Manmohan Singh: From putting India on path to liberalisation as Finance Min to continuing reform journey as PM

Manmohan Singh will first and foremost be remembered for the momentous reforms of 1991 that unshackled the Indian economy. More followed over his five-year tenure as finance minister and then a decade as prime minister. A look at some of the key economic and policy changes under his watch:

FM Manmohan (1991-1996)
1991-92

• Rupee is devalued in two stages
• Industrial delicensing and several MRTP Act sections are repealed, allowing greater freedom to cos to expand existing capacity or to set up new units
• A dual exchange rate system called Liberalised Exchange Rate Management System (LERMS) was introduced. This was the initial step to enable a transition to a market determined exchange rate system
• Banking sector reforms suggested; allowed to charge interest rates above a prescribed floor
• Interest rate freedom (subject to a floor) for term lending institutions; curbs on debentures lifted
• FDI allowed in certain sectors with conditions. FIPB set up
• Select PSU divestment up to 20% allowed; sick PSUs to be referred to BIFR
• Sebi gets full statutory powers; CCI abolished; Mutual fund industry opened to the private sector Quantitative curbs on imports abolished NRIs allowed to invest in housing infra, real estate development (non-repatriable basis); FERA curbs for buying residential property removed

1993:
Unified exchange rate; RBI issues licences to 10 private sector banks


1993-94:
Five-year tax holiday offered under section 10A of the I-T Act to units set up in software tech parks and electronics hardware tech parks

1994:
Rupee is made convertible on the current account. National Telecom Policy opens up basic telecom services to private competition. NSE is set up. Nationalised banks are allowed to tap the capital market to strengthen their capital base

1995: Banks allowed to fix their own interest rates on domestic term deposits

PM Manmohan (2004-2014): Reform Journey Continues
2004-05:
74% FDI in telecom, 49% in civil aviation, FII investment ceiling in debt funds raised to $1,75 billion, intention to align tariff structure to ASEAN levels, service tax ambit widened
Right to Information Act passed

2005-06:
NREGA, Bharat Nirman launched
RBI Act amended to allow leeway to conduct monetary policy, various social sector schemes announced, capital market reforms deepened, peak customs rate for non-farm products cut from 20 to 15%, customs duty on crude cut from 19% to 5%

2006-07:
Plan to award 5 ultra mega power plants, FII investment cap in gilts raised to $2 billion, corporate debt ceiling hiked to $1.5 billion, MF ceiling in overseas instrument raised from $1 billion to $2 billion, peak customs rate for non-farm products cut to 12.5%, GST proposal announced

2008:
Deal signed with US, ending India’s nuclear isolation. Nuclear Suppliers’ Group grants waiver to India on September 6, 2008, allowing it to access civilian nuclear technology and fuel from other countries

2009:
Right to Education Act introduced

2010:
First Aadhaar number issued on Sep 29, 2010