The weight of history, particularly the legacy of post-colonial economic policies, hangs heavy over the Indian landscape. This history is shaped by centuries of struggle, resilience and the enduring quest for a better future. The persona of Dr Manmohan Singh is inextricably linked to this history – a name that evokes a complex tapestry of emotions.

For some, he represents a decisive break from the past, a bold reformer who steered India toward a new era of economic prosperity.

For others, his legacy is intertwined with the enduring challenges of inequality and the quiet anxieties of those who felt left behind by the pace of change.

Dr Manmohan Singh, an eminent economist, academic, and statesman, left an indelible mark on India’s economic and political landscape. From his transformative role as Finance Minister in the 1990s to his decade-long tenure as Prime Minister, Singh’s career exemplifies integrity, intellect, and a steadfast commitment to the nation.

Celebrated for liberalising India’s economy, his story is one of triumphs and challenges, demonstrating how quiet, informed leadership can steer a nation through pivotal moments. However, his policies also invite critical scrutiny for their long-term implications.

I intend to dissect the Manmohan Singh era in two distinct ways.

First, I will examine how Singh’s legacy is currently perceived by a large section of the Indian populace following his passing. This reflection will explore the reverence and admiration that many hold for his contributions to the nation’s progress.

Second, I will address the criticism that has consistently surrounded Singh’s policies, particularly from those who view some of his economic decisions as having unintended consequences. Through these perspectives, I will begin by analysing the dominant narratives surrounding Singh, before delving into a critical examination of the flipside of his policies and their long-term impacts.

The pre-1991 economic crisis: A nation in turmoil

Several economists believe that by the early 1990s, India’s economy was on the brink of collapse. Decades of inward-looking policies, influenced by Nehruvian socialism, were often criticised for fostering inefficiencies, stagnating growth, and creating an overregulated environment.

However, some sections argue that these policies were designed to protect nascent domestic industries and reduce dependency on foreign economies, suggesting that their impact might not have been as detrimental as widely perceived.

Nonetheless, the country’s economic model, reliant on import substitution and state-led enterprises, struggled to adapt to global economic trends, particularly in the context of rising oil prices and the Gulf War. The situation is said to have once become so dire that foreign exchange reserves dwindled to cover barely two weeks of imports.

Inflation soared, industrial output faltered, and the balance of payments crisis threatened to spiral out of control. These were turbulent times that demanded bold, innovative leadership.

Prime Minister P. V. Narasimha Rao recognised the gravity of the crisis and sought a finance minister who could rise to the challenge. Dr Manmohan Singh’s impeccable credentials made him an obvious choice. A Cambridge-educated economist, Singh had served as Chief Economic Advisor to the Government of India, Governor of the Reserve Bank of India, Deputy Chairman of the Planning Commission, and held key roles at the International Monetary Fund. His appointment marked the beginning of a transformative chapter in India’s history.

Economic liberalisation: Singh’s defining legacy

Dr Singh’s tenure as the Finance Minister was marked by a series of radical reforms that dismantled the socialist-era controls that had dominated India’s economy. These measures, implemented in partnership with Rao, laid the foundation for modern India. Key reforms included:

De-licensing and Deregulation – The industrial licensing system, or ‘License Raj,’ was curtailed, allowing private businesses to operate more freely and reducing bureaucratic hurdles. This move fostered entrepreneurship and spurred industrial growth.

By reducing the need for multiple bureaucratic approvals, businesses could now allocate resources more efficiently, leading to higher productivity and innovation. Additionally, sectors like automobiles, consumer goods, and pharmaceuticals witnessed a boom in private investment and job creation.

Trade liberalisation – Singh reduced import tariffs, eased export restrictions, and opened the economy to foreign direct investment (FDI). These measures integrated India into the global economy, attracting investment and boosting trade.

The removal of import licensing and reduction of tariffs allowed Indian businesses access to better technology and raw materials, improving competitiveness. Over time, industries such as information technology, textiles, and manufacturing emerged as key drivers of exports.

Currency Reforms – The rupee was devalued to enhance export competitiveness. This move, though controversial, helped stabilise the economy and initiated a transition to a market-determined exchange rate. These reforms not only restored India’s credibility in international markets but also paved the way for increased foreign exchange reserves.

However, this devaluation impacted import-dependent industries, raising costs for essential goods and highlighting the complexities of managing trade-offs in policy decisions.

Financial sector modernisation – Singh reformed banking and financial institutions, improving their efficiency and resilience. The reforms modernised India’s financial infrastructure, paving the way for long-term growth. Measures such as easing restrictions on private banks and strengthening regulatory oversight boosted consumer confidence and facilitated credit availability for businesses.

These reforms were not just about economic recovery but about charting a new course for India. Under Singh’s stewardship, the Indian economy transitioned from a state of shortages to one of opportunities and entrepreneurial dynamism.

Transition to political leadership: The prime ministerial era

After his tenure as Finance Minister, Dr Singh returned to academia and administrative roles. However, his reputation as an honest, competent leader endured. By 2004, the Indian National Congress sought to reclaim its political dominance, and Singh emerged as a unifying figure.

During the 2008 global financial crisis, India faced significant challenges, including slowing economic growth due to reduced global demand, capital outflows that triggered stock market volatility, a weakened rupee and a sharp decline in exports, particularly in sectors like textiles and IT.

The crisis also led to a credit crunch, impacting businesses and financial institutions, while rising unemployment hit export-driven industries.

When Congress won the general elections under Sonia Gandhi’s leadership, she declined the Prime Minister’s position and chose Singh instead. His appointment as Prime Minister was historic, marking the rise of a technocrat to the nation’s highest office.

During his tenure as the Prime Minister from 2004 to 2014, Singh oversaw a period of robust economic growth. The key achievements during his tenure included:

Infrastructure development – During Dr Singh’s tenure, significant investments were made in infrastructure, which played a crucial role in boosting economic productivity and improving the quality of life. Key projects, such as the Golden Quadrilateral Highway network, connected major cities, facilitating smoother trade and reducing travel time.

Additionally, substantial improvements in power generation, including the expansion of electricity capacity, helped address energy shortages and supported industrial growth. Investments in airports and ports also contributed to India’s integration into the global economy, enabling better connectivity and trade. These infrastructure advancements laid the foundation for future growth, enhancing both domestic and international business activities.

Social welfare programmes – During Dr Singh’s era, several landmark initiatives were introduced to address social inequality and improve the livelihoods of vulnerable populations. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), for example, provided guaranteed rural employment for up to 100 days, helping to alleviate poverty and improve the quality of life in rural areas. By focusing on infrastructure projects, MGNREGA not only created jobs but also empowered women, who made up a significant portion of the workforce, thus enhancing their economic independence.

Similarly, the Right to Information (RTI) Act, passed under Singh’s leadership, empowered citizens by granting them the legal right to access government information. This transparency initiative played a crucial role in holding public officials accountable, reducing corruption, and promoting good governance.

These social welfare programmes reflected Singh’s commitment to inclusive growth and strengthened democratic principles by giving marginalised communities a voice and a means to influence government actions.

India’s global outreach and integration – Dr Singh’s tenure also marked a period of heightened global engagement. Notable achievements included deepening collaborative ties with major global powers, fostering regional cooperation through initiatives like SAARC, and championing India's role in other international forums like BRICS.

The Indo-US Civil Nuclear Agreement of 2008 ended decades of nuclear isolation and facilitated cooperation in nuclear energy. It symbolised India’s growing stature on the world stage and enhanced energy security by diversifying resources.

Singh championed economic integration within South Asia and advocated for India’s active participation in global forums like the G20. His efforts reflected a vision of India as a responsible global power committed to multilateralism.

A tumultuous period

Despite his accomplishments, Singh’s tenure was not without controversy:

The latter half of Dr Manmohan Singh’s second term was marred by high-profile scandals, including the 2G telecom and coal block allocation scams. In both cases, allegations of corruption and favouritism led to significant losses to the public.

While Singh himself was not directly implicated, these controversies tarnished his government’s image and eroded public trust in his administration.

Critics accused Manmohan Singh of being a ‘weak’ Prime Minister, constrained by coalition politics and unable to assert control over his administration.

His cautious approach to key issues, especially during scandals and policy disagreements, led to the perception that he lacked the political will to act decisively. Many attributed this to his reliance on coalition partners for political survival, which often required compromises.

Additionally, his technocratic background, while effective in economic matters, was seen as insufficient for navigating the political complexities of India’s governance.

While economic liberalisation and globalisation under Dr Manmohan Singh fuelled growth, the benefits were unevenly distributed. Urban areas thrived, but in rural India marginalised groups, such as farmers and tribal communities, often lagged behind.

This disparity highlighted the need for more inclusive policies to ensure that the gains of economic growth reached all sections of society.

Liberalisation’s double-edged impact

The rapid opening of markets without adequate regulatory frameworks, however, is also believed to have disadvantaged large segments of the population.

The reduction of trade barriers and the influx of foreign capital, while beneficial for economic growth, did not always translate to equitable benefits for all citizens. An International Monetary Fund (IMF) working paper notes that rural districts, where sectors more exposed to liberalisation were concentrated, experienced slower declines in poverty and lower consumption growth, suggesting that the benefits of liberalisation were unevenly distributed.

While the economic reforms of 1991 brought undeniable benefits, they also exposed systemic vulnerabilities that have shaped public discourse ever since. Some of the key impacts included:

Impressive growth, uneven gains – India’s GDP growth accelerated, and millions were lifted out of poverty. Urban centres became hubs of opportunity, attracting global investments and fostering a burgeoning middle class. However, critics argued that the benefits were unevenly distributed, with urban elites and corporations reaping disproportionate rewards. Rural areas, dependent on agriculture, often lagged in accessing these newfound opportunities.

Increased inequality – The absence of robust regulatory frameworks and social safety nets exacerbated disparities. Income and wealth inequalities widened, creating a stark divide between urban and rural India. While urban areas thrived with better infrastructure and access to services, rural regions grappled with inadequate healthcare, education, and job opportunities, reinforcing cycles of poverty.

Labour and employment challenges – Privatisation and deregulation led to significant job losses in the public sector. Many workers faced precarious employment conditions in the private sector, which lacked strong labour protections. The shift toward contract-based employment and the decline of traditional industries disrupted livelihoods, sparking protests and calls for stronger labour policies.

Agrarian distress – The agrarian sector, a cornerstone of India’s economy, struggled to adapt to the new economic realities. Farmers faced declining incomes and rising debt, leading to widespread distress. Limited investment in rural infrastructure and minimal price support mechanisms further exacerbated the challenges, contributing to farmer suicides and social unrest.

Singh’s legacy: A mixed yet enduring impact

Dr Singh’s legacy is a complex one, reflecting both triumphs and challenges. On one hand, his reforms transformed India into a vibrant, globally connected economy. Millions of Indians benefited from new opportunities, improved infrastructure, and greater access to goods and services. On the other hand, the reforms underscored the need for a balance between growth and equity.

For ordinary citizens, the tangible benefits of Singh’s policies included job creation, enhanced connectivity, and improved access to technology. The emergence of India as a global IT hub, driven by liberalisation, exemplified the transformative potential of his vision.

Yet, the systemic inequities that persisted served as a reminder of the challenges inherent in governing a diverse and populous nation.

Singh’s nuanced understanding of these issues became evident during his second term as Prime Minister. His measured and scholarly approach to reform was rooted in a belief that economic growth could uplift all sections of society. However, as Harish Khare poignantly reflects in his tribute, Singh was acutely aware of the systemic inequalities that persisted despite his efforts.

Khare recounts an incident from 2009 during Singh’s second term as Prime Minister:

“There was a small function at 7, RCR, an award-giving ceremony for the best steel production outfit. All the corporate honchos were in attendance. The ceremony ended, and over tea, the steel tycoons were telling the Prime Minister that ‘something’ had to be done about ‘these Naxals’ who were making their lives difficult. After a few minutes of this diatribe, Dr Manmohan Singh politely observed, ‘Perhaps many of them [i.e., the so-called Naxals] believe that the system we have is very unfair to them.’ Stunned corporate silence.’”

Khare further observed that this was his first glimpse of how Singh had transitioned from being the finance minister behind the 1991 reforms to a compassionate prime minister, deeply aware of the significant inequalities and deprivations affecting rural areas. He remarked that Singh had moved beyond if he had ever adhered to it, the weighty rhetoric of the trickle-down theory.

This uneven distribution of benefits became a central concern, as illustrated by the anecdote. On one hand, it highlights Singh’s awareness of the growing social divide—a direct consequence of economic policies that disproportionately benefited certain sections of society.

On the other hand, it underscores his discomfort with the very system he helped establish, a system that left large swathes of the population feeling disenfranchised and alienated.

In essence, Singh’s observation to the steel tycoons was not just a comment on the unrest in Naxal-affected areas but a broader critique of the inequities perpetuated by unbalanced economic growth. His acknowledgement of the ‘unfairness' of the system suggests a recognition that his reforms, while transformative, did not sufficiently address the ground realities of inequality and exclusion.

While some critics argue that liberalisation was driven by external pressures from the World Bank and IMF, others believe it was necessitated by the country’s dire economic conditions.

Nonetheless, the swift implementation of these reforms, under the guidance of such international bodies, led to concerns that India’s economic sovereignty was being compromised. The emphasis on rapid market opening, without adequate safety nets, is seen by some as having prioritised foreign investor interests over domestic welfare.

This perspective is supported by observations that trade liberalisation in India, influenced by external factors, had complex effects on poverty and inequality, with certain regions and populations not experiencing the anticipated benefits.

As Finance Minister, Singh implemented these measures under Prime Minister P. V. Narasimha Rao’s leadership, aligning with structural adjustment programmes mandated by these institutions. While Singh is credited for his role, critics argue that the reforms were largely driven by limited public debate or consideration of long-term consequences.

Singh’s economic vision was rooted in pragmatism and necessity. Faced with a severe crisis, his reforms were designed to stabilise the economy and lay the groundwork for future growth.

However, as subsequent governments intensified these policies, the perils of unchecked liberalisation became apparent. Policies such as demonetisation and labour law reforms further highlighted the challenges of balancing growth with equitable distribution, with disproportionate impacts on vulnerable populations.

Many analysts argue that Singh’s reforms laid the foundation for growth, but the lack of corrective measures by successive governments has allowed these divides to widen, with Modi’s administration amplifying the disparities.

A legacy of integrity and pragmatism

Manmohan Singh’s journey from a technocrat to a statesman embodies a life devoted to public service. His role in liberalising India’s economy and steering it through critical junctures has left an enduring legacy. While his tenure was not without flaws, Singh remains a symbol of quiet determination, intellect, and informed decision-making.

His leadership underscores the potential of economic reforms to drive progress while highlighting the importance of addressing systemic inequalities.

As India continues to navigate the complexities of development, Singh’s legacy serves as both a guide and a cautionary tale. His story is a reminder that true progress lies in balancing economic growth with social justice, ensuring that all sections of society share in the benefits of development.

As radical socialists point out, a proper evaluation of Singh’s contribution to the Indian economy can only come from the poorest of the poor in this nation, where a large majority of people are still struggling with poverty, hunger, and unemployment.

Follow us on WhatsApp: https://www.whatsapp.com/channel/0029Vb2MGE66xCSYBQlozV21

Follow us on Facebook: https://www.facebook.com/profile.php?id=100073685446941