Former Prime Minister Manmohan Singh, widely regarded as the principal architect of India’s economic liberalisation, passed away in New Delhi on Thursday. Singh, 92, had been admitted to the emergency department of AIIMS.
Paying tribute, Prime Minister Narendra Modi said on X: “India mourns the loss of one of its most distinguished leaders whose wisdom and humility were always visible.”
Singh served as the prime minister from 2004 to 2014 and was a member of the Congress. A noted economist, he was the first PM since Jawaharlal Nehru to be re-elected after completing a full five-year term.
As the finance minister between 1991 and 1996, Singh heralded comprehensive deregulation of the Indian economy by dismantling the licence raj, and whittling down trade barriers. As the country was gripped by a balance of payments crisis, he seized the moment to usher in path-breaking reforms on the economic front, a development that led the country to become a fast-growing economy, with a burgeoning middle class, a large and booming service sector, and solid consumption growth.
A prime minister in the United Progressive Alliance (UPA)-1 government — he was a surprise choice for the post— Singh not only kept pace with the reforms agenda, but also launched policies aimed at inclusive economic growth.
That government enacted the National Rural Employment Guarantee Act in 2005, which provides for a demand-based jobs scheme of minimum of 100 days of employment per year, to ensure sustenance wages for the rural poor.
In the same year, the Right to Information Act, too, was brought in, and it has since served as a tool for higher accountability in governance.
His second term as prime minister (UPA-II 2009–2014) saw the enactment of the National Food Security Act. The later part of that term saw a host of corruption allegations against the government, including over the allocation of natural resources like telecom spectrum and coal blocks. In UPA-I, Singh stood firm despite heavy coalition odds to sign the agreement for civil nuclear cooperation between India and the US. The agreement granted India, despite not being a signatory to the Nuclear Non-Proliferation Treaty, access to nuclear technology and fuel for its civilian nuclear energy projects.
Singh’s 1991 Budget speech, which began with the declaration that, “no power on Earth can stop an idea whose time has come”, unleashed a set of crucial economic reforms that helped integrate Indian economy with the rest of the world. To address the depletion of foreign exchange reserves, the rupee was made to lose 19% with respect to the dollar, a move that made exports competitive.
Specifically, quantitative import restrictions were progressively removed and import tariffs limited to not higher than 150%, while lowering rates across the board, along with excise duties for domestic manufacturing. Also, his tenure as finance minister saw cuts in SLR and CRR rates, liberalisation of interest rates, loosening restrictions on private banks, and allowing banks to open branches as they deem fit.
The period also saw the RBI, acting in close coordination with the government, moving towards flexible but managed exchange rate. The market was given the confidence that the RBI had the ability to intervene in the market when warranted. By 1996, the exchange rate became sufficiently flexible and interest rates became market-determined.
Singh was born on September 26, 1932, in the Punjab province of undivided India. His academic credentials were burnished by the years he spent on the faculty of Punjab University and the Delhi School of Economics. He went on get a doctorate from the Nuffield College at Oxford University in 1962. In 1971, Singh joined the government of India as economic advisor in the commerce ministry. This was soon followed by his appointment as chief economic advisor. He also held several other positions in the government, including secretary in the Ministry of Finance, Deputy Chairman of the Planning Commission, RBI governor and advisor of the Prime Minister; and chairman of the University Grants Commission. He was the leader of the Opposition in Rajya Sabha between 1998 and 2004.