Manmohan Singh: The Economic Reformer Who Defied the Left to Secure India’s US Nuclear Deal

Former Prime Minister Manmohan Singh breathed his last on Thursday at the age of 92 in New Delhi. He was admitted to the emergency department of AIIMS after his health worsened on Thursday evening.

Singh took oath as Prime Minister on May 22, 2004, and was sworn in for the second time in 2009.

Singh's Contribution to Economic Reforms

Singh's tenure as Finance Minister under Prime Minister PV Narasimha Rao's government was a pivotal moment in the history of modern India.

During his tenure, Singh did not only change the trajectory of India's economy but also introduced measures that encouraged liberalization, privatisation, and globalisation (LPG). Singh's reforms set the stage for India's growth in the global forum.

When Singh became the 22nd Finance Minister of India in 1991, the country was grappling with a balance-of-payments crisis. Foreign exchange reserves were low, which was not sufficient to cover even two weeks of imports.

Rao and Singh both realised the severity of the situation and spearheaded a series of reforms that will be remembered for centuries to come. Under Singh's reforms, India decided to move ahead of the state-controlled, protectionist model to adopt a more market-oriented, liberalised framework. Singh's the New Economic Policy (NEP) saved India from a near-bankruptcy.

"No power on earth can stop an idea whose time has come," said Singh during his budget speech in 1991 reflecting on the turbulence.

"I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea," Singh added.

Singh, often hailed as the architect of India’s economic liberalisation, spearheaded transformative reforms that dismantled the license raj, reduced trade barriers, and opened the country to foreign investment. His policies marked a decisive shift from a Soviet-style planned economy to a market-driven model.

Also Read | Former PM Manmohan Singh dies at 92

Key initiatives under Singh's leadership included the devaluation of the rupee, easing restrictions on foreign investment, and implementing fiscal austerity measures such as cutting subsidies. These reforms modernised India's banking sector and financial markets, made the rupee partially convertible, and attracted global capital.

Singh's Time in the PMO

In May 2004, Singh became the 13th Prime Minister of India. There were reports that Singh wanted to keep Finance Ministry under his charge but later he decided to give it to Palaniappan Chidambaram.

Singh kept on endorsing various right-based policies as Prime Minister which included the right to employment, the right to information and the right to education. Under his tenure, India saw historic policies like the Mahatma Gandhi National Rural Employment Guarantee Act.

When the global recession posed a major challenge to the economy, Singh announced that he would waive off farmers' outstanding loans of over Rs 60,000 crore. This was a move that economists, including many of his former colleagues in the finance ministry, also questioned.

Singh's initiatives did not only stabilise the country's economy but also unleashed avenues of economic growth. India's GDP growth rate experienced a significant boost, averaging 8.5 per cent.

Historic Civil Nuclear Deal with The U.S.

The Indo-US Civil Nuclear Cooperation Agreement was one of the key highlights of Singh's political career. It cemented India's place in the nuclear countries club.

The economist-turned-politician, Manmohan Singh, played a crucial role in turning the tide against the Left parties and provided outside support to the Congress-led United Progressive Alliance (UPA) by securing the backing of the Samajwadi Party (SP) during a crucial trust vote in July 2008 over the India-United States nuclear deal.

This event marked a dramatic shift in Congress-SP relations, which had been strained with suspicion and distrust since 1996. At that time, Mulayam Singh Yadav had reneged on his promise to support a Congress-led government after the fall of Atal Bihari Vajpayee’s 13-day administration, leaving a legacy of political bitterness that Singh’s strategic maneuver helped overcome.

This initiative showcased the former Prime Minister as a leader of unwavering conviction, willing to take bold political risks, even at the cost of endangering his government’s stability. Ultimately, his efforts bore fruit, as he not only secured the trust vote but also paved the way for civil nuclear cooperation, redefining India’s strategic partnership with the US.