Words of Wisdom

"No power on earth can stop something whose time has come"

Dr. Manmohan Singh quoting Victor Hugo

BY DHARMIK MADAN | 1 Min Read

The minister of finance Dr Manmohan Singh whereas introducing the Budget of 1991 can be referred as a trademark to the dynamic fortunes of the Indian economy.At that the time was virtually on the urge of bankruptcy. Manmohan Singh was sworn in as the Minister of Finance to former Prime Minister P.V. Narasimha Rao’s Government, that assumed workplace at the Centre in June, 1991. Throughout this era , the Indian economy was still functioning in step with the Nehruvian-socialist agenda, which, with the External debt pegged at 23  % of Gross Domestic Product and Internal debt amounting to 55 % of the gross domestic product, wasn’t doing  too well for the country. because of its functioning as a quasi-welfare state beside the existence of the license ‘raj’ – the flowery system of licences, laws and related procedure that was needed to determine and run businesses. In India between 1947 and 1990 – Indian employment rates had gone all the way down to a negative. There was least economic process, and therefore the manufacturing sector was in dangerous form. The financial deficit was 8% of the gross domestic product, the account deficit stood at 2.5%, wholesale inflation was rising at an alarming 13 % and retail inflation was even higher at a thumping 17%. The Foreign Exchange Reserves were standing at a paltry Rs 2500 crores, that was nearly 75 % less than what it absolutely was prevailing a year before, in 1990. To place it subtly, the economy was stalling, and there was a desperate want for a brand new set of reforms that would put India back on the path to growth. DR Manmohan Singh introduced a path breaking budget by removing various restrictions and introducing some radical reforms. He allowed the first time legal import of gold by passengers and banks . He liberalised imports and reduced Customs duties drastically against  the opinion  of economists and politicians and led the foundation of Indian economy as we know it today. From that budget of 1991, India never looked back and became an economic marvel it today is.