Manmohan Singh Passes Away: RBI Governor, Union Finance Minister, and two time Prime Minister Dr. Manmohan Singh passed away at the age of 92 on Thursday, 26 December.
Dr Manmohan Singh, who served as India’s Prime Minister from 2004 to 2014 and as Finance Minister from 1991 to 1996, is widely regarded as the architect of India’s economic liberalisation.
Manmohan Singh’s policies transformed the Indian economy, steering it towards a market-driven model and integrating it into the global economy. Here are five major reforms that defined his tenure and legacy.
1. Abolition of the Licence Raj
One of Manmohan Singh‘s most significant reforms was the dismantling of the Licence Raj, a complex system of permits and regulations that stifled private enterprise and economic growth.
This reform was crucial during the economic crisis of 1991 when India faced severe balance of payments issues. Manmohan Singh’s decision to abolish these restrictions allowed for greater freedom in business operations, encouraging entrepreneurship and attracting foreign investment.
As he noted, “We were importing significantly more than we were exporting, and our foreign exchange reserves were critically low.”
2. Trade Liberalisation and Import Tariff Reduction
Manmohan Singh’s policies included substantial reductions in import tariffs, which facilitated trade and made foreign goods more accessible to Indian consumers.
By slashing tariffs from over 300% to around 50%, De. Manmohan Singh opened up the Indian market to global competition. This move not only benefited consumers through lower prices but also stimulated domestic industries to innovate and improve their products.
The introduction of these measures marked a significant shift towards a more open economy.
3. Encouragement of Foreign Direct Investment (FDI)
Under Manmohan Singh’s leadership, India saw a remarkable increase in foreign direct investment. His government implemented policies that eased restrictions on FDI across various sectors, including telecommunications, insurance, and retail.
This influx of foreign capital not only bolstered economic growth but also created jobs and improved infrastructure. Manmohan Singh’s approach to FDI was instrumental in positioning India as an attractive destination for international investors.
4. Tax Reforms
Dr Manmohan Singh introduced comprehensive tax reforms aimed at broadening the tax base and simplifying the tax structure. He raised the income tax exemption limit while reducing the number of tax slabs from four to three, which made compliance easier for taxpayers.
Additionally, Manmohan Singh lowered the maximum marginal rate of personal income tax from 56% to 40%. These reforms improved revenue generation for the government while fostering a more conducive environment for economic activity.
5. National Food Security Act
During his tenure as Prime Minister, Dr. Manmohan Singh championed social welfare initiatives, including the National Food Security Act (NFSA) in 2013. This landmark legislation aimed to provide subsidised food grains to nearly two-thirds of India’s population, ensuring that food security became a fundamental right for citizens.
The NFSA represented a significant step towards addressing hunger and malnutrition in India, highlighting Singh’s commitment to social equity alongside economic growth.
