From "licence and inspector raj" to the triumph of reforms, the Indian economy has seen it all in the rough and tumbles over the last 63 years. The first three decades were characterised by over-regulation through a system of industrial licensing. Approvals in the form of licences were required to set up an industry, to import capital goods, raw material and components and raising capital. Industrial production stagnated between the mid-1960s up to the late-1970s as regulation, rather than industrial development, became the overarching feature.
While the 1980s saw the first stirrings of liberalisation sans fanfare sometimes referred as “reform by stealth”, it was in 1991 when Finance Minister Manmohan Singh in a single stroke did away with the myriad restrictions to change the course of India’s history. India today is the second-fastest growing major economy of the world and the 10th largest in the world, with a GDP of $1 trillion (Rs 46 lakh crore). From the call-centre boomers to the young entrepreneurs and professionals, the country has made rapid strides in the past two decades. Rising income has led to a faster increase in the demand for goods and services, changing consumer patterns faster than anybody had expected.
Much of this would not have been achievable without the vision and insight of some key minds who tirelessly conceptualised, articulated and executed economic reforms policies over the last 19 years.
Presenting: the reformers.
Manmohan Singh, 77, Prime Minister
He ended the Licence raj
No discussion on India's economic reforms can begin without Prime Minister Manmohan Singh, the father of Indian economic reforms. The turning point in the Indian economy came on July 24, 1991, when Singh rose to present a Union Budget that changed the course of the country's history. As finance minister between 1991 and 1996, the soft-spoken Cambridge-educated Singh threw open India's heavily regulated economy and dismantled the 'Licence Raj' that prevented competition among firms.
In a way, Singh can be credited with the creation of the 'great Indian middle class' by unleashing the free spirit of entrepreneurship. His critics had sometimes accused him of ushering in an age of consumerism and pursuing World Bank policies. Irrespective of this, the policies have changed, in a fundamental way, the thinking of the Indian people. In his 1994 budget speech, Singh quoted Victor Hugo and compared India with an idea whose time had come. Recent history tells us he was right.
P Chidambaram, 64, Union Home Minister
In the thick of things
Commerce, finance, home…the erudite Harvard-educated P. Chidambaram has been at the epicentre of the country’s policymaking that has made India among the world's fastest-growing economies. In 1991, he became the commerce minister and in a single sitting on July 7 simplified the trade policy. His 1997-98 Budget was hailed as the 'dream' budget for announcing measures that brought about a paradigm shift in macroeconomic policymaking. He brought down peak income tax rate to an unbelievable 30 per cent. It has remained the peak rate ever since underlining Chidambaram's belief in the theoretical "Laffer curve" principle that a wider base and lower rates yield higher revenues.
He introduced the Voluntary Disclosure of Income Scheme (VDIS) aimed at harnessing India's black money for productive purposes. India's reforms have been underway for 19 years. Chidamabaram guided the economy as the finance minister during 2004 to 2008, a period when India grew at a scorching 9 per cent plus.
Wanted on every team
Montek Ahluwalia, 66, Deputy Chairman, Planning Commission
A key player and member of the team that led India onto a high growth trajectory, Montek Singh Ahluwalia was instrumental in crafting the contours of the economic reforms programme. The broad outline of the reforms was not very different from those undertaken by many developing countries in the 1980s.
Where India's reforms differed were in a slower, 'gradualist' pace at which they were implemented. This is where the Oxford-educated Ahluwalia played a seminal role.
Time magazine described him as the government's brain and as chief policy advisor instrumental in charting India's way forward.
The respect he commands across the political spectrum can be gauged from the fact that he has held key positions in different governments run by the country's two main parties.
Montek served as a Member of Planning Commission under the BJP-led National Democratic Alliance from 1998 to 2004 and was later appointed by the Congress-led UPA government as Deputy Chairman of Planning Commission.
Deepak Parekh, 65, HDFC Chairman
Banking on urban devt
Member of several high-level committees set up by the government, HDFC Chairman Parekh has accepted critical responsibilities whenever asked. As a chairman of the ambitious Rajeev Awaas Yojana that aims for a slum-free India in a decade, he has already submitted the report to the Ministry of Urban Development. He also chairs the committee of India Infrastructure Development Fund that aims to raise Rs 50,000 crore for funding requirements of road, airport and other infrastructure projects. He was a member of the committee looking into the deteriorating financial health of BSNL. Probably the country's most effective trouble-shooter, he was awarded the Padma Bhushan in 2006. Having played a significant role in development of the Indian housing sector, Parekh got involved in settling the dust around Satyam. Parekh, however, feels that urban reforms have not taken off. "The urban population is expected to double in 20 years but the infrastructure lags," he says. "We have to divert our attention towards urban reform on housing, jobs, sanitation."
Vijay Kelkar, 67, Chairman, Finance Commission
Making a case for VAT
In the last 15 years, there have been few personalities in the public policymaking domain as versatile as Vijay Kelkar. From petroleum pricing and tax reforms to disinvestment and fiscal federalism, Kelkar has been at the forefront of policy articulation. The Kelkar Committee report on direct and indirect tax reforms have become the guiding references for macroeconomic managers. It is in these two reports that the University of California educated Kelkar laid down the foundations of comprehensive tax reforms, arguing forcefully in favour of a countrywide value added tax (VAT) and Goods and Services Tax (GST) regime. A former finance secretary, he is is also often credited with popularising the term "second generation reforms". Recently, as chairman of the 13th Finance Commission, he made a strong case in favour of selling stakes in all PSUs and routing this money into the general pool to allow the government to spend more on infrastructure, education and health without damaging its fiscal health.
NK Singh, 69, Rajya Sabha MP
Change agent within
Nanda Kishore Singh is a career bureaucrat who has grown into a major figure in India's reforms discourse. He was a key member of Manmohan Singh's core team in the finance ministry and was responsible for negotiations with the International Monetary Fund, World Bank and other multi-lateral institutions during the difficult period of 1991-1993. Educated at St Stephen's College and Delhi School of Economics, Singh, as revenue secretary, was one of the principal architects of P Chidambaram's dream budget of 1997. Singh, who currently serves as a Member of Parliament in the Rajya Sabha, also played a major role in the national highway development programme and created a robust regulatory structure for the telecom sector. In 2006, Bihar Chief Minister Nitish Kumar invited him to join the state's Planning Commission as deputy chairman. If Bihar today is the fastest growing state in the country, a significant part of the credit goes to him for ushering in policies in a state that most had written off from the country's growth process.
Arun Shourie, 69, Journalist-parliamentarian
Journalist-parliamentarian-author Shourie has presided over two important programmes during the Atal Bihari Vajpayee-led National Democratic Alliance (NDA) regime — disinvestment of public sector undertakings and the national telecom policy. Maruti Udyog, Videsh Sanchar Nigam and Hindustan Zinc are among the 36 companies in which government sold significant stakes during Shourie's regime as disinvestment minister.
Between July 2000 and May 2004, he put one company a month on the disinvestment block.
The government was able to raise Rs 33,000 crore as disinvestment proceeds during the period, although it did come with its share of political controversies.
Shourie's adversaries accused him of selling the family silver, but his admirers said he was right as it was not the business of government to run non-strategic businesses.
Later, as telecom minister Shourie was instrumental in removing the artificial technology barrier and allowing CDMA players to offer full mobility services, ushering in an era of affordable tariffs.