Dr. Manmohan Singh, the RBI Governor, Union Finance Minister, and two-time Prime Minister, died at the age of 92 on Thursday, December 26. Dr. Manmohan Singh, India's Prime Minister from 2004 to 2014 and Finance Minister from 1991 to 1996, is largely regarded as the architect of the country's economic reform. Manmohan Singh's initiatives altered the Indian economy, transitioning it to a market-driven paradigm and integrating it into the global economy. Here are five important reforms that shaped his career and legacy.
1. Abolition of the License Raj
One of Manmohan Singh's most important reforms was the elimination of the Licence Raj, a complex system of permissions and rules that hampered private enterprise and economic growth. This change was critical during the 1991 economic crisis, when India faced serious balance-of-payments concerns. Manmohan Singh's decision to lift these regulations provided greater freedom in company operations, boosting entrepreneurship and attracting international investment. He pointed out: "We were importing significantly more than we were exporting, and our foreign exchange reserves were critically low."
2. Trade liberalization and import tariff reduction
Manmohan Singh's initiatives included significant reductions in import duties, which improved commerce and increased access to foreign goods for Indian consumers. By lowering tariffs from more than 300% to about 50%, De. Manmohan Singh opened up the Indian market to global competition. This approach benefitted consumers by lowering prices while also encouraging domestic industries to develop and improve their products. The implementation of these reforms represented a substantial shift towards a more open economy.
3. Encouragement of Foreign Direct Investment (FDI)
Foreign direct investment in India increased dramatically under Manmohan Singh's leadership. His government introduced laws that relaxed FDI prohibitions in a variety of industries, including telecommunications, insurance, and retail. This flood of foreign cash boosted economic growth while also creating jobs and improving infrastructure. Manmohan Singh's attitude to FDI was essential in making India an appealing location for international investors.
4. Taxation Reforms
Dr. Manmohan Singh implemented significant tax reforms aimed at expanding the tax base and simplifying the tax structure. He increased the income tax exemption level while decreasing the number of tax slabs from four to three, making compliance easier for taxpayers.
5. The National Food Security Act
Dr. Manmohan Singh championed social welfare policies during his tenure as Prime Minister, including the National Food Security Act (NFSA) of 2013. This landmark legislation aims to give subsidised food grains to roughly two-thirds of India's population, making food security a fundamental right for residents. The NFSA was a key step towards alleviating hunger and malnutrition in India, demonstrating Singh's dedication to both social equality and economic progress.
