<div>The 25th anniversary of the launch of economic reforms on July 1, 1991 has provided an opportunity for an assessment of the record of the reforms and a view of the challenges lying ahead. It is well accepted that the policies and decisions which started on that day with the devaluation of the rupee changed the country’s economy beyond recognition. In the next few days and weeks, a blitz of measures like the lifting of import controls, ending of the licence permit raj, removal of curbs on foreign investment, lowering of taxes and cut in customs duties, removal of wealth tax, introduction of VAT, the dismantling of public sector monopoly in some areas and an overhaul of the stock market system opened up the economy. The entire liberalisation programme may have been forced upon the country as there was a crisis with the country mortgaging its gold abroad and having only foreign exchange needed for a few days of import.<br /><br />The crisis was turned into an opportunity. Then prime minister Narasimha Rao and finance minister Manmohan Singh led the country through the reforms for the next five years and laid the foundation for a strong and open economy. The reforms enabled the country to move up from the 10th largest economy in the world to the third largest now. The exchange reserves have increased over 300 times, the GDP has multiplied over six times and the number of people below the poverty line halved. The private sector, which was afraid of competition, has thrived and gained confidence. The liberalisation programme unleashed latent energies and the unrecognised potential of the economy. It helped the country to withstand tumults like the 2008 global meltdown. Many of the sceptics and opponents of reforms, who ranged from sections in the ruling party to the opposition, have had to accept since then the need for and the relevance of the programme. That is why the programme has continued through successive governments in the next two decades.<br />But the implementation of the programme has not been consistent and the pace has varied. It lagged even during the time of the UPA II government. Politics has often played foul, as seen by the BJP’s opposition to the GST legislation when the UPA was in power and the obstruction by the Congress now. As Manmohan Singh has said, when the crisis is over, the country becomes complacent. There is the need to expand and speed up the reforms again and national interest demands that the best plans for future are not stymied by narrow politics. The government sho-uld also ensure that the environment is right for reforms. <br /><br /></div>
<div>The 25th anniversary of the launch of economic reforms on July 1, 1991 has provided an opportunity for an assessment of the record of the reforms and a view of the challenges lying ahead. It is well accepted that the policies and decisions which started on that day with the devaluation of the rupee changed the country’s economy beyond recognition. In the next few days and weeks, a blitz of measures like the lifting of import controls, ending of the licence permit raj, removal of curbs on foreign investment, lowering of taxes and cut in customs duties, removal of wealth tax, introduction of VAT, the dismantling of public sector monopoly in some areas and an overhaul of the stock market system opened up the economy. The entire liberalisation programme may have been forced upon the country as there was a crisis with the country mortgaging its gold abroad and having only foreign exchange needed for a few days of import.<br /><br />The crisis was turned into an opportunity. Then prime minister Narasimha Rao and finance minister Manmohan Singh led the country through the reforms for the next five years and laid the foundation for a strong and open economy. The reforms enabled the country to move up from the 10th largest economy in the world to the third largest now. The exchange reserves have increased over 300 times, the GDP has multiplied over six times and the number of people below the poverty line halved. The private sector, which was afraid of competition, has thrived and gained confidence. The liberalisation programme unleashed latent energies and the unrecognised potential of the economy. It helped the country to withstand tumults like the 2008 global meltdown. Many of the sceptics and opponents of reforms, who ranged from sections in the ruling party to the opposition, have had to accept since then the need for and the relevance of the programme. That is why the programme has continued through successive governments in the next two decades.<br />But the implementation of the programme has not been consistent and the pace has varied. It lagged even during the time of the UPA II government. Politics has often played foul, as seen by the BJP’s opposition to the GST legislation when the UPA was in power and the obstruction by the Congress now. As Manmohan Singh has said, when the crisis is over, the country becomes complacent. There is the need to expand and speed up the reforms again and national interest demands that the best plans for future are not stymied by narrow politics. The government sho-uld also ensure that the environment is right for reforms. <br /><br /></div>
