On July 24, 1991, Dr. Manmohan Singh stood before the Lok Sabha (India’s Parliament) to present his first budget as Finance Minister in the new Narasimha Rao government. This budget was crucial, as India was facing a huge financial crisis. Dr. Singh honored the late Rajiv Gandhi, saying, “His dream lives on; a strong, united, and technologically advanced India. I dedicate this budget to his inspiring memory.”
At that time, India was in serious trouble. The country had low foreign exchange reserves—just enough to cover about three weeks’ worth of imports. Inflation was rising fast, making life tough for many, especially the poor, and the fiscal deficit was higher than 8% of GDP. “Since December 1990, we have been on the edge of a crisis,” Singh warned.
In a lighter moment, Singh joked about how his long working hours made his wife unhappy. He then announced tax cuts on certain household items, hoping to ease the financial burden for families.
Dr. Singh emphasized the need for change in his budget speech. He stated, “We can’t keep living beyond our means. The situation requires action.” Singh announced bold reforms, including allowing foreign investments in Indian industries, reducing import restrictions, and modernizing tax policies to help boost exports.
He also wanted to improve the public sector, suggesting selling part of government-owned companies to bring about better management. Additionally, he planned to strengthen the banking system and support the growing software industry, which laid the groundwork for India’s IT boom.
Dr. Singh was mindful of social issues as well. “I will be tough on economic policies, but soft-hearted towards the people,” he promised. Though some members of his own party criticized his budget, Singh stood firm and defended his decisions.
The next day, he held a press conference to explain his choices. He described his budget as one with “a human face,” explaining that increases in prices for fuel and fertilizers would ultimately benefit the economy in the long run.
The reforms set in motion by this budget changed India’s economic path. Over the years, the country’s GDP, foreign exchange reserves, and foreign investment all grew significantly. India’s IT and software industries thrived, helping reshape how the world sees India today.
Ending his important speech, Singh reminded everyone that the choices made at this critical time would shape the future of the country. His vision and determination became a turning point in India’s history.
