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Manmohan Singh: India was on the verge of bankruptcy, how did Dr. Manmohan Singh save the economy from sinking?

  New Delhi: The beginning of the 1990s was nothing short of a nightmare for India. The doors of foreign investment have been closed. 'Inspector Raj' had made it difficult to open industries. The economy was on the verge of collapse. At that time, Dr. Manmohan Singh came forward as a crisis solver. His policies not only saved India from bankruptcy, but also enabled it to be included in the top five economies of the world after three decades.

What was the problem of the Indian economy?

Before 1990, there was a license permit raj. This means that the government used to decide everything that which goods would be manufactured, how much would be produced, how many people would work to make it and what would be its price. This permit raj never allowed an investment environment to arise in the country.

Due to this, the burden on the government treasury increased and the situation reached the point of bankruptcy. At that time, India had to mortgage its gold abroad to meet its essential expenses. India had so much foreign exchange reserves that it could meet only two weeks of import expenses.

How did Manmohan Singh manage the economy?

At that time, Narasimha Rao's government was at the center, who was counted among the most resolved leaders of the country. Manmohan Singh was given the responsibility of the Finance Ministry. The reason for this was also very specific. At that time, India's credibility had fallen. No major international was ready to give us a loan.

Rao made Manmohan Singh the Finance Minister so that he could easily get loans from international banks. Also, Manmohan Singh had previously worked with the government as an economic advisor. He had also been the Governor of RBI, so he had good knowledge of economic policies.

The face of the country changed in the 1991 budget

That day was July 24, 1991, Manmohan Singh's first budget as Finance Minister. Normally it takes three months to prepare the budget, but since the budget was being presented after the Lok Sabha elections, Manmohan Singh got only one month. He did a miracle in this month.

He abolished the license permit raj in the budget. The closed economy opened up, domestic private companies came, foreign companies also came. This brought money into the system and companies started flourishing. Crores of new jobs were created. Crores of people rose above the poverty line for the first time.
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