When, 25 years ago, a devaluation of the Rupee through economic reforms seemed the obvious step to the Narsimha Rao government, but it was also fraught with a lot of political risks.
In 1966 Indira Gandhi had devalued the Indian rupee by 57 percent, which triggered a lot of criticism in the Parliament and media. Indians claimed this act as a ‘sell-out to America and the World Bank’.
The reform policy of 1991, too, had a lot of opposition in the country and even within the Congress party. Prime Minister Narsimha Rao’s political management made it possible to overcome all the oppositions.
“I was a loner and had no group. Even in the Congress Parliamentary Party meeting, when the Budget was being discussed, there was a lot of opposition and the only people who supported me, in favour of what I had done, were Nathuram Mirdha and Mani Shankar Aiyar.” Manmohan Singh said in an interview with The Indian Express.
The famous Bombay Club in a lobbying effort by domestic and traditional industrialists was opposed to it.
“I talked to a number of people — industry, politicians, people in state governments. I talked to the press also often then, and we slowly managed to overcome the resistance.”
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In the very first week itself, there was opposition to the reforms agenda. But he secured the support of P N Dhar, K N Raj, I G Patel and R N Malhotra. “They came out with a statement supporting the reform process,” he said.
“I think the Left was against it,” he added.
A N Verma, the principal secretary to the Prime Minister, helped in getting a strong support from the civil service. “I wanted the PM’s Secretariat to be consciously involved in pushing the reform process,” he said.
Even The National Stock Exchange was strongly opposed by ‘Bombay stockbrokers’ and ‘captains of industry’.
“I thought some competition is good. The exchange has given a very good account of itself,” he said.