Manmohan Singh or Narasimha Rao, the hero of ‘reform’ in India’s economy?

Baru’s next question was, “Can you name the industry minister who brought about a radical change in India’s industrial policy?”

There was silence for a while. Then someone from behind said, ‘Manmohan Singh.’ Baru said, ‘Wrong.’ Some said Chidambaram. Kamal Nath said something, but no one present at that function in Hyderabad could remember that the father of that policy was none other than PV Narasimha Rao, who spent a large part of his life in his home city of Hyderabad, who was then Prime Minister. Simultaneously, he was also looking after the work of the Ministry of Industry.

As the budget was to be presented on July 24, 1991, none of the parliamentarians paid attention to the real reforms that completely overturned the industrial policy of Nehru and Indira Gandhi.

Manmohan Singh’s wife Gursharan Kaur told eminent economist Ishar Ahluwalia, “Often when Manmohan Singh was getting ready to leave for office, he used to hum his favorite shabad of the tenth Sikh Guru….

Deh shiva bar mohe, subh karman te kaboon na toron

Don’t be afraid, whenever I go, make sure I win.

Montek Singh Ahluwalia writes in his autobiography ‘Backstage the Story Behind India’s Growth Years’, “Religion may be a very personal subject for Manmohan Singh, but behind his gentle personality lies a Sikh man who takes all his strength through Gurbani. Is.”

On 24 July 1991, when Manmohan Singh, wearing a Nehru jacket and a sky turban, stood up to deliver his budget speech, the eyes of the whole country were on him. Montek Singh Singh Ahluwalia, Isher Ahluwalia, Bimal Jalan and top economic journalists of the country were sitting in the audience gallery.

At the very beginning of the speech, he admitted that he is feeling very lonely at the moment because he does not have the beautiful, smiling face of Rajiv Gandhi in front of him. In his speech, the family was repeatedly mentioned, whose policies he was rejecting outright.

first draft of the budgetmha Rao refused.

Prior to this, Manmohan Singh had played an important role in the preparation of at least seven budgets in the seventies. The budget of 1991 was the first budget which not only he had finalized but a large part of it was written by himself and now he was going to present it himself.

Renowned author Vinay Sitapati writes in Narasimha Rao’s biography ‘Half Lion’, “Manmohan Singh went to Narasimha Rao in mid-July with a draft of his top secret budget. A very senior official at that time and an Indian diplomat. He was also sitting next to Narasimha Rao. He remembers that when Manmohan Singh placed the summary of the budget in a page in front of Narasimha Rao, he had read it very carefully. Meanwhile Manmohan Singh continued to stand still. Then Narasimha Rao Looking at Manmohan Singh, he said, “If I wanted this budget, why would I have chosen you?”

This cannot be said with evidence that the first draft of Manmohan Singh’s budget may not have been as reformist as it appeared later. But it is well known that SP Shukla and Deepak Nayyar, two top finance ministry officials who helped make Manmohan Singh’s budget, did not agree with Manmohan Singh’s ideology. But it is clear from this description that Narasimha Rao had given a message to Manmohan Singh to be bolder.

meet the budget deficit Two and a half reduced percentage

The most striking feature of Manmohan Singh’s 18,000-word budget speech was that he brought down the budget deficit from 8.4 percent of GDP to 5.9 percent. Reducing the budgetary deficit by about two and a half percent meant a huge reduction in government spending.

In his budget, he not only laid the foundation of a vibrant capital market, but also reduced the subsidy on fertilizer by 40 percent. The prices of sugar and LPG cylinders were also increased. He again discussed the industrial policy announced a while back. Here also he did not forget to thank Nehru, Indira and Rajiv Gandhi for the large and diverse industrial structure.

Manmohan Singh ended his speech with Victor Hugo’s famous quote, “No power in the world can stop an idea whose time has come. One such thought is the rise of India as a great economic power in the world.” Let the whole world hear clearly that India has woken up. We Shall Prevail. We Shall Overcome.”

Vinay Sitapati writes, “Within a day, Rao and Manmohan together put an end to the three pillars of the Nehru era, the license raj, the monopoly of the public sector and India’s isolation from the world market. As Manmohan Singh concluded his speech Sitting in the audience gallery, Bimal Jalan looked into Jairam Ramesh’s eyes and gestured for a thumbs up.

Abid Hussain, who had worked with Manmohan Singh in the Planning Commission, was India’s ambassador to the US at that time.

Montek Singh Ahluwalia writes that “He called us from Washington and said that Manmohan has presented a great budget. Then he asked my wife Ishtar to hug the Finance Minister on his behalf and give him that song from the film ‘Jagruti’. Remind us. Then Abid sang that song to us on the phone itself, ‘De di hume azaadi bina khadga bina dhaal / Sabarmati ke sant tune kar diya kamal.’

Although this song was written for Mahatma Gandhi, but in the present context it was completely applicable to Manmohan Singh as well. Abid made another important point. Manmohan Singh’s simplicity and thrifty way of life empowered him to advocate liberalism. The allegation on him did not stick that he supported liberalism because of his fascination for consumerism and luxurious life.

The icing on gold happened when the dollar earned in the South Commission job in Geneva increased due to the devaluation of the rupee, so he added all the extra money and deposited it in the Prime Minister’s Relief Fund.

The common people had welcomed the budget but Manmohan Singh’s political allies and leftists were not happy with this budget. The ‘burning of the pyre of industrial control’ and the 40 per cent increase in urea prices in the past decade was not acceptable to him.

Jairam Ramesh writes in his book ‘To the Brink and Back India’s 1991 Story’, “When I told Narasimha Rao about the mood of Congress MPs, his only remark was, You guys have to work within a political system. He even said that Manmohan should have been more careful in making the budget. He forgot that as Prime Minister he had advised Manmohan Singh to take bold decisions and the seal of approval on Manmohan Singh’s budget speech was Narsingh. Rao did it.”

The National Herald, a Congress newspaper, took a jibe at the Rao government and said, “This budget has provided crispy corn flakes and frothy drinks to the middle class, but this was never the priority of the founders of our country.”

There was so much anger among Congress MPs about the budget that on August 1, 1991, a meeting of the Congress Parliamentary Party was called in which the Finance Minister defended his budget.

Rao stayed away from this meeting and allowed Manmohan Singh to face the anger of the MPs on his own strength. On 2nd and 3rd August there were more meetings of Congress MPs but Prime Minister Rao himself was present in these meetings.

Jairam Ramesh wrote, “It would be no exaggeration to say that the Congress Parliamentary Party has never been as active as it was in 1991, except during Nehru’s time. Freedom should be given, but the final decision should be their own. Now I think it was a smart way to deal with the situation, although neither I nor the Finance Minister was liking it at that time. But when Manmohan Singh himself became the Prime Minister and I became the first MP and then the Union Minister, then we understood that there was no better way to deal with such a situation.

Manmohan Singh was completely isolated in the meetings of the Congress Parliamentary Party in those days. Alam was that only two MPs from Tamil Nadu, Mani Shankar Aiyar and senior Congress leader from Rajasthan, Nathuram Mirdha came openly in support of Manmohan Singh. Among those protesting were Agriculture Minister Balram Jakhar, Communications Minister Rajesh Pilot and Minister of State for Chemicals and Fertilizers Chintamohan who were openly criticizing their own government’s proposals.

Fifty Congress MPs wrote letters to the Finance Minister under the banner of the Agriculture Parliamentary Forum, openly criticizing the budget proposals. Interestingly, this forum was headed by a senior MP from Maharashtra, Prataprao Bhonsle, who was considered close to Rao. The odd thing was that this letter was also signed by South Mumbai MP Murli Deora who was considered close to the industrialists. But Rao did not bow down to this political pressure.

A fortnight later, Sudip Chakraborty and R Jagannathan wrote in the India Today issue, “Rao did what Rajiv Gandhi forgot to do as prime minister. He talked about taking India into the 21st century, but outside the present century.” Rao and Manmohan could not get out, where on one side they read the words of Nehru’s socialism, but on the other hand holding the nation’s guise and said, go ahead or else we will all die.

The question arises whether the credit for the change in 1991 should be given to Rao or his Finance Minister Manmohan Singh?

Sanjay Baru writes, “A few years before Rao’s death, a journalist had asked him the same question. Rao praised Manmohan Singh and acknowledged his contribution to economic reforms. But at the same time he also said that finance in India A minister is like a zero mark. His strength depends on how many zeros are put in front of him. That is to say, the success of the finance minister depends on how much support he has from the prime minister.