July 1991 marked a watershed moment in India’s history as the Liberalisation Budget, spearheaded by then Prime Minister P.V. Narasimha Rao and Finance Minister Manmohan Singh, ushered in a new era of economic reforms, Congress said.
| Photo Credit: X/@Jairam_Ramesh

Congress president Mallikarjun Kharge on July 24 recalled the “groundbreaking achievement of the Liberalisation Budget of 1991” and asserted that there is a pressing need once again for meaningful and robust second-generation reforms.

July 1991 marked a watershed moment in India’s history as the Liberalisation Budget, spearheaded by then Prime Minister P.V. Narasimha Rao and Finance Minister Manmohan Singh, ushered in a new era of economic reforms, Mr. Kharge said in a post on X.

This visionary move revolutionised the country, empowering the middle class and uplifting millions from poverty and marginalisation, he said.

“The Congress party takes immense pride in this groundbreaking achievement, which catalysed India’s growth trajectory and continues to inspire progress and prosperity,” Mr. Kharge said.

“Today, once again, there is a pressing need for meaningful, robust second generation reforms, which help both the middle class and the deprived,” he said.

Liberalisation Budget of 1991

Former Union Finance Minister in the Narasimha Rao Government Dr. Manmohan Singh presented his first Budget on July 24, 1991. Budget 1991 together with the Industrial Policy of 1991 allowed private sector investment in almost all industrial sectors. The Reserve Bank of India stipulated a floor rate of interest and freed commercial banks to charge interest rates above the floor level based on their perceptions of risk.

The Government extend a similar freedom to term-lending financial institutions. Exchange control regulations were considerably liberalised with the repeal of the Foreign Exchange Regulation Act. It opened up the economy and Indians were exposed to foreign goods. To curb subsidy expenditure, for certain fertilisers prices were hiked by 40% overnight. Subsidised prices of PDS sugar and LPG cylinders were raised.

““There is no time to lose. Neither the Government nor the economy can live beyond its means year after year. The room for manoeuvre, to live on borrowed money or time, does not exist any more…. We need to expand the scope and the area for the operation of market forces,” Dr. Singh had said.

Congress general secretary in-charge communications Jairam Ramesh also noted that 33 years ago today, former Finance Minister Manmohan Singh presented his first Budget, ushering India into a whole new era.

“Today, 33 years ago, was also the day when the New Industrial Policy was unveiled, which catalysed the economic transformation of India anchored in the philosophy of Continuity with Change. I have written of the events of July 24th 1991 and the background to them in To the Brink and Back: India’s 1991 Story,” Mr. Ramesh said in a post on X.

Earlier, on July 23 after Union Finance Minister Nirmala Sitharaman presented the Union Budget 2024-25, senior Congress leader P. Chidambaram accused her of adopting ideas from the party manifesto for the 2024 Lok Sabha election. Shortly after Ms. Sitharaman concluded her speech, Mr. Chidambaram took a dig at the Centre over announcements as part of the Budget for the fiscal year 2024-25, saying he is glad that the Minister read the Congress 2024 manifesto. 

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The Opposition slammed the Union Budget calling it an exercise in political jugglery to appease the BJP’s two key allies, Janata Dal (United) and Telugu Desam Party, while doing little to address issues such as high rate of unemployment and inflation. States ruled by non-National Democratic Alliance (NDA) parties, the Opposition said, have been ignored.

The DMK and Congress have decided to protest against the “discriminatory” Budget. Tamil Nadu Chief Minister M.K. Stalin and the three Congress Chief Ministers, Karnataka’s Siddaramaiah, Telangana’s Revanth Reddy and Himachal Pradesh’s Sukhvinder Singh Sukhu will skip the Governing Council meeting of NITI Aayog on Saturday. The decision was taken at a meeting of the INDIA bloc on Tuesday evening.