to give a seal of approval to what the cabinet had decided.
Narasimha Rao did not want to leave anything to chance. He convened a meeting of theCWC at 3 p.m. at his residence. The official minutes of this meeting that lasted ninety minutes read as follows:
[…] at the permission of the Chair, Shri Manmohan Singh, Union Finance Minister, who was specially invited in the meeting apprised theWorking Committee about present financial position of the country and the Industrial Policy of the Government. After hearingShri Manmohan Singh, the Working Committee endorsed the Government’s industrial policy in principle and made it clear that every effort should be made to remain within the framework of the Party’s manifesto.
At this meeting, after having been warned by the prime minister that he was very much on his own, the finance minister quoted extensively from theCongress’ 1991 Lok Sabha election manifesto. 63 Manmohan Singh read out some crucial portions that went thus:
Restoring sound management will require priority attention to fiscal policy. The massive deficit in the budgetary system has created a serious fiscal imbalance. This will have to be rectified […] The Congress will restore fiscal balance in the budgetary system by drastically reducing wasteful expenditure, rationalising non-developmental expenditure and expanding the revenue base of the Government, particularly through a leaner, more dynamic and profit-oriented public sector. […]
The Congress will tackle the problem of the present foreign exchange crisis by pursuing vigorous export promotion, effective import substitution, establishing an appropriate exchange rate mechanism and increasing productivity and efficiency in our economy. […]
The Congress will pursue a sound policy framework: encouragement of entrepreneurship, development of capital markets, simplification of the regulatory system, bringing in new technology and increasing competitiveness for the benefit of the common man. […]
Foreign investment and technology collaboration will be permitted to obtain higher technology, to increase exports and to expand the production base. […]
The Congress will endeavour to abolish the monopoly of any sector or any individual enterprise in any field of manufacture, except on strategic or military considerations and open all manufacturing activity to competition.
AsManmohan Singh was coming out of the meeting, his senior cabinet colleague,Arjun Singh told him: ‘Doctor Saab, you have read the manifesto more carefully than all Congressmen.’
The next day was really an anti-climax. I was imagining a big bang announcement of the industrial policy reforms, as were many others. Instead, at about 12.50 p.m. on Wednesday, 24 July 1991, about four hours before Manmohan Singh was to present his budget,P. J. Kurien, the minister of state for industry got up in the Lok Sabha and read out a brief statement: ‘Sir, I beg to lay on the table a statement (Hindi and English versions) on Industrial Policy.’
That was it. A bland sentence to usher in a radical transformation of Indian enterprise. The occasion was made more ironic by the fact that the junior industry minister’s heart was not in the revolutionary contents of the new industrial policy. Indeed, at various points of time, he and his officials had acrimonious disagreements and the finance minister ultimately had to tell him that he had to fall in line to avoid international embarrassment.
Perhaps, this tepid introduction had been provoked by a fear of protests from sections of Indian industry. In fact, I had reason to believe that lobbying by some prominent figures of industry—nervous about foreign direct investment—had delayed the approval of the new industrial policy.
On 26 July, at theprime minister’s bidding and, if I my say so, at my suggestion, an unprecedented event took place. Manmohan Singh,Vijaya Bhaskara Reddy,Rangarajan Kumaramangalam, P.J. Kurien andP.K. Thungon (the other
Narasimha Rao did not want to leave anything to chance. He convened a meeting of theCWC at 3 p.m. at his residence. The official minutes of this meeting that lasted ninety minutes read as follows:
[…] at the permission of the Chair, Shri Manmohan Singh, Union Finance Minister, who was specially invited in the meeting apprised theWorking Committee about present financial position of the country and the Industrial Policy of the Government. After hearingShri Manmohan Singh, the Working Committee endorsed the Government’s industrial policy in principle and made it clear that every effort should be made to remain within the framework of the Party’s manifesto.
At this meeting, after having been warned by the prime minister that he was very much on his own, the finance minister quoted extensively from theCongress’ 1991 Lok Sabha election manifesto. 63 Manmohan Singh read out some crucial portions that went thus:
Restoring sound management will require priority attention to fiscal policy. The massive deficit in the budgetary system has created a serious fiscal imbalance. This will have to be rectified […] The Congress will restore fiscal balance in the budgetary system by drastically reducing wasteful expenditure, rationalising non-developmental expenditure and expanding the revenue base of the Government, particularly through a leaner, more dynamic and profit-oriented public sector. […]
The Congress will tackle the problem of the present foreign exchange crisis by pursuing vigorous export promotion, effective import substitution, establishing an appropriate exchange rate mechanism and increasing productivity and efficiency in our economy. […]
The Congress will pursue a sound policy framework: encouragement of entrepreneurship, development of capital markets, simplification of the regulatory system, bringing in new technology and increasing competitiveness for the benefit of the common man. […]
Foreign investment and technology collaboration will be permitted to obtain higher technology, to increase exports and to expand the production base. […]
The Congress will endeavour to abolish the monopoly of any sector or any individual enterprise in any field of manufacture, except on strategic or military considerations and open all manufacturing activity to competition.
AsManmohan Singh was coming out of the meeting, his senior cabinet colleague,Arjun Singh told him: ‘Doctor Saab, you have read the manifesto more carefully than all Congressmen.’
The next day was really an anti-climax. I was imagining a big bang announcement of the industrial policy reforms, as were many others. Instead, at about 12.50 p.m. on Wednesday, 24 July 1991, about four hours before Manmohan Singh was to present his budget,P. J. Kurien, the minister of state for industry got up in the Lok Sabha and read out a brief statement: ‘Sir, I beg to lay on the table a statement (Hindi and English versions) on Industrial Policy.’
That was it. A bland sentence to usher in a radical transformation of Indian enterprise. The occasion was made more ironic by the fact that the junior industry minister’s heart was not in the revolutionary contents of the new industrial policy. Indeed, at various points of time, he and his officials had acrimonious disagreements and the finance minister ultimately had to tell him that he had to fall in line to avoid international embarrassment.
Perhaps, this tepid introduction had been provoked by a fear of protests from sections of Indian industry. In fact, I had reason to believe that lobbying by some prominent figures of industry—nervous about foreign direct investment—had delayed the approval of the new industrial policy.
On 26 July, at theprime minister’s bidding and, if I my say so, at my suggestion, an unprecedented event took place. Manmohan Singh,Vijaya Bhaskara Reddy,Rangarajan Kumaramangalam, P.J. Kurien andP.K. Thungon (the other
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