India’s former prime minister Dr Manmohan Singh has said that the country’s economy is in trouble and the road ahead is even more daunting than during the 1991 economic crisis.
In a statement marking the 30th anniversary of economic liberalization on Friday, Singh said the nation will have to recalibrate its priorities to ensure a dignified life for all Indians. The well-known economist also expressed concern over the devastation caused by the Covid-19 pandemic and the loss of millions of lives in India.
“The social sectors of health and education have lagged behind and not kept pace with our economic progress,” the former prime minister said. “Too many lives and livelihoods have been lost that should not have been. It is not a time to rejoice and exult, but to introspect and ponder. Our priorities as a nation need to be recalibrated to foremost ensure a healthy and dignified life for every single Indian,” the former prime minister said.
The pandemic has also devastated the country’s economy. A recent Pew Research Center analysis estimated that the middle class in India shrank by 32 million in 2020 as a consequence of the downturn caused by the pandemic.
Singh said that on July 23, 1991, the Congress party had ushered in significant reforms of India’s economy and paved a new path for the nation’s economic policy.
In the late 1980s, India had been hit by a balance of payment crisis as its imports swelled and by the end of 1990, its foreign exchange reserves had been badly depleted. The World Bank and IMF also had stopped their assistance, forcing the government to mortgage the country’s gold to avoid payment defaults.
Singh, who became the finance minister in 1991, brought far-reaching reforms that later changed the face of the Indian economy. A key highlight was drastic changes in industrial and export-import policy. He said the reforms process unleashed the spirit of free enterprise, which has helped produce some world-class companies and helped India emerge as a global power in many sectors.
“Over the past three decades, successive governments have followed this path to catapult our nation to a $3 trillion economy and into the league of the world’s largest economies. More importantly, nearly 300 million fellow Indians have been lifted out of poverty in this period and hundreds of millions of new jobs have been provided for our youth,” Singh noted.
The former prime minister observed that although the economic liberalization process in 1991 was triggered by an economic crisis, it was not limited to crisis management.
“The edifice of India’s economic reforms was built on the desire to prosper, the belief in our capabilities, and the confidence to relinquish control of the economy by the government. I was fortunate to play a role in this reform process along with several of my colleagues in the Congress,” Singh said.
Recalling his stint as the finance minister in 1991, Singh said he ended his budget speech by quoting Victor Hugo: “No power on Earth can stop an idea whose time has come.” He added that, thirty years hence, “as a nation, we must remember Robert Frost’s poem, ‘But I have promises to keep, and miles to go before I sleep.””
Meanwhile, India’s richest man, Mukesh Ambani, lauded the economic reforms of 1991, but said they benefited citizens unevenly. There is a need for the “Indian model” of development to focus on creating wealth at the bottom of the pyramid, he said.
In a newspaper column, the Reliance Industries Chairman pointed out that in 1991 the country’s gross domestic product was $266 billion – and in three decades it has grown by over ten times.
“India transformed from an economy of scarcity in 1991 into an economy of sufficiency in 2021. Now, India has to transform itself into an economy of sustainable abundance and equitable prosperity for all by 2051,” Ambani said.
Ambani forecast that India can be at par with the US and China by 2047. Meanwhile, “In India, equity will be at the heart of our collective prosperity,” he observed.