Manmohan Singh Death: Former Prime Minister Dr. Manmohan Singh, considered the father of the country’s economic liberalization, passed away on Thursday (26 December). He breathed his last in AIIMS at the age of 92. The year 1991 is known as a turning point in the history of the Indian economy. This was the time when the country was facing a serious economic crisis, and the then Finance Minister Dr. Manmohan Singh had created history by taking a bold decision and pledging 44 tonnes of gold to the RBI to save India.
In fact, in 1991, India’s foreign exchange reserves were reduced to only 1.2 billion dollars. This stock was only enough for three weeks of imports. Due to the Gulf War, the prices of crude oil increased, which further increased the import pressure on India. India had taken huge loans from various international institutions, for which there was no foreign currency left to repay.
decision to pledge gold
The policies of the 1980s pushed India into debt and high fiscal deficit. The then Prime Minister P.V. Under the leadership of Narasimha Rao, Dr. Manmohan Singh took a bold decision as Finance Minister. India pledged 67 tonnes of gold in the international market. This gold was sent to Switzerland and the Bank of England.
Why was this decision important for the country
The purpose of mortgage was his big idea. Due to this, India got a loan of 600 million dollars. This money was used to repay foreign debts and maintain imports. Pledge of gold was considered a disgrace, because gold was a symbol of India’s economic prosperity and cultural pride. This decision also faced criticism among the public and politicians. Although it was a difficult step, it helped in stabilizing India’s economy.
Beginning of economic reforms
After pledging the gold, Dr. Manmohan Singh initiated the process of economic liberalization in 1991 to revive the Indian economy. Indian markets were opened to global investment and competition. License Raj was abolished. Foreign companies were allowed to enter the Indian market. Import-export rules were simplified. After which rapid growth was seen in India’s economy. India started being seen as an emerging global power.
Let us tell you that this decision of Dr. Manmohan Singh’s contribution establishes him as the father of India’s economic reforms. The move to pledge the gold was an important moment in the history of India. This was a bitter and bold decision which saved the country’s economy from collapse. It is because of this decision of Manmohan Singh that India has become a strong and stable economic power today.