A phone call on an unassuming night in June 1991 changed the course of India's economic history. Manmohan Singh, the then chairman of the University Grants Commission, was returning from a conference in the Netherlands and settling in for the night.
His nephew answered the phone. PM PV Narasimha Rao's closest aide PC Alexander was on the line with an unexpected call for Singh.
By June 21, Singh was in his UGC office, not knowing what lay ahead. An order came: go home, get ready, go to Rashtrapati Bhavan for the swearing-in ceremony. An economist with no political experience, Singh was an enigma. “Everyone was surprised to see me lining up to take oath as a new team member. My ministry was allocated later, but I was told directly by Narasimha Rao ji that I was going to be finance minister,” Singh recalled in Intensely Personal: Manmohan & Gursharan by his daughter Daman Singh.
The economy that Singh inherited was in free fall. Foreign exchange reserves have fallen to barely cover two weeks of imports. Inflation was in double digits and global banks had closed their doors to India. The challenge was enormous, but within days, Singh, with Rao's unwavering support, launched bold reforms that broke decades of economic stagnation.
On July 24, Singh presented a groundbreaking budget. Abolished the licensing state system that had stifled industry with excessive regulations. Industrial licenses were revoked in many sectors, foreign direct investment was accepted in 34 industries, and state monopolies began to dissolve. The rupee was devalued to boost exports, trade policy was eased, and fiscal discipline was enforced.
However, these reforms did not go unopposed. Among the most vocal critics was the Bombay Club, a group of industrialists who feared that liberalization would expose Indian businesses to greater foreign competition. This informal coalition continued to demand government protection through tariffs, subsidies and other safeguards. They argued that Indian industry was not ready to face the same conditions as the global giants.
Singh was unmoved by Rao. The reforms went ahead despite resistance, proving the Bombay society's fears unfounded. Liberalization unleashed India's entrepreneurial energy, transforming a controlled, low-growth economy into one of the fastest-growing major economies in the world.
“With inflation reaching double digits, the price situation poses a serious problem of immediate concern to our vast population,” Singh warned in his maiden Budget speech. But by stabilizing the economy and initiating structural reforms, he and Rao laid the foundations for the India we see today – a global economic powerhouse.