Hyderabad: Former minister Jairam Ramesh, who had a ringside view of the 1991 economic reforms as officer on special duty in P.V. Narasimha Rao’s PMO, said the reforms had changed the face of India as a global economy, but the results were mixed.
“Yet, governments thereafter made no U-turn on the policy and are continuing with the agenda till date. It’s a mixed answer. On trade and industry, we have been very successful. On the fiscal side, we have been less successful. But it’s not surprising that fiscal policy is less of policy and more of political entitlement. One step forward and two steps backward,” he remarked.
Declaring that 33 days in 1991 changed India, he said due to compulsion, reforms were undertaken by P.V. Narasimha Rao and then finance minister Manmohan Singh to beat the unprecedented economic crisis. India now needs equally strong reforms in the public health sector which has “completely collapsed.”
Quoting a former Chief Election Commissioner who called economic reforms as LPG, one of “Liberalisation, Privatisation and Globalisation, he said that under Rao and Singh, liberalisation created a whole new economic environment. It led to acceleration of economic growth, which resulted in reduction of poverty and a remarkable burst of entrepreneurship in the country. “Globalisation certainly worked for India’s benefit, increased trade, and created new avenues for Indian business. Privatisation still remains an emotive political issue, he said.
“Three things we started off with in 1991, namely the new industrial policy, the new trade policy and the new fiscal policy. I would say the objectives of the new industrial policy has been achieved 9 out of 10, objectives of new trade policy 9 out of 10, and objectives of new fiscal policy, may be 4 out of 10,” he said.
Mr Ramesh, also a former OSD in Narasimha Rao PMO, was speaking at a function organised by Manthan marking the launch of his book, The Brink and Back, India’s 1991 story on economic reforms.
He said the then Opposition and even Congress leaders, including a majority of parliamentarians opposed economic reforms, but Narasimha Rao and Manmohan Singh went ahead and had the last laugh. The country had the much-needed packaging of reforms with a human face which accelerated growth in almost all spheres. “Narasimha Rao did not get the credit due to him for the reforms which were clouded over Babri demolition, but he should be given the due credit.”
Mr Ramesh said the debate that took place in 1991 on the role of subsidies, reorientation of expenditure from subsidy to investment, how to ensure subsidy reach targeted groups, the appropriate mix of public and private delivery of essential services, education and health was still continuing.
“There is no political motive in writing this book... The first reason was I had time on my hands after the election debacle of 2014. Secondly, we are appr-oaching next year the quarter century ... the silver jubilee of the 1991 reforms and it’s good reason to look back and see what happened.”
