Among the economic theorists who support the case of free markets and liberal economy, Atal Bihari Vajpayee tends to get the support of the majority for his landmark economic reforms which were brought about even with a chaotic coalition. Atal Bihari Vajpayee passed away on Thursday after a prolonged illness.
He was known to carry forward the spirit of economic reforms introduced under PV Narasimha Rao government of 1991. Many of his economic decisions are even followed up by the present Modi regime such as on ‘disinvestment’ and ‘fiscal profligacy.’
Major economic reforms under Vajpayee government
Infrastructure: The Vajpayee government is known to have taken road and infrastructure projects to the next level in the country through the Golden Quadrilateral and the Pradhan Mantri Gram Sadak Yojana. The government was successful in connecting four major metro cities namely Chennai, Kolkata, Delhi and Mumbai through a network of highways. The Pradhan Mantri Gram Sadak Yojana laid down a network of roads for the unconnected villages across India.
Fiscal profligacy: With an aim to check the fiscal profligacy, the Vajpayee government introduced the Fiscal Responsibility Act. The public sector savings surged from – 0.8 percent of GDP in the fiscal year 2000 to 2.3 percent in the fiscal year 2005, as a result.
Privatisation: Vajpayee was always on the side of cutting down the role of government in running businesses. He followed it up with an establishment of a separate disinvestment ministry. Current Finance Minister Arun Jaitley was the first disinvestment minister. Bharat Aluminium Company (BALCO) and Hindustan Zinc, Indian Petrochemicals Corporation Limited and VSNL were the most famous disinvestments.
Telecom revolution: With the introduction of new telecom policy, Vajpayee government brought about a telecom revolution in the country by replacing fixed license fees for telecom firms with a revenue-sharing arrangement. As Telecom Dispute Settlement Appellate Tribunal was set up, government’s regulatory and dispute settlement roles were also separated. Even the Modi government is working strategically to ensure further growth of telecom sector in the country.
Despite doing good on many economic indicators, the Vajpayee government failed to get re-elected in the following 2004 general elections. It happened at a time when the government came out with an astutely crafted ‘India Shining’ slogan referring to the comprehensive feeling of economic optimism in India then.