Manmohan Singh, who died on Thursday night aged 92, was the architect of the country’s economic liberalisation in the early 1990s. He served as India’s prime minister for two consecutive terms, leaving an indelible mark on the nation’s governance and economy.
An economist of global standing, he was also the governor of the Reserve Bank and chief economic advisor to the government before he was chosen as the Finance Minister by the then prime minister Narasimha Rao. His policies as the finance minister in the 1990s laid the foundation of India's modern economic growth.
Manmohan Singh's policies, transformed the Indian economy, steering it towards a market-driven model and integrating it into the global economy. Here are five major reforms that defined his tenure and legacy.
Abolition of the Licence Raj: One of Manmohan Singh's most significant reforms was the dismantling of Licence Raj, a complex system of permits and regulations that stifled private enterprise and economic growth.
This reform was crucial during the economic crisis of 1991 when India faced severe balance of payments issues. Manmohan Singh's decision to abolish these restrictions allowed for greater freedom in business operations, encouraging entrepreneurship and attracting foreign investment.
As he noted, “We were importing significantly more than we were exporting, and our foreign exchange reserves were critically low.”
Trade liberalisation and import tariff reduction: Manmohan Singh's policies included substantial reductions in import tariffs, which facilitated trade and made foreign goods more accessible to Indian consumers.
By slashing tariffs from over 300% to around 50%, Manmohan Singh opened up the Indian market to global competition. This move not only benefited consumers through lower prices but also stimulated domestic industries to innovate and improve their products.
The introduction of these measures marked a significant shift towards a more open economy.
Encouragement of foreign direct investment (FDI): Under Manmohan Singh’s leadership, India saw a remarkable increase in foreign direct investment. His government implemented policies that eased restrictions on FDI across various sectors, including telecommunications, insurance, and retail.
This influx of foreign capital not only bolstered economic growth but also created jobs and improved infrastructure. Manmohan Singh’s approach to FDI was instrumental in positioning India as an attractive destination for international investors.
Tax reforms: Manmohan Singh introduced comprehensive tax reforms aimed at broadening the tax base and simplifying the tax structure. He raised the income tax exemption limit while reducing the number of tax slabs from four to three, which made compliance easier for taxpayers.
Manmohan Singh lowered the maximum marginal rate of personal income tax from 56% to 40%. These reforms improved revenue generation for the government while fostering a more conducive environment for economic activity.
National Food Security Act: During his tenure as Prime Minister, Dr. Manmohan Singh championed social welfare initiatives, including the National Food Security Act (NFSA) in 2013. This landmark legislation aimed to provide subsidised food grains to nearly two-thirds of India's population, ensuring that food security became a fundamental right for citizens.
The NFSA represented a significant step towards addressing hunger and malnutrition in India, highlighting Singh's commitment to social equity alongside economic growth.
Born in Gah, now in Pakistan, in 1932, Manmohan Singh rose from humble beginnings to become one of the most influential figures in modern India.
As finance minister in the early 1990s, he was key in introducing bold economic reforms that ended decades of protectionism, lifted trade barriers, and opened India’s economy to globalisation. His reforms are widely credited with transforming India into one of the world’s fastest-growing economies.
Despite leading a coalition government, he successfully implemented policies aimed at inclusive growth, poverty alleviation, and infrastructure development. Landmark initiatives during his tenure include the introduction of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the Right to Information Act, and the expansion of rural electrification and healthcare programmes.
A staunch advocate of fiscal prudence and economic stability, Singh navigated India through the global financial crisis of 2008 with policies that protected the economy from severe turbulence.
He also emphasised strengthening India’s global standing, fostering partnerships with world leaders and oversaw the signing of the historic India-US Civil Nuclear Agreement, ending India’s nuclear isolation.
Singh’s leadership was characterised by his quiet demeanour, intellectual depth, and unwavering commitment to public service. Despite facing criticism and challenges, he remained a figure of integrity and a symbol of progress.
While India's economic growth rate during the UPA government under Manmohan Singh averaged 6.7%, his second term between 2009 and 2014 saw high inflation, slowing down of decision-making by bureaucrats leading to what has been described as ‘policy paralysis’, and perceptions of corruption around the policy on telecom licensing.
Singh, a technocrat prime minister with a high degree of integrity, also had to deal with the perception of not being assertive. This, together with the anti-incumbency factor and NDA’s strong campaign focusing on development, captured the public imagination in 2014, leading to Narendra Modi’s rise as Singh’s successor.
India's present middle class is virtually the creation of Singh's policies as finance minister and prime minister, former finance minister P. Chidambaram posted on X, calling it a deeply emotional moment to speak about him. "The life and work of Dr Manmohan Singh and the period from 1991 till 2014 will be a golden chapter in the history of India," said Chidambaram, who was finance minister during the UPA government. "I worked closely with him for many years. I have not met a person more humble and self-effacing than Dr Singh. He wore his scholarship lightly and never claimed credit for any of his historic achievements" he added.
The former PM has achieved a string of degrees. From bagging a first class from Cambridge University to securing a first class even in matriculation, Manmohan Singh bagged it all.
Manmohan Singh completed his Bachelor's and Master's degrees in Economics at Panjab University in 1952 and 1954, respectively, and earned his Economic Tripos from Cambridge University in 1957. He then went on to complete a D.Phil in Economics at Oxford University in 1962.
Following his academic achievements, Singh taught at Panjab University and the Delhi School of Economics. In 1971, he joined the Government of India as an economic advisor in the Ministry of Commerce, and in 1972, he was promoted to chief economic advisor in the Ministry of Finance.
(By arrangement with livemint.com)