ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

A+| A| A-

Looking Back and Looking Ahead at the Liberalisation Process

July 1991 was a momentous month in the contemporary economic history of India. The rupee was drastically devalued by around a fifth in two tranches in the beginning of that month, almost exactly 25 years after a similar devaluation had taken place. A few weeks later towards the end of the month, a new budget and an industrial policy regime were announced that did away with what was derogatorily described as the licence-control raj. The months that preceded P V Narasimha Rao appointing academic-turned-technocrat Manmohan Singh as finance minister were a period of tremendous turmoil for India’s political economy.

A series of dramatic events preceded this: Vishwanath Pratap Singh’s government fell, the one headed by Chandra Shekhar was unstable and short-lived, and Rajiv Gandhi was assassinated as the general elections were under way. Non-resident Indians had withdrawn their deposits. The country’s gold stocks had been mortgaged to raise foreign currency whose reserves had plummeted to barely a fortnight’s import requirements. There was danger of the government defaulting on its external financial obligations as it prepared to go to the International Monetary Fund (IMF) for contingency funding. Many have contended that the economic liberalisation process would never have taken place had it not been for this unprecedented crisis.

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here

Back to Top