1991: Unshackling the economy

A comatose economy and a deep fiscal crisis. It was a mountain to climb for the Cambridge-educated former bureaucrat Manmohan Singh, when he rose to present India's Budget on July 24, 1991. Consider this. India's debt amounted to Rs 182,000 crore and the government was paying every second rupee it earned towards interest (Rs 27,000 crore). Inflation was in double digits and the cash crunch severe. Worse, forex reserves were barely enough for three weeks of essential imports and India appeared weeks away from defaulting on its external obligations.

Internally, the licence raj and a bloated bureaucracy was stifling India's economic growth. Singh, though, was equal to the task. The P.V. Narasimha Rao government ended the licence raj, abolished industrial licensing in all but 18 industries and allowed companies to expand without government permission. The policies did not signal total decontrol but there was a tectonic shift from the Nehruvian policy of dependence on the public sector. Singh's landmark Budget coupled with the 20 per cent devaluation of the rupee set the Indian economy on the path to recovery and a fast pace of growth over the next two decades.

Power to them
Electricity boards, or state-run generation and distribution utilities, were broke and in no position to expand. The government allowed private players in generation sweetening the deal with an assured return. Bad decision (remember Enron?). Years later, lessons learnt, the focus shifted to distribution - helping in part raise capacity 2.5 times to 167,000 MW today, 33,183 MW of which is private-run. Still, large parts of India remain unlit prompting experiments with microgeneration networks and off-grid power.

The chosen one
As Ratan Tata was named to step into the big shoes of his uncle J.R.D. Tata, the choice drew brickbats from within and outside Bombay House. Many said he was chosen the Tata group Chairman only because of his surname. Over time, he has made his critics eat humble pie. When he took over, the Tata group had 1.19 lakh employees and revenues of Rs 30,920 crore. Today, as he prepares to hang up his boots, its employee base has swelled to 3.21 lakh, revenues stand at Rs 293,562 crore and the Tata group can rightfully call itself the first Indian MNC.

Did you know?
India allows 51 per cent FDI in auto manufacturing. GM, Ford and Hyundai were among the global majors which set up factories here. Today, India-made cars sell in Europe and Africa. Next stop: the United States.

Quote of the year Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome. Manmohan Singh, in his Budget speech