THE GREAT OPENING

Structural reforms did more than just drag India's economy back from the brink. In a virtuous segue from Rajiv's prelude on telecom and IT, the Rao-Manmohan duo wrote the opening act of a new script

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No single economic policy post-Independence had as foundational and as far-reaching an effect as the liberalisation process of 1991. As often happens with major evolutionary breaks, contingency had a greater role than prior design. In 1990, India was staring at a severe balance of payments (BoP) crisis, caused by unsustainable borrowing and high expenditure. Things came to a head during the short-lived Chandra Shekhar government. Now, it’s mostly remembered for the one uninvited distinction it was fated to earn during its four-month tenure: having to mortgage India's gold as the nation ran out of foreign exchange reserves. For succour, India reached out to the International Monetary Fund (IMF). The script from thereon contained a few classic and globally well-recognised acts of expiation.