How b'day boy Manmohan Singh changed the economic graph

Former Prime Minister Dr Manmohan Singh turns 87 today. Singh held the post of the Prime Minister for two consecutive terms, from 2004 to 2009 and 2009 to 2014.

During his tenure as Prime Minister, Singh was described as a puppet in the hands of Congress president Sonia Gandhi.

He was also the Finance Minister of the country, 13 years before becoming the Prime Minister. In 1991, when India's economy was under severe crisis as it was a closed economy and had fixed exchange rate system, Dr Singh, who was the Finance Minister, announced a budget with the full support of the then Prime Minister P V Narasimha Rao that changed the economic graph of India. He announced the liberalisation of Indian economy and shattered the till then existing socialist economic structure of India.

Also Read: PM wishes Manmohan Singh on his 87th birthday

After Independence, India had opted for a socialist economy as it had faced the evils of the capitalist economy based on the experience of the British rule. In the socialist economy, state-monitored industrialisation had dominance in the job market, promoted the public sector, had a licence for almost everything making it very difficult for the private sector to bloom and flourish.

As a result of the previous economic structure, at that time, there was an increase in unemployment, the fiscal deficit was eight per cent of the GDP, retail inflation was 17 per cent and had foreign exchange reserves only to purchase needfuls for the next two weeks.

Amidst the crisis, Singh announced the idea of liberalisation The liberalisation of the economy promoted private entities and attracted global businesses.

The reformation included end of license raj that harassed private sectors, devaluation of Rupee by 9 per cent, an emergency loan taken from International Monetary Fund (IMF) helping India prevent debt default, trade policy was reworked and export subsidies were abolished, and major tax reformations were done giving special concession to IT industries.

The decision of Singh in the 90s changed the future of India forever and made history.