July 24, 2016

The July 24 Playbook of 1991 and Fatwas of Lenders

Shankkar Aiyar, Visiting Fellow, IDFC Institute believes that on the occasion of the 25 anniversary of the 1991 reforms a misleading narrative is developing about how and why reforms were ushered. He sets the record straight ithis piece.


"On July 24, Manmohan Singh, then Finance Minister, commended the budget with the evocative line 'No power on earth can stop an idea whose time has come' by Victor Hugo.The idea came with time and the tide of crisis and bailout. In the past weeks, there has been an intriguing attempt to represent a version of history—just as earlier it was claimed that reforms were not compelled by crisis. The implicit suggestion is that the ideas that constituted reforms were home-grown. This represents contextual autism. For sure, the opposition to licence raj existed from 1956 when C Rajagopalachari first voiced them. The critique of restrictive trade existed since the 1960s and the argument for opening up the economy had been made through the 1970s. What is critical is that none of the ideas were accepted till they were pushed on board by lenders."


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