I was preparing for a world that did not exist – Until Dr. Manmohan Singh reshaped it

I stepped into IIM Bangalore in 1990, eager to immerse myself in management theories. The verdant and beautiful campus, blessed with India’s finest metropolitan weather, became my home for the next two years.

We were taught general management principles and the key functional domains – tools for managers navigating a dynamic business landscape. Little did we realise that the world outside was not conducive to the practice of these subjects. India was far from dynamic. It had a rigid top-down economic order driven by a system of controls. My education was preparing me for a business world and an economic system that did not exist in real life.

When I went to IIM Bangalore in 1990, industrial licensing was still in force. The Planning Commission had laid out its top-down 5-year plan for what capacities were required and the Government had handed out permits for the same.

The MRTP (Monopolies and Restrictive Trade Practices) Act was a major hindrance to the plans of Indian businesses, with large areas of the economy cordoned off for the public sector. For those who may not be aware, control – on both quantity and pricing – existed for all kinds of commodities. For e.g., the production and prices of steel were fixed, while the cement industry had its own set of controls. There was a system of quotas for almost everything and a long waitlist for consumers to acquire basic products and services like two-wheelers and telephone connections. Interest rates were fixed and the price at which companies could issue shares was determined by the controller of capital issues. You even had to register under the Gold Control Act to sell jewellery. The currency rate was fixed by the Government and there was a thriving black market for foreign exchange. Foreign Direct Investment (FDI) was not welcome and foreign institutions could not participate in our equity markets.

My IIM Bangalore curriculum had me learn concepts in finance, production, marketing, human resources and IT. However, these had limited application in the real world as we were navigating a controlled economy. They were abstract concepts, detached from reality.

Free markets, competition, consumer choice and free pricing were not the order of the day. Demand and supply were not determined by the markets or the price mechanism. That was the role of the Government and the bureaucracy.

Everything changed in 1991. While I was still on campus, the seeds of a new economic order were sown.

The irony is that I have no recollection of the momentous Budget speech of 1991 by Dr. Manmohan Singh, the then Finance Minister of India. I don’t recollect watching it on TV and don’t recollect if the speech was published in its entirety by the press the next day. I certainly did not realise how monumental that day would be in India’s history.

As Dr. Manmohan Singh so aptly stated that day, “No power on earth can stop an idea whose time has come.” Little did I know that the reforms and liberalisation initiated in 1991 would transform my world, my career and everything around me in ways I could never have imagined.

We had a preview of what was on Dr. Manmohan Singh’s mind a few months before he became the Finance Minister of India. He delivered a convocation address to the graduating batch of IIM Bangalore in 1991, just months before he was unexpectedly called upon to take on this critical role.

For those unaware, India was grappling with multiple economic headwinds in 1991. The country was running dangerously low on foreign exchange reserves, unable to meet its expenses and obligations, and had to pledge its gold reserves as an emergency measure. The situation was that dire.

Dr. Manmohan Singh was prepared for the monumental task at hand. In his convocation address, he said: “I will focus on the current economic situation in the country and how we can overcome the acute economic crisis now facing us.” He outlined many of the challenges and solutions that he would later address and implement as the finance minister.

In retrospect, his speech served as a blueprint for the transformative reforms that followed.

You can read the speech here. https://www.iimb.ac.in/node/1084.

The then Director of IIM Bangalore, KRS Murthy, spoke to us at our convocation in April 1992 and he recognised the change. He used the term ‘turning point’ to describe the changes of 1991-92 in his speech to us. He added, ‘The changes initiated in the economy in 1991-92 seek to replace the administered system of growth for an insulated economy by one based on markets and competition linked to the rest of the world.’

Science fiction, they say, is reality ahead of schedule. We were right on schedule to catch it!

Our GDP in 1992 was $300 billion and today it is nearly $4 trillion. In this remarkable journey of growth, we have climbed from being the 17^th largest economy in 1991 to being the 5^th largest economy in the world today. My class and our generation caught the wave of opportunities and the economic benefits of liberalisation. We were lucky – we were at the right place at the right time. Director KRS Murthy was prescient when he said this to us in April 1992: ‘the demand for competent managers has been good and is likely to increase further as market and competition become the dominant forces in the allocation of resources.’

Dr. Manmohan Singh (1932-2024) reshaped India’s economic destiny as Finance Minister (1991-96) and later as Prime Minister (2004-2014). His vision and leadership transformed the structure and trajectory of the Indian economy.

A grateful nation salutes your legacy, Dr. Manmohan Singh. Without the liberalisation of 1991 and the reforms that followed, my IIM Bangalore education – and the aspirations of countless Indians – might have remained theoretically, unfulfilled dreams.