If one sits down to pen India’s economic history after Independence, it could be broadly classified into two eras — Pandit Jawaharlal Nehru’s socialist era from 1950 to 1991 and Dr Manmohan Singh’s liberal economic regime from 1991 onwards.
The economic policies before 1991 were largely influenced by India’s suspicion of foreign traders, in view of its experience with the British who sailed to Indian shores for trade and entrenched themselves as rulers. The distaste for foreign investment continued even though the Indian economy performed at suboptimal level growing at an yearly average of 3.9 per cent from 1950 to 1990. While India managed to lay the foundation for large basic industries, the lack of competition and a captive market robbed the Indian manufacturers of incentive to produce world-class products.
In 1991, following India’s worst financial crisis, Dr Manmohan Singh dismantled the old Fabian socialist thought in India by opening up the Indian economy. Instead of fear for foreign capital, Dr Singh’s Budget speech exuded his confidence in the Indian economy. He argued for allowing direct foreign investment into India for capital, technology, and markets. His words about the arrival of India on the global stage proved to be truly prophetic.
Since 1991, India’s economic growth has picked up and helped more than 500 million people to come out of extreme levels of poverty. Manmohan Singh’s reforms, which were continued by his successors, created globally competitive companies in India. His policies laid the path for the robust expansion of the middle class.
It also created prosperity in the country, which funded the government’s ambitious welfare programmes like the National Rural Employment Guarantee Scheme, subsidised food grains to the poor, midday meals at schools and social security schemes for elderly.
In one of his last interviews in 2023, Dr Singh sounded confident about the Indian economy’s ability to navigate through the recent geopolitical and geoeconomic maelstroms, provided the country remains a harmonious society. India must not forget this prescription of Dr Singh ever.
