• Latest
  • Trending
Narasimha Rao and Manmohan Singh

How Narasimha Rao and Manmohan Singh rescued India in 1991 and made history

March 10, 2022
Central Bank of Sri Lanka

Central Bank of Sri Lanka raises rates to 21-year high to contain inflation

July 7, 2022
Sri Lankans facing food insecurity

More than 6 million Sri Lankans facing food insecurity: United Nations

July 7, 2022
Electricity

Power cut schedule for July 7 in Sri Lanka

July 7, 2022
Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

July 7, 2022
India to Supply Fuel to Sri Lanka Only After Advance Payment

India to Supply Fuel to Sri Lanka Only After Advance Payment

July 6, 2022
Sri Lanka offers special port facilities to Bangladeshi vessels

Sri Lanka offers special port facilities to Bangladeshi vessels

July 6, 2022
India top lender to Sri Lanka in 2022 so far, displacing China

India top lender to Sri Lanka in 2022 so far, displacing China

July 6, 2022
Central banks are increasingly keen on the yuan, according to a new survey. Lucas Schifres/Getty Images

China’s yuan is making headway a global reserve currency, with 85% of central banks keen on holding the asset

July 6, 2022
Zimbabwe’s central bank said it would start selling gold coins

Zimbabwe to introduce gold coins as local currency tumbles

July 6, 2022
Two ships docked at Colombo Port begin unloading fuel

India to supply fuel to Sri Lanka only after advance payment

July 6, 2022
Ranil-Wickremesinghe Sri Lankan PM

I can turn around Sri Lanka’s economy: PM Ranil Wickremesinghe

July 6, 2022
Prime Minister Boris Johnson

UK PM Boris Johnson in crisis as top ministers quit

July 6, 2022
  • About Us
  • Advertisements
  • Privacy Policy
  • Contact
Thursday, July 7, 2022
No Result
View All Result
NewsIn.Asia
  • Home
  • Around South Asia
    • All
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
    Central Bank of Sri Lanka

    Central Bank of Sri Lanka raises rates to 21-year high to contain inflation

    Sri Lankans facing food insecurity

    More than 6 million Sri Lankans facing food insecurity: United Nations

    Electricity

    Power cut schedule for July 7 in Sri Lanka

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    India to Supply Fuel to Sri Lanka Only After Advance Payment

    India to Supply Fuel to Sri Lanka Only After Advance Payment

    Sri Lanka offers special port facilities to Bangladeshi vessels

    Sri Lanka offers special port facilities to Bangladeshi vessels

    India top lender to Sri Lanka in 2022 so far, displacing China

    India top lender to Sri Lanka in 2022 so far, displacing China

    Central banks are increasingly keen on the yuan, according to a new survey. Lucas Schifres/Getty Images

    China’s yuan is making headway a global reserve currency, with 85% of central banks keen on holding the asset

    Two ships docked at Colombo Port begin unloading fuel

    India to supply fuel to Sri Lanka only after advance payment

  • World
    • All
    • Japan
    • Russia
    • United Kingdom
    • United States
    Sri Lankans facing food insecurity

    More than 6 million Sri Lankans facing food insecurity: United Nations

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    Central banks are increasingly keen on the yuan, according to a new survey. Lucas Schifres/Getty Images

    China’s yuan is making headway a global reserve currency, with 85% of central banks keen on holding the asset

    Zimbabwe’s central bank said it would start selling gold coins

    Zimbabwe to introduce gold coins as local currency tumbles

    Prime Minister Boris Johnson

    UK PM Boris Johnson in crisis as top ministers quit

    Rain. Image credits - Max Bender @maxwbender / Unsplash

    Why Australia is battling floods again

    The highest paying jobs without a degree in 2022

    The highest paying jobs without a degree in 2022

    Pomegranate Juice

    Fifteen health benefits of pomegranate juice

    Queen Elizabeth

    Five ways the monarchy has benefited from colonialism and slavery

  • Business
  • Politics
  • Sports
  • Entertainment
    • All
    • Books
    • Gaming
    • Movie
    • Music
    • Series
    Kamal Haasan's Vikram is on a rampage.

    Kamal Haasan’s Vikram is the highest-grossing film in Singapore, UK and UAE

    Harry Potter and the Philosopher's Stone

    ‘Harry Potter and the Philosopher’s Stone’ celebrates 25 magical years

    Salman Khan

    Plot to kill Bollywood actor Salman Khan revealed

    Shah Rukh Khan's Jawaan, to be directed by Atlee, to scheduled for June 2023 release. (Photo: Twitter)

    Shah Rukh Khan announces new film ‘Jawaan’

    Chchutir diner Gaan by Bangladeshi singer Nondita

    Chchutir diner Gaan by Bangladeshi singer Nondita

    Song “Bechain Nazar Betaab Jigar”. Talat Mahmood. Film “Yasmin” 1955

    Song “Bechain Nazar Betaab Jigar”. Talat Mahmood. Film “Yasmin” 1955

    ‘KGF Chapter 2’

    ‘KGF Chapter 2’ becomes 3rd-highest-grossing Hindi film

    Popular Bollywood stars Ranbir Kapoor and Alia Bhatt were married Thursday in a private ceremony at their Mumbai residence. Image credits - Sujit Jaswal via AFP / Getty Images

    Bollywood stars Ranbir Kapoor and Alia Bhatt marry in Mumbai

    Lata Mangeshkar: Ae Chand Pyara. Film Khazaana 1951. Music C.Ramchandra. Lyrics Rajinder Krishan

    Lata Mangeshkar: Ae Chand Pyara. Film Khazaana 1951. Music C.Ramchandra. Lyrics Rajinder Krishan

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Science
    • Travel
    Pomegranate Juice

    Fifteen health benefits of pomegranate juice

    This April 2022 handout photograph provided by RR Auction shows cockroaches which were fed moon dust from the 1969 Apollo 11 mission, which were pulled from an auction listing after NASA said the cockroaches and a small vial of moon dust are property of the federal government. (Photo: AP)

    Give us back our moon dust and cockroaches: Nasa

    Moon. Image credits - Ganapathy Kumar / Unsplash

    China finds signs of water in moon’s ‘Ocean of Storms’

    What we should know when we speak of food security?

    What we should know when we speak of food security?

    Beetroot is rich in nitrates and is loaded with health benefits. (Photo: Getty Images)

    Drinking beetroot juice daily could help people with heart condition

    Close-up view of a cancer cell. Credit: Alexey Kotelnikov / Alamy Stock Photo

    Massive breakthrough as cancer vanishes for all patients in drug trial

    India hands over 3.3 tons of medical supplies to Lanka’s ambulance service

    India hands over 3.3 tons of medical supplies to Lanka’s ambulance service

    Lankan Prez orders LKR 1.8 billion (US$ 5 million) to be spent on drugs import  

    Lankan Prez orders LKR 1.8 billion (US$ 5 million) to be spent on drugs import  

    In this 1971 Center For Disease Control handout photo, monkeypox-like lesions are shown on the arm and leg of a female child in Bondua, Liberia. CDC | Getty Images

    The Covid conspiracies being recycled for monkeypox

    Exercise. Image credits - Victor Freitas @victorfreitas / Unsplash

    Best exercise time differs for men and women, says US study

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Tech
    Bitcoin. Image credits - Onov3056

    Bitcoin slides below $20,000 to lowest level in 18 months

    Digital banking platform Revolut launches in Sri Lanka

    Digital banking platform Revolut launches in Sri Lanka

    Microsoft's Internet Explorer was first included with a Windows 95 upgrade pack. Image credits - Ina Fried/CNET

    End of an era: Microsoft retires Internet Explorer

    Cryptocurrency boom. Image credits - Executium @executium / Unsplash

    Cryptocurrency market value slumps under $1 trillion

    iPhone. Image credits - Tron Le @tronle_sg / Unsplash

    EU deal to force iPhones to use USB-C charger by 2024

    Whatsapp. Image credits - AARN GIRI / Unsplash

    WhatsApp to get edit button, undo messages and other features soon 

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
  • Coronavirus
  • Videos
  • Home
  • Around South Asia
    • All
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
    Central Bank of Sri Lanka

    Central Bank of Sri Lanka raises rates to 21-year high to contain inflation

    Sri Lankans facing food insecurity

    More than 6 million Sri Lankans facing food insecurity: United Nations

    Electricity

    Power cut schedule for July 7 in Sri Lanka

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    India to Supply Fuel to Sri Lanka Only After Advance Payment

    India to Supply Fuel to Sri Lanka Only After Advance Payment

    Sri Lanka offers special port facilities to Bangladeshi vessels

    Sri Lanka offers special port facilities to Bangladeshi vessels

    India top lender to Sri Lanka in 2022 so far, displacing China

    India top lender to Sri Lanka in 2022 so far, displacing China

    Central banks are increasingly keen on the yuan, according to a new survey. Lucas Schifres/Getty Images

    China’s yuan is making headway a global reserve currency, with 85% of central banks keen on holding the asset

    Two ships docked at Colombo Port begin unloading fuel

    India to supply fuel to Sri Lanka only after advance payment

  • World
    • All
    • Japan
    • Russia
    • United Kingdom
    • United States
    Sri Lankans facing food insecurity

    More than 6 million Sri Lankans facing food insecurity: United Nations

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

    Central banks are increasingly keen on the yuan, according to a new survey. Lucas Schifres/Getty Images

    China’s yuan is making headway a global reserve currency, with 85% of central banks keen on holding the asset

    Zimbabwe’s central bank said it would start selling gold coins

    Zimbabwe to introduce gold coins as local currency tumbles

    Prime Minister Boris Johnson

    UK PM Boris Johnson in crisis as top ministers quit

    Rain. Image credits - Max Bender @maxwbender / Unsplash

    Why Australia is battling floods again

    The highest paying jobs without a degree in 2022

    The highest paying jobs without a degree in 2022

    Pomegranate Juice

    Fifteen health benefits of pomegranate juice

    Queen Elizabeth

    Five ways the monarchy has benefited from colonialism and slavery

  • Business
  • Politics
  • Sports
  • Entertainment
    • All
    • Books
    • Gaming
    • Movie
    • Music
    • Series
    Kamal Haasan's Vikram is on a rampage.

    Kamal Haasan’s Vikram is the highest-grossing film in Singapore, UK and UAE

    Harry Potter and the Philosopher's Stone

    ‘Harry Potter and the Philosopher’s Stone’ celebrates 25 magical years

    Salman Khan

    Plot to kill Bollywood actor Salman Khan revealed

    Shah Rukh Khan's Jawaan, to be directed by Atlee, to scheduled for June 2023 release. (Photo: Twitter)

    Shah Rukh Khan announces new film ‘Jawaan’

    Chchutir diner Gaan by Bangladeshi singer Nondita

    Chchutir diner Gaan by Bangladeshi singer Nondita

    Song “Bechain Nazar Betaab Jigar”. Talat Mahmood. Film “Yasmin” 1955

    Song “Bechain Nazar Betaab Jigar”. Talat Mahmood. Film “Yasmin” 1955

    ‘KGF Chapter 2’

    ‘KGF Chapter 2’ becomes 3rd-highest-grossing Hindi film

    Popular Bollywood stars Ranbir Kapoor and Alia Bhatt were married Thursday in a private ceremony at their Mumbai residence. Image credits - Sujit Jaswal via AFP / Getty Images

    Bollywood stars Ranbir Kapoor and Alia Bhatt marry in Mumbai

    Lata Mangeshkar: Ae Chand Pyara. Film Khazaana 1951. Music C.Ramchandra. Lyrics Rajinder Krishan

    Lata Mangeshkar: Ae Chand Pyara. Film Khazaana 1951. Music C.Ramchandra. Lyrics Rajinder Krishan

  • Lifestyle
    • All
    • Fashion
    • Food
    • Health
    • Science
    • Travel
    Pomegranate Juice

    Fifteen health benefits of pomegranate juice

    This April 2022 handout photograph provided by RR Auction shows cockroaches which were fed moon dust from the 1969 Apollo 11 mission, which were pulled from an auction listing after NASA said the cockroaches and a small vial of moon dust are property of the federal government. (Photo: AP)

    Give us back our moon dust and cockroaches: Nasa

    Moon. Image credits - Ganapathy Kumar / Unsplash

    China finds signs of water in moon’s ‘Ocean of Storms’

    What we should know when we speak of food security?

    What we should know when we speak of food security?

    Beetroot is rich in nitrates and is loaded with health benefits. (Photo: Getty Images)

    Drinking beetroot juice daily could help people with heart condition

    Close-up view of a cancer cell. Credit: Alexey Kotelnikov / Alamy Stock Photo

    Massive breakthrough as cancer vanishes for all patients in drug trial

    India hands over 3.3 tons of medical supplies to Lanka’s ambulance service

    India hands over 3.3 tons of medical supplies to Lanka’s ambulance service

    Lankan Prez orders LKR 1.8 billion (US$ 5 million) to be spent on drugs import  

    Lankan Prez orders LKR 1.8 billion (US$ 5 million) to be spent on drugs import  

    In this 1971 Center For Disease Control handout photo, monkeypox-like lesions are shown on the arm and leg of a female child in Bondua, Liberia. CDC | Getty Images

    The Covid conspiracies being recycled for monkeypox

    Exercise. Image credits - Victor Freitas @victorfreitas / Unsplash

    Best exercise time differs for men and women, says US study

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Tech
    Bitcoin. Image credits - Onov3056

    Bitcoin slides below $20,000 to lowest level in 18 months

    Digital banking platform Revolut launches in Sri Lanka

    Digital banking platform Revolut launches in Sri Lanka

    Microsoft's Internet Explorer was first included with a Windows 95 upgrade pack. Image credits - Ina Fried/CNET

    End of an era: Microsoft retires Internet Explorer

    Cryptocurrency boom. Image credits - Executium @executium / Unsplash

    Cryptocurrency market value slumps under $1 trillion

    iPhone. Image credits - Tron Le @tronle_sg / Unsplash

    EU deal to force iPhones to use USB-C charger by 2024

    Whatsapp. Image credits - AARN GIRI / Unsplash

    WhatsApp to get edit button, undo messages and other features soon 

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
  • Coronavirus
  • Videos
NewsIn.Asia
No Result
View All Result
Home Around South Asia

How Narasimha Rao and Manmohan Singh rescued India in 1991 and made history

Editor by Editor
March 10, 2022
in Around South Asia, Business, Economy, India
Reading Time: 5 mins read
23 1
A A
Narasimha Rao and Manmohan Singh

Narasimha Rao and Manmohan Singh

24
SHARES
Share on WhatsApp

New Delhi, March 10 (ThePrint) – On 24 July 1991, finance minister Manmohan Singh presented his first ever budget, just a month after being sworn in the cabinet of prime minister P.V. Narasimha Rao. The government also unveiled a game-changing new industrial policy removing many roadblocks that hindered industries from flourishing.

But for both Rao and Singh, their initiation into the government was a trial by fire. No other government was faced with politically difficult decisions in the first few weeks of assuming power like theirs. 

Subscribe to our Telegram channel for the latest updates from around the world

ADVERTISEMENT

Exactly 30 years have passed since this historic event that helped India avert a major economic crisis and placed it on the high growth trajectory. ThePrint explains what led to the crisis and how India weathered it.

What was the 1991 crisis? 

In 1991, India faced its worst economic crisis and was on the brink of a sovereign default. The 1990-91 Gulf War had led to a sharp increase in oil prices and a fall in remittances from the Indian workers working overseas. This led to a sharp depletion in India’s forex reserves — at less than $6 billion, and this was just enough to meet around two weeks of the country’s imports.

READ: Gold prices hit new all-time high

The deteriorating fiscal deficit situation and burgeoning foreign debt levels did not help the government either. A fiscal deficit of 8 per cent of gross domestic product (GDP) and a current account deficit of 2.5 per cent of GDP all added to the government’s woes. Double-digit inflation numbers also added to the burden of the common man.

Immediate measures to mitigate the crisis

The immediate priority for the Rao government was to prevent a sovereign default — an ignominy that India had managed to avoid till then. It took two immediate measures. 

Devaluation of the rupee: The government, along with the Reserve Bank of India (RBI), undertook a two-step devaluation of the rupee, which was first devalued against major currencies by around 9 per cent on 1 July 1991, followed by another devaluation of 11 per cent two days later. This was done with the aim of making Indian exports more competitive.

Rao, known for his political astuteness, preferred to undertake the devaluation in two phases to make it more palatable to all stakeholders.

Pledging gold holdings to shore up forex reserves: The central bank pledged India’s gold holdings with the Bank of England in four tranches from 4-18 July 1991 raising around $400 million through this route.

Prior to this, in the midst of national elections, the State Bank of India sold 20 tonnes of gold on 16 May to the Union Bank of Switzerland or UBS to raise around $200 million.

The government had also got emergency loans from the International Monetary Fund in two tranches totalling around $2 billion earlier in the year.

Structural reforms

Trade policy: As part of its efforts to boost exports, the Indian government announced a new trade policy that sought to bring a change in the licensing process. It also linked non-essential imports to exports to discourage such imports. 

Taking into account the boost to exports from the massive devaluation of the rupee, the government did away with export subsidies. It introduced the concept of tradeable exim scrips granting such scrips to exporters for their use or for sale. Such scrips were calculated based on the value of exports. The policy also did away with the need for routing imports through state-owned firms. The private sector was allowed to make its own imports.

New industrial policy: The game-changing new industrial policy was unveiled on the eve of Budget 1991. It proposed some massive changes in the way India treated its industries and foreign investment by moving away from a licence raj regime.

The policy relaxed some of the provisions in Monopolies and Restrictive Trade Practices Act to facilitate easier entry and restructuring of businesses by facilitating mergers and amalgamations. The policy ended the public sector monopoly in many sectors and announced a policy of automatic approval for foreign direct investment up to 51 per cent as against the earlier cap of 40 per cent for foreign equity investments.

Public sector monopoly was restricted to only a few sectors important from the point of view of national security. It also abolished industrial licensing for all industries barring 18 irrespective of levels of investment.

All these changes made it easier to do business in India and saw a deluge of foreign goods and investments flooding the Indian market in the subsequent years.

Budget 1991-92: Presented by Manmohan Singh on 24 July, the budget was a continuation of the reform measures undertaken by the Indian government over the last few weeks. There were some difficult measures taken. 

Faced with a rising fiscal deficit, the budget increased corporate tax rates by 5 percentage points to 45 per cent and introduced the concept of tax deducted at source for some financial transactions like bank deposits.

It also increased the prices of cooking gas cylinders, fertilisers and petrol and removed the subsidy on sugar.

It opened up mutual funds to the private sector and relaxed rules for investment by non-residents.

A scheme for people to declare unaccounted wealth was also announced. People were given immunity from prosecution and from the levy of interest and penalty.

The reform push continued after budget: Over the next eight months, the government announced many steps to continue the reforms momentum and pull India out of the crisis. These included a second trade policy package to boost exports and a package for developing small firms.

The government also announced a committee under former RBI governor M. Narasimham for proposing financial sector reforms. This was followed by the constitution of another committee for recommending tax reforms under well-known public finance economist Raja Chelliah.

For similar articles, join our Telegram channel for the latest updates. – click here

Tags: India

Related Posts

Central Bank of Sri Lanka
Around South Asia

Central Bank of Sri Lanka raises rates to 21-year high to contain inflation

July 7, 2022
Sri Lankans facing food insecurity
Around South Asia

More than 6 million Sri Lankans facing food insecurity: United Nations

July 7, 2022
Electricity
Around South Asia

Power cut schedule for July 7 in Sri Lanka

July 7, 2022
Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East
Around South Asia

Economic Crisis Forces Sri Lanka to Shed Fears and Move Closer to US, Middle East

July 7, 2022
India to Supply Fuel to Sri Lanka Only After Advance Payment
Economy

India to Supply Fuel to Sri Lanka Only After Advance Payment

July 6, 2022
Sri Lanka offers special port facilities to Bangladeshi vessels
Bangladesh

Sri Lanka offers special port facilities to Bangladeshi vessels

July 6, 2022
  • Electricity

    Power cut schedule for July 7 in Sri Lanka

    45085 shares
    Share 18050 Tweet 11265
  • Foreign Exchange Rates from Central Bank of Sri Lanka; USD, GBP, EUR, SGD, CAD

    1186 shares
    Share 481 Tweet 294
  • WATCH : Yohani’s first live performance in India

    784 shares
    Share 326 Tweet 191
  • Power interruption schedule released: Check your area power cut time

    736 shares
    Share 314 Tweet 176
  • Leader of Bohra community meets President

    668 shares
    Share 271 Tweet 165
  • About Us
  • Advertisements
  • Privacy Policy
  • Contact

© 2022 All rights reserved.

No Result
View All Result
  • Home
  • Around South Asia
    • Afghanistan
    • Bangladesh
    • Bhutan
    • China
    • India
    • Maldives
    • Myanmar
    • Nepal
    • Pakistan
    • Sri Lanka
  • Around The World
  • Breaking News
  • Business
    • Exchange
  • Climate Change
  • Governance
    • Crime
    • Diplomacy
    • Defense
    • Human Rights
    • Politics
    • Strategic Affairs
  • Lifestyle
    • Books
    • Entertainment
      • Arts
      • Cinema
      • Gaming
      • Music
      • Movie
      • Series
      • TV
    • Health
    • Fashion
    • Food
    • Travel
  • Culture
    • Ethnicity
    • Gender
  • Development news
  • Economy
  • Education
  • Environment
  • Coronavirus
  • History
  • National
  • Offbeat
    • Media
    • Music and arts across South Asia
  • Recommended
    • Headlines
    • Highlights
    • Top Picture
    • Top Story
  • Religion
  • Science
  • Sports
    • Football
    • Cricket
      • LPL
      • IPL
    • Tennis
    • Formula 1
    • NBA
  • Tech
    • Instagram
  • United Nations
  • Weather
  • World
    • Japan
    • Russia
    • United States
  • Videos

© 2022 All rights reserved.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

mersin eskort -

Meritroyalbet

-
Jojobet
- Süperbetin - eskisehir escort -

https://www.vudols.com/

- Sağlık Personeli - istanbul avukat