a comprehensive policy of economic reforms is now recognized worldwide.

"I present to you the budget of 1991-92", Singh had said when he stood to present the iconic union budget that took the Indian economy into the direction of liberalisation, globalisation and privatisation.

The budget marked a significant shift towards a markets-focused economy. This paved the way for rapid economic growth in the decades that followed.

"No power on Earth can stop an idea whose time has come," Singh had said, as he concluded his Budget speech.

Under his tenure, the regulations on import and export were relaxed, and significant changes were made to cater to the needs of businesses. The initiatives taken during his tenure resulted in monumental growth of the services sector especially IT and telecom.

On the capital market side, the establishment of the National Stock Exchange (NSE) in 1992 was another highlight of his regime. He continued as the Finance Minister till 1996, when the Rao government was voted out.

Singh got another chance in May 2004 to serve the country, this time as the Prime Minister of India. He replaced Atal Bihari Vajpayee as the 14th Prime Minister of the country.

In the new avatar, Singh carried forward the ideas of economic liberalisation in 1991 as this path was now tried and tested.

In 2007, India achieved its highest GDP growth rate of 9 per cent and became the second fastest-growing major economy in the world.

During his tenure as Prime Minister, the Mahatma Gandhi National Employment Guarantee Act (MGNREGA) was enacted in 2005 to deal with rural distress and perk up income. Indirect tax reforms were introduced by ushering in the value added tax, replacing sales tax.

Besides, a Rs 76,000 crore farm debt waiver and debt relief scheme was implemented across the country which benefited crores of farmers.

He also steered the nation during the 2008 global financial meltdown and announced a huge stimulus package to deal with the situation.

Aadhaar was introduced through the Unique Identification Authority of India during his tenure as prime minister for targetted subsidy transfer. Direct Benefit Transfers for many schemes were announced under his leadership.

He also promoted financial inclusion in a big way and many bank branches were opened during his tenure as the Prime Minister. Other reforms like the Right to Food and the Right of Children to Free and Compulsory Education Act were enacted during his regime.