A Reformer Who Had Concern for Vulnerable Groups

The reforms witnessed in the early 1990s had a big impact when Dr Singh became PM

- C. Rangarajan

The passing away of Manmohan Singh creates a big void in India's intellectual scene. He was a man of vision and ideas. India's economy is what it is today because of the pioneering efforts of Singh in the early 1990s to reform the economy. The crisis of 1990 needed for its correction reforms of stability and structural change. The decision to devalue the rupee was the first step towards stability. In fact, what followed was even more important. These are structural reforms.

The break with the past came in three important directions. The first was to dismantle the complex regime of licenses, permits and controls that dictated almost every facet of production and distribution. Barriers to entry and growth were dismantled. The second change in direction was to reverse the strong bias towards state ownership of means of production and proliferation of public sector enterprises in almost every sphere of economic activity. Areas once reserved exclusively for the state were thrown open to private enterprise.

The third change in direction was to abandon the inward-looking trade policy. By embracing international trade, India signaled that it was boldly abandoning its export pessimism and was accepting the challenge and opportunity of integrating with the world economy. This approach is very different from what we used to do when faced with balance of payments problems earlier.

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