India’s first Sikh Prime Minister and the architect of the Indian economy Dr Manmohan Singh passed away on Thursday at age 92. A statement from the All India Institute of Medical Sciences (AIIMS) hospital said that Singh died due to an “age-related medical condition”. The soft-spoken former prime minister was born in undivided Punjab and was touted as the man who saved the Indian economy.
When India was on the verge of bankruptcy, Singh, who was then the Finance Minister, introduced policy changes that changed the country’s economic trajectory. As India now stands tall as the fifth-largest economy in the world, Singh’s revolutionary policies acted as a foundation for its growth.
In an impassioned speech, while presenting the Budget of 1991, Singh quoted Victor Hugo saying: “I do not minimise the difficulties that lie ahead on the long and arduous journey on which we have embarked. But as Victor Hugo once said, ‘No power on earth can stop an idea whose time has come.’ I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea”.
Here’s a look at how Singh saved the Indian economy from collapsing.
Prelude to the whole saga
Singh was sworn in as the Finance Minister in former Prime Minister PV Narasimha Rao’s cabinet in June 1991. During this time, the Indian economy was operating in accordance with the Nehruvian-socialist agenda. However, the economy was struggling with external debt pegged at 23 per cent of the Gross Domestic Product and Internal public debt amounting to 55 per cent of the GDP.
Not only this, the Indian employment rates went down to a negative and the fiscal deficit stood at eight per cent of the GDP. The effects of the poor state of the economy were felt everywhere with inflation rising by a good 13 per cent and retail inflation going even higher up the bend by a whopping 17 per cent.
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