The man who pioneered India's liberalisation, returns to take charge of the country
India's Prime Minister-designate Manmohan Singh was born in Gah, West Punjab (now in Pakistan), on September 26, 1932, to Gurmukh Singh and Krishna Kaur. One of 10 children, he graduated from Amritsar's Hindu College and did his M A and D Phil from Oxford. He was conferred a D Lit (Honoris Causa) by Assam University.He is married to Gursharan Kaur, they have three daughters.
An academic, he started his career from Punjab University, going on to become professor of international trade at Delhi University's prestigious Delhi School of Economics (D-School). Inducted into the government as an advisor to the finance ministry in the late '70s, Singh spent much of his career as a bureaucrat. He became principal economic advisor to the finance ministry and went on to become a director and then the governor of the Reserve Bank of India from 1982 to 1985 before being inducted into politics and, finally, into Narasimha Rao's Congress government as finance minister in 1991.
As finance minister in Rao's government in the '90s, Manmohan Singh was responsible for the reforms that liberalised India's economy. He ended the licence-permit raj, which changed fundamentally, the way corporate India was used to thinking and, with it, the lives of millions of middle class Indians.
When Singh became finance minister, India's economy was in shambles, with an unsustainable fiscal deficit close to 8.5 per cent of the gross domestic product (GDP) - almost double what it is at present - a huge balance of payments deficit and foreign currency reserves at a perilously low $1 billion, roughly equal to two weeks' imports. The country was on the verge of bankruptcy.
Singh slowly started the process of restructuring the economy. The only condition he put before Prime Minister Narasimha Rao was that India needed a strong vision to take it forward, and that he needed a reasonably free hand with the minimum interference. Rao backed Singh's vision all the way, and India embarked on a path of reforms.
Singh saw the crisis as an opportunity, to build a new India and to do things, which ought to have been done much earlier, but, somehow, never were. By 1994, when he presented his historic budget, the economy was well on its way to recovery. As a result nearly 10 million new jobs were created, an environment of liberalisation was set in motion, new sunrise sectors opened up to entrepreneurs and the foundation of an IT and telecom revolution was laid
But he wasn't satisfied with a mere turnaround and moved ahead, instituting deep structural changes in the institutions of the country. Under Singh, that year, the government of India entered into an understanding with the Reserve Bank of India to deny itself the right to 'draw' on the RBI to fund its deficit. This put paid to the unlimited monetisation of the fiscal deficit - a historic step.
Most remarkable was his ability in the midst of an unprecedented crisis to think 'out-of-the-box' rather than just 'tighten the belt'. Singh's reforms were somewhat removed from the usual, radical World Bank / IMF prescriptions which, in many third world countries, have led to dramatic increases in misery following rampant unemployment. He chose an alternative path; of stabilisation plus a credible structural adjustment programme that shortened the period of hardship and released the innovative and entrepreneurial spirit.
Consequently, the economy grew at a much faster pace. During his speech in parliament while presenting his maiden budget speech on July 24,1991, he quoted Victor Hugo: "No power on earth can stop an idea whose time has come."
Singh also started the process of simplification and rationalisation of the tax system. Many controls and regulations on industry were removed, which meant the decline of the permit raj and a freer rein to entrepreneurs. Productivity in Indian industry grew like never before.
After the Congress was voted out of power in 1996 Singh was out of office and kept a low profile, though he was the leader of the opposition in the Rajya Sabha. Always a quiet, unassuming personality, Singh faded into the background, except when his name began to be quoted - even as early as during the 1999 general election - as a possible alternative for the position of the prime minister in case the Italian-born Sonia Gandhi was unacceptable to the Indian people or was unwilling to take the top job. He contested for the Lok Sabha in 1999 from Delhi, but lost.
Singh himself has never said a word about his ambitions or aspirations and has been a loyal supporter of the Gandhi family. Even on matters political, Singh has always remained quiet - both as finance minister and when out of power. In the last two years though, he has ventured to comment on the budget. Singh attacked last year's budget (2003-04), presented by the BJP's Jaswant Singh, as a budget of 'tokenisms', which refused to address the basic problems facing the economy in terms of eradication of poverty, infrastructure development, agriculture development and fiscal consolidation.
Singh now faces a very different India from what he inherited about 13 years ago. The economy is sizzling, having posted a robust growth in the last two quarters. There is also a national consensus on the need for economic reforms, liberalisation and corporate-friendly policies.
Since being out of power, he has never really elucidated on his vision of how to take India ahead. But
Dr Manmohan Singh is indisputably the 'father' of the country's reform process. He now returns as the chief executive of a resurgent India - probably the best man to carry forward his own legacy.