PV Narasimha Rao or Pamulaparti Venkata Narasimha Rao served because the prime minister of India between 1991 and 1996.
(Image: PTI)
PV Narasimha Rao’s tenure as prime minister was marked by vital measures that opened India to world markets, fostering a brand new period of financial growth
Former prime minister P V Narasimha Rao shall be honoured with the Bharat Ratna, Prime Minister Narendra Modi mentioned on Friday. He mentioned Rao’s visionary management was instrumental in making India economically superior and laid a strong basis for its prosperity and development. Know about India’s historic financial reforms of 1991 that have been undertaken beneath the prime ministership of Rao.
“Narasimha Rao Garu’s tenure as Prime Minister was marked by significant measures that opened India to global markets, fostering a new era of economic development,” Prime Minister Narendra Modi mentioned in a submit on X.
Delighted to share that our former Prime Minister, Shri PV Narasimha Rao Garu, shall be honoured with the Bharat Ratna.As a distinguished scholar and statesman, Narasimha Rao Garu served India extensively in numerous capacities. He is equally remembered for the work he did as… pic.twitter.com/lihdk2BzDU
— Narendra Modi (@narendramodi) February 9, 2024
Why Were The Economic Reforms Brought In 1991?
The financial reforms of 1991 have been triggered by the financial woes in the course of the interval, throughout which the nation confronted the steadiness of cost (BoP) disaster the place its foreign exchange reserves have been in a position to cowl solely 15 days of imports.
What Led To The BoP Crisis of 1991?
Fiscal Deficit: The nation’s fiscal deficit throughout 1990-91 reached as excessive as 8.4 per cent of GDP. The fiscal deficit is the distinction between the whole expenditure and income of the federal government. It is a sign of the whole borrowings which can be wanted by the federal government.
Gulf War I: In 1990-91, the home financial scenario was additional aggravated by the geopolitical disaster in West Asia. The costs of crude oil surged as a consequence of Iraq’s invasion of Kuwait.
High Inflation: India’s inflation in the course of the interval additionally rose sharply. It accelerated from 6.7 per cent to 16.7 per cent as a consequence of a speedy improve in cash provide, thus making the nation’s financial scenario worse.
The 1991 Reforms
In order to get the nation out of this deep financial mess of 1991, former prime minister Manmohan Singh, who was the then finance minister, launched India’s largest financial reforms beneath the prime ministership of P V Narasimha Rao. The historic reforms to open up the economic system have been based mostly on the LPG mannequin — liberalisation, privatisation, and globalisation.
Liberalisation: Under this, industrial Licence Raj was abolished. Only just a few hazardous industries, like chemical substances, now required a licence. Except for these, each different business may very well be arrange with none licence. Commercial banks have been allowed to resolve on rates of interest, and so on.
Privatisation: Under this, banking reforms have been introduced in. Markets have been de-regularised. Private sectors have been launched. PSU shares have been allowed to be bought to non-public entities.
Globalisation: Import duties have been diminished. The Indian rupee grew to become partly convertible. All capital and intermediate items have been launched from the import constraints checklist. The economic system was opened up for worldwide commerce and international funding.
