Prime Minister Manmohan Singh, regarded as the architect of India’s economic reforms, said liberalisation would have not been the success it is today without the Reserve Bank’s enthusiastic support.
A former Governor of the Reserve Bank, Mr. Singh said that when he took over as Finance Minister in 1991 he was convinced that the economic liberalisation could only succeed if complemented by broad-based reform in the banking and financial sectors.
“I turned to my old friend and former RBI Governor M. Narasimham to chair a committee to make recommendations on this issue. It would have been difficult to implement those reforms had they not received enthusiastic support, as they did, from the Governor of the day S. Venkitaramanan,” Mr. Singh said, paying credit for the role RBI played in helping shape India’s economic future.
Mr. Singh, who served as RBI Governor from 1982-85, was speaking at the Platinum Jubilee celebrations of the apex bank.
It was during Mr. Venkitaramanan’s tenure that the country faced difficulties related to the external sector, including the balance of payments crisis. His term also saw India adopt the IMF’s stabilisation programme where the Rupee underwent a devaluation and the subsequent launch of the programme of economic reforms.
Mr. Singh said C. Rangarajan, who succeeded Mr. Venkitaramanan, took the financial reform agenda further forward in many critical areas.
The Prime Minister said that he recalled “with deep appreciation the role played by the Reserve Bank in helping the government in the implementation of the agenda for economic reforms when I was Finance Minister.”
“We were often criticised for our incremental approach which critics often complained was too slow. But few would deny that we have accomplished a great deal over the years.
“We have successfully eliminated stifling controls on industry and investment. We have opened the economy to foreign trade, lowered tariffs and switched over to a market determined exchange rate,” he said, pointing out that all of this has been achieved without experiencing serious macro-economic crisis or severe inflation.
