24 July 1991 is the date on which the state of the Indian economy is facing a crisis. The General Budget presented by the then Finance Minister Dr. Manmohan Singh laid the foundation for the newly opened economy in India. After this, India became the largest market in the world. This year’s budget is nothing short of a lifeline for the economy. Exactly thirty years later, a lot has changed.
The country is now in the hands of Prime Minister Narendra Modi, but the state of the economy is battered by Corona. Policy makers are hopeful that Prime Minister Narendra Modi can exploit a situation such as the recession created by Kovid to initiate economic reforms such as 1991. However, all of this is not easy.
Ability to make bold decisions: This is not to say that Prime Minister Narendra Modi is afraid of bold decisions or that he has no political backing. It is true that Narendra Modi’s popularity is unmatched. At the same time, the numbers at home are strong. But unlike the Modi government and the bureaucracy at the Center in 1991, it is difficult to develop consensus behind liberalization reforms. Thirty years ago, the crisis received global support through international organizations such as the International Monetary Fund and the United Nations. Through the Washington Consensus, countries were encouraged to adopt liberal development strategies. India also benefited.
There are many changes: However, a lot has changed now. For example, some economists disagree with the need to liberalize India’s land and labor. At the same time, whether it be the implementation of tax reforms or the privatization of banks and government companies, these issues are not very effective. Most research is focused on which government interventions are most effective. Moreover, the bureaucratic system is not working as it was before. For example, only a quarter of the bills introduced in parliament during PM Modi’s first term were referred to expert committees. This is less than the 71 percent and 60 percent of the previous two governments. This has dropped to 10 per cent during PM Modi’s current tenure.
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In his July 1991 budget speech announcing liberalization, Manmohan Singh defined Victor Hugo (French poet). He said, ‘No power on earth can stop the thought of whose time has come.’ However, thoughts can only come into existence in a conducive environment to nurture them. If India is not prepared for this environment, the prospects for real economic reforms are difficult.