Former Prime Minister Manmohan Singh died at the age of 92 on 26th December 2024 at AIIMS Delhi. To honour him, the central government has declared 7 days of national mourning.

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Major Reforms and Decisions

As Finance Minister (1991 – 1996)

LPG Reforms (Liberalization, Privatization, Globalization)

• Liberalization:
  • New Trade Policy: A new trade policy was introduced to boost exports by simplifying the licensing process and linking non-essential imports to exports.
  • Tradeable Exim scrips: Export subsidies were removed, and tradeable exim scrips were introduced for exporters based on the value of their exports.
  • Trade Monopoly: The provisions of the Monopolies and Restrictive Trade Practices Act were relaxed to facilitate business restructuring and mergers.
  • Abolition of License Raj:  Allow industries to operate without prior government approval in all but a few strategic sectors.
  • Financial Sector Reforms: Implemented financial sector reforms, such as reducing the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR), to enhance the efficiency of the banking system.

• Privatization:
  • FDI: Automatic approval for Foreign Direct Investment (FDI) up to 51% was introduced, compared to the previous cap of 40%.
  • Public sector monopoly: Public sector monopoly was restricted to sectors critical for national security.
    • Initiated disinvestment of government stakes in public sector undertakings (PSUs) to improve efficiency.
• Globalization:
• • Open Economy: The focus was on integrating India’s economy with the global market and encouraging international trade and investment.
  • Rupee Devaluation: Massive devaluation of the rupee and new trade policies made Indian exports more competitive globally.
  • Reduce  Tariff Barriers: Trade liberalisation through reduced import tariffs and dismantling non-tariff barriers.

As Prime Minister (2004-2014)

• Continuation of FDI Policies: The government liberalized FDI norms further, allowing higher foreign equity in sectors like retail, aviation, and insurance.
  • Multi-brand retail received approval for 51% FDI, while single-brand retail was permitted up to 100%.
• Special Economic Zones (SEZs): His government enacted the SEZ Act (2005) to attract investment, promote exports, and create employment by establishing special industrial hubs with tax incentives.
• Public-Private Partnerships (PPPs): The government promoted PPPs to modernize infrastructure and enhance industrial growth, particularly in highways, airports, and power projects.
• Manufacturing Sector Focus: Policies were aimed at revitalizing the manufacturing sector, including the National Manufacturing Policy (2011), which aimed to increase the sector’s share in GDP and create millions of jobs.
• Skill Development and Technology Upgradation: The government encouraged skill development initiatives and provided incentives for adopting advanced technology in industries to improve competitiveness.
• Indo-US Nuclear Deal (2008): The Indo-US Nuclear Deal in 2008 ended India’s nuclear isolation and allowed civilian nuclear energy cooperation with the United States.
• Global Financial Crisis 2008: Shielded India during the 2008 global financial crisis through prudent economic policies.

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Major Acts Passed

• Right to Information (RTI) Act, 2005:
  • Enacted in June 2005, this act empowered citizens to access information under the control of public authorities.
  • Obligated public authorities to maintain records in a manner that facilitated access.
  • Provided mechanisms for appeals and exemptions for sensitive information.
• Right to Education (RTE) Act, 2009:
  • Guaranteed free and compulsory education for children aged 6-14, significantly reducing dropout rates.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005:
  • Provided 100 days of guaranteed wage employment annually to rural households, reducing poverty and unemployment.
• Aadhar (Unique Identification):
  • Introduced to improve welfare delivery and financial inclusion by providing unique identity numbers to citizens.

Key Principles of Foreign Policy

• Economic Diplomacy:
  • Focused on leveraging economic growth to strengthen India’s global position.
  • Prioritized trade and investment partnerships to complement domestic economic reforms.
• Strategic Partnerships:
  • Emphasized building long-term strategic partnerships with major global powers like the United States, Russia, China, and the European Union.
  • Advocated for a multipolar world order where India played a significant role.
• Balancing Regional Relations:
  • Adopted a pragmatic approach in engaging with neighboring countries to maintain stability in South Asia.
  • Sought to address security concerns while promoting regional cooperation.

Notable Foreign Policy Achievements

• US-India Relations:
  • US-India Civil Nuclear Agreement (2008):
    • This landmark deal ended India’s nuclear isolation, allowing civilian nuclear trade while ensuring India’s non-proliferation commitments.
    • It enabled India to secure uranium supplies from countries like Canada and Australia, critical for its energy security.
  • Economic Collaboration:
    • Bilateral trade grew fivefold, from $20 billion in 2000 to over $132 billion in 2015.
    • Defense trade saw a boost, with India purchasing advanced systems like the C-130J Hercules aircraft.
• Improved Ties with China:
  • Engaged in economic cooperation despite boundary disputes.
  • Strengthened trade ties, with China becoming one of India’s largest trading partners during his tenure.
    • His efforts led to the establishment of mechanisms like the Strategic Economic Dialogue to address trade imbalances.
• Strengthening Indo-Russian Relations:
  • Reinforced defense ties, with over 70% of Indian military hardware sourced from Russia during this period.
  • Agreements for constructing nuclear power plants, such as the Kudankulam Nuclear Power Plant, highlighted the energy partnership.
• Regional Cooperation in South Asia:
  • Advocated for improved relations with Pakistan, including initiatives for confidence-building measures post-26/11 Mumbai attacks.
  • Strengthened India’s role in SAARC (South Asian Association for Regional Cooperation) to promote regional economic integration.
• India’s Role in Global Institutions:
  • Advocated for India’s permanent membership in the United Nations Security Council (UNSC).
  • Played a proactive role in forums like G20, BRICS, and IBSA (India-Brazil-South Africa) to highlight India’s stance on global economic and geopolitical issues.
  • At the Copenhagen Climate Summit (2009), he highlighted India’s commitment to sustainable development while ensuring the protection of national interests.
• Engagement with Africa and Latin America:
  • Strengthened ties with African nations through initiatives like the India-Africa Forum Summit.
    • India hosted the India-Africa Forum Summit (2008), where India extended a $5 billion credit line to African nations for infrastructure development.
  • Enhanced trade and investment with Latin American countries, focusing on energy and natural resources.
• Look East Policy:
  • Strengthened relationships with ASEAN countries under the Look East Policy, promoting trade and security cooperation.
  • Played a key role in the creation of India-ASEAN Free Trade Agreements in goods and services.
  • India became a founding member of the East Asia Summit in 2005, signaling its deeper integration into the Asia-Pacific region.

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Effect of Reforms on the Indian Economy

• Growth Rate of National Income: The national income growth rate increased from 5% in 1990-91 to about 9.3% in 2007-08 and 8.2% in 2023-24.
• Composition of National Income: The share of agriculture declined, while the share of industry and the service sector increased.
  • In 1990-91, the manufacturing sector contributed 26% of GDP, which grew to 30% of Gross Value Added (GVA) by FY 2024.
  • The service sector’s contribution increased from 44% in 1991-92 to over 50% by FY 2024.
• Savings and Investments: Gross domestic savings increased from 23% in 1990-91 to 31% in 2015-16.
  • The rate of investment, measured as gross domestic capital formation, increased from 26% in 1990-91 to 31% in 2015-16 and 30.2% in FY 2023.
• Foreign Trade: The export sector became a significant contributor to national income and a major earner of foreign exchange.
• Foreign Exchange Reserves: The balance of payments improved significantly, leading to a rapid increase in foreign exchange reserves from $1.1 billion in June 1991 to an all-time high of $681.69 billion in August 2024.
• Foreign Direct Investment (FDI): India allowed 100% FDI in most sectors except for a few such as lottery, chit funds, and atomic energy.
  • FDI inflow rose from $1.3 billion in 1990-91 to $70.97 billion in FY 2022-23.
  • Foreign institutional investors were permitted to invest in Indian capital markets subject to regulations.

Lessons Learned from Dr. Manmohan Singh

• Humility and Active Listening: Dr. Singh’s ability to listen, even to criticism, created space for meaningful exchanges and diverse perspectives.
• Integrity and Ethical Leadership: He maintained impeccable honesty throughout his career, never using his position for personal gain.
• Visionary Leadership with Pragmatism: He combined long-term vision with political pragmatism, initiating reforms while managing coalition politics.
  • As Finance Minister, he initiated the 1991 economic reforms. As Prime Minister, he introduced landmark legislation like the Right to Information Act and the National Food Security Act.
  • He laid the groundwork for the Goods and Services Tax (GST), which was later implemented by a subsequent government.
• Grace Under Criticism: He welcomed criticism as constructive feedback rather than hostility, often reflecting on it to improve governance.
  • Publicly acknowledged criticism at a 2012 panel discussion and used it to drive changes in the Finance Ministry.
• Curiosity and Collaborative Approach: Singh’s openness to learning and collaborating attracted the best minds to his team, fostering innovation and progress.
  • Worked with experts like Montek Singh Ahluwalia and Nandan Nilekani to implement transformative policies.
• Legacy of Humility: Singh refrained from self-promotion, believing history would judge his contributions.
  • Declined to write his memoirs, emphasizing service over personal glorification.

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Conclusion

Manmohan Singh’s leadership transformed India into a global economic power and redefined governance by balancing welfare and market reforms. He is credited as the architect of modern India’s economic policies and for navigating India through challenging times like the 1991 economic crisis and the 2008 financial meltdown.

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