Manmohan Singh's landmark reforms that liberated India’s economy

When Manmohan Singh took over as India's Finance Minister in 1991, the country was facing a dire balance-of-payments crisis. Foreign exchange reserves were at dangerously low levels, barely enough to cover two weeks of imports. The economic situation demanded immediate and drastic measures, and Singh, along with then-Prime Minister Narasimha Rao, rose to the challenge, ushering in a transformative era for India’s economy.

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Singh's bold reforms dismantled the infamous License Raj — a complex web of regulations that stifled industrial growth. By eliminating the system that required businesses to obtain numerous permits and licenses for every move, Singh opened the floodgates for private enterprise to thrive. This shift towards economic liberalization also saw the reduction of import tariffs, devaluation of the rupee, and encouragement of foreign direct investment (FDI), helping India integrate more effectively into the global economy.

The impact of these reforms was immediate. India’s economy, previously stagnating at growth rates of 3-4%, saw a remarkable surge, averaging 7.7% GDP growth during Singh’s tenure as Prime Minister. The liberalization laid the foundation for India’s economic boom in the years to come, turning it into one of the world’s fastest-growing economies. Manmohan Singh’s vision of a more market-oriented economy continues to shape India’s growth story today.