In 1991, India faced an economic crisis marked by dwindling foreign reserves and a looming collapse. It was against this backdrop that Dr. Manmohan Singh, serving as finance minister under Prime Minister PV Narasimha Rao, presented a transformative Union Budget. His bold reforms not only averted disaster but reshaped the nation’s economic landscape.
Dr. Singh’s reforms, which he termed as a “budget with a human face,” aimed to stabilize the economy while modernizing its framework. These measures included liberalizing industrial policies, inviting foreign investment, and revamping public sector performance. Singh emphasized increasing productivity and aligning India’s industries with global competitiveness.
However, implementing such drastic changes wasn’t without challenges. Opposition within the Congress party itself was fierce, with many leaders struggling to accept the reforms. According to Congress leader Jairam Ramesh in his book To the Brink and Back: India’s 1991 Story, Singh faced intense criticism during parliamentary meetings. Despite this, he stood firm, addressing an unscheduled press conference to ensure his budget’s message was communicated effectively.
While only a handful of MPs, including Mani Shankar Aiyar, openly supported Singh’s vision, Prime Minister Rao adopted a hands-off approach, leaving Singh to bear the brunt of dissent. Rao eventually mediated by organizing meetings to address party concerns, leading to a compromise that slightly reduced fertilizer price hikes while maintaining other key proposals.
The reforms paved the way for economic liberalization, earning Singh recognition as the architect of modern India’s economic policies. The historic budget not only pulled India back from financial collapse but also laid the foundation for sustained growth and global integration.
Dr. Singh’s steadfast resolve during this “trial-by-fire” exemplifies how visionary leadership can overcome political resistance to achieve lasting change.
