On 31 st March, 1991 Bharat had forex reserves of $5.83 billion and was struggling to finance 3.5 months of imports. Today our forex reserves are $363 billion that can comfortably take care of 9 months of imports! Our exports were $ 18 billion in 1991 which rose to $310 billion in 2015.
Bharat’s GDP was $267 billion in 1991 which rapidly increased to $2.4 trillion in 2015. Our per capita income in 1991 was Rs.11,535/ which increased to Rs.93,293/ today. Between 1994 and 2012, 13.3 crore people in Bharat were lifted out of poverty.
We have now completed 25 years of Bharat’s liberalization of the economy. Therefore, there is a reason to celebrate the same and the above key economic parameters add credence to this statement.
During these 25 years we have seen several governments formed by the leading political parties in Bharat. Though there could be some ideological differences between these political parties it is gratifying to note that we never lost the direction on the path of liberalization though the pace of reforms could be probably slow sometimes caused by political compulsions.
Bharat was fortunate to have two tallest leaders and statesmen as Prime Ministers in this period in P V Narasimha Rao and Atal Bihari Vajpayee. Bharat was more than fortunate to have Dr. Abdul Kalam as President during this era who inspired a generation of Bharat’s youth to dream and think big.
While the political leadership was given by P V Narasimha Rao to initiate the economic reforms in 1991 (though it was mainly out of compulsion but not by choice) the introduction of reform process was done with clinical precision by Dr. Man Mohan Singh. I would rate these four stalwarts as the four pillars of Bharat’s liberalization.
Political consensus to carry forward the economic reforms was managed by both PVNR and Atal ji whereas the responsibility of executing the economic reforms was shouldered by Dr. Singh and later by NDA Finance Ministers like Yashwant Sinha. Dr. Kalam did his part by constantly motivating the youth of the nation towards liberalization of thoughts by out of the box thinking.
During this quarter century Bharat has built a strong regulatory mechanism to ensure adequate checks and controls to avoid any major pitfalls while going ahead with the reforms. PVNR had to primarily focus on financial sector reforms due to the crisis situation prevailing in 1991. His successor Atal ji carried forward the reform process by focusing on infrastructure development, particularly the roads and national highways across the country and telecommunications to improve the connectivity.
The conventional brick and mortar banking has transformed into virtual banking expanding its frontiers through anywhere, anytime banking to the common man. Technology has played a vital role in bringing this paradigm shift in Bharatiya banking.
As a career banker I was excited when the financial sector reforms were initiated in 1991 as a sequel to economic reforms. In my first paper presented in the 16th All India Bank Economists’ Conference in January 1993 in Pune, I said, “Indian Commercial banks so long used to administered pricing system by the RBI, would now have to face the music in the deregulated environment.” I also said, in the days to come banks will have to focus more on marketing of bank advances at par with marketing of bank deposits, in my article published on 31 st March, 1993 in Financial Express.
Some of my senior banking colleagues were amused but not convinced on what I said as I was still a novice in banking with hardly 7 years of experience. Today, I am glad that most of our dreams in 1991 have become a reality. Of course we still have a long way to go and the road ahead is not smooth and perhaps a bumpy ride. Yet the fact that we are sure of our destination and confident that we are going in the right direction more than compensates the slow pace of our journey.
Our next mile stones? In the next quarter century we should be able to achieve the following:
- Common platform to share the customer data base, i.e., KYC documents by all the banks.
- Customer to transact all his banking operations from any bank of his choice, though he may have account with some other bank.
- Paperless full-fledged e-commerce that provides a complete interface for the exporters and importers with banks, customs, insurance and shipping companies and other government institutions (online and on real-time basis).
- Farmers to access the commodities markets to fix remunerative future prices for their crops and get full insurance cover for their crops and bank loans.
- A zero balance account to every citizen of the country at the time of his or her birth along with Aadhar card and health card, all in electronic form.
I may not live to see these things happen in 2041 but I am confident that they will become a reality by 2041. I hope some of my young friends will recollect my wish list mentioned above and feel happy that they have become a reality when Bharat celebrates its golden jubilee of liberalization in 2041.
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