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Introduction

 

Dr. Manmohan Singh is one of the best prime ministers of India and has been widely acclaimed for his unwavering expertise in finance. His trailblazing policies have changed the financial landscape of India and as well as steered the Indian economy to reach new heights. In this blog, we are going to extensively analyze the visionary economic policies and how it benefitted the Indian economy.

 

Liberalisation of the Indian economy:

 

 As the finance minister in Narasimha Rao’s government, he played a key role in liberating the Indian economy from a controlled system. When Singh commenced his tenure as the finance minister, India was on the verge of economic collapse.

 

 In July 1991, the Reserve Bank of India pledged 46.91 tonnes of gold to the Bank of England and the Bank of Japan, securing $400 million to address the immediate economic crisis. Singh subsequently devalued the rupee to enhance the competitiveness of Indian exports in international markets. Additionally, he lowered import tariffs and removed barriers to foreign trade, paving the way for India’s integration into the global economy.

 

Abolishing the license raj : 

 

  Singh introduced a new industrial policy that abolished the ‘Licence Raj.’ Previously, industries needed government approval for various activities, such as expansion and production. The revised policy deregulated nearly 80% of the industrial sector and reduced the number of industries reserved for the public sector from 17 to 8. This reform encouraged private enterprises and attracted foreign investment, promoting industrial growth and creating jobs.

 

Reforms at the Bank sector : 

 

 Under his leadership, the financial sector saw transformative reforms. Acting on the recommendations of the Narasimham Committee, the statutory liquidity ratio (SLR) was gradually reduced from 38.5% to 25%, while the cash reserve ratio (CRR) was brought down from 25% to 10%. These changes enabled banks to extend credit more freely, stimulating economic growth. Licensing norms for bank branches were relaxed, and interest rates were deregulated, fostering a more competitive and efficient banking environment.

 

Conclusion : 

 

It is indeed true that Dr. Manmohan Singh has left an indelible legacy. Beyond his successful tenure as Prime Minister and Finance Minister, Dr. Singh was an academician par excellence, which laid the foundation for his illustrious career. His economic policies not only revived the country from economic collapse but also built a strong foundation for sustainable growth.

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