From Rupee devaluation to Mutual Funds: How Manmohan Singh opened India’s doors to the world

Manmohan Singh, the architect of India’s economic transformation and a two-time Prime Minister, has passed away at 91. Known for his calm demeanor and incisive vision, Singh’s legacy lies in the sweeping reforms he introduced in 1991 that opened India to the world, pulling the country back from the brink of economic collapse.

Faced with a dire financial crisis in 1991, Singh, then Finance Minister, introduced the New Economic Policy under Prime Minister P.V. Narasimha Rao’s leadership. With foreign reserves barely covering two weeks of imports and inflation spiraling, Singh delivered a budget speech that changed India’s course forever. Quoting Victor Hugo, he said: “No power on earth can stop an idea whose time has come. India is now wide awake. We shall prevail. We shall overcome.”

The reforms dismantled the License Raj, removed import licensing, devalued the rupee, reduced tariffs, and abolished export subsidies. These measures stabilized India’s economy and kickstarted a period of liberalization, privatization, and globalization. Singh also enabled the partial convertibility of the rupee, attracting foreign investment and promoting exports.

The financial sector was transformed under Singh’s guidance. He opened the mutual fund industry to private and joint-sector participation, strengthened regulatory oversight through SEBI, and modernized banking by deregulating interest rates. Singh remarked, “For many investors, mutual funds are a more suitable investment vehicle than direct ownership of shares.”

Singh’s reforms extended to agriculture, where he reformed trade policies to reduce the bias against farming and, as Prime Minister, initiated loan waivers amounting to ₹65,000 crore in 2009. He also made it easier for farmers to access credit.

As Prime Minister from 2004 to 2014, Singh championed infrastructure modernization, continuing the Golden Quadrilateral highway project and expanding IITs. His government introduced landmark welfare initiatives, including MNREGA, the Right to Education Act, and the National Food Security Act. Aadhaar, a biometric identity program, streamlined welfare delivery and revolutionized governance.

However, Singh’s tenure as Prime Minister was also marked by challenges. Corruption scandals and rising inflation drew criticism, prompting him to say in 2014: “I honestly believe that history will be kinder to me than the contemporary media or the Opposition in Parliament.”