Amidst a looming international debt crisis exacerbated by a volatile political climate and tensions in the Gulf region, India faced a precarious situation in 1991, with foreign exchange reserves only sufficient to cover imports for just two weeks. In response, the country embarked on significant economic reforms, known as the liberalization, privatization, and globalization (LPG) of the Indian economy.
The announcement, “I rise to present the budget for 1991-92,” echoed in our minds the day after the Union Budget 2024 was presented in Parliament. The 1991 budget, dedicated to former Prime Minister Rajiv Gandhi, marked a pivotal shift towards a market-driven economy and set the stage for rapid economic expansion in the years that followed.
Thirty-three years later, the Congress party acknowledged the contributions of then-Finance Minister Manmohan Singh, who crafted the landmark Budget. In a post on X, Congress stated, “Today, on the anniversary of the 1991 Economic Reforms, we thank Dr. Manmohan Singh for its formulation under the leadership of P. V. Narsimha Rao. The Reforms, a boon for the Indian economy, rescued it from bankruptcy and economic collapse and set it on a path of monumental growth.”
Today, on the anniversary of 1991 Economic Reforms, we thank Dr. Manmohan Singh for its formulation under the leadership of P. V. Narsimha Rao.
The Reforms, a boon for the Indian economy, rescued it from bankruptcy & economic collapse and set it on a path of monumental growth. pic.twitter.com/GUiuHgaXKf
— Congress (@INCIndia) July 24, 2024
Kharge emphasized the current need for substantial, second-generation reforms to benefit both the middle class and the underprivileged, underscoring the continuing relevance of such transformative changes. He tweetd on X
July 1991 marked a watershed moment in India's history, as the Liberalisation Budget, spearheaded by then Prime Minister P.V. Narasimha Rao and Finance Minister Dr. Manmohan Singh, ushered in a new era of economic reforms.
This visionary move revolutionised the country,… pic.twitter.com/Yd3xC73PO5
— Mallikarjun Kharge (@kharge) July 24, 2024
This recognition followed the presentation of the Union Budget for 2024-25 by the BJP-led NDA government, which the opposition has dubbed the “Kursi Bachao Budget.” Critics pointed to the financial packages for Bihar and Andhra Pradesh as “hollow promises” aimed at appeasing allies at the expense of other states.
In his Budget speech, Manmohan Singh concluded with Victor Hugo’s famous words, “No power on earth can stop an idea whose time has come.” His tenure was marked by significant economic transformations, including the privatization of public sector enterprises, the liberalization of airspace, and the stimulation of new industries. These reforms significantly increased disposable incomes for the middle class and fueled consumerism.
Under Singh’s leadership, regulations on exports and imports were relaxed, fostering a favorable business environment and a surge in entrepreneurship. The establishment of the National Stock Exchange (NSE) in 1992 highlighted his tenure, which was instrumental in guiding India out of financial turmoil, rejuvenating the economy, and steering it towards substantial growth.