How Atal Bihari Vajpayee's economic policies paved way for India's growth

Vajpayee is no more, but no one can doubt his contribution on economic, political and diplomatic fronts.

By Prosenjit Datta  
Thursday, August 16, 2018

P V Narasimha Rao and Dr Manmohan Singh are credited as the architects of economic reforms in India - albeit under pressure from the International Monetary Fund. But, it was Atal Bihari Vajpayee who rolled out the economic template and policies that would be followed by the prime ministers who succeeded him.

While there are plenty of people who praise Vajpayee for his dignity, his unfailing courtesy, his wit and his oratorical skills and his ability to take the opposition parties along, the economic contribution of his government is often overlooked. He attracted some brilliant and committed and highly educated followers, gave them critical portfolios and set about fixing many of India's long standing problems.

So you had Arun Shourie rolling up his sleeves and chalking out a blue print for selling off ailing PSUs, which the government should never have been running. You had Yashwant Sinha moving to simplify taxes and free up businesses even further and creating an atmosphere conducive for attracting more foreign direct investment. (And later on Jaswant Singh carrying on the path of liberalisation after taking over as finance minister). You had Major General B C Khanduri setting up connecting India through the highway projects in a systematic and planned manner. And you had Pramod Mahajan changing the telecom policy that would allow mobile penetration across the country at affordable rates, and make India the cheapest country in the world when it came to mobile telephony rates.

In between, a change in the budget had allowed IT services companies to charge all expenditure on their Y2K business as revenue expenditure, and which in turn led them to grow at breakneck speed. Finally, the Vajpayee government brought in the Asset Reconstruction Companies (ARCs), the first move to help banks deal with their bad loans, and the credit bureau.

None of these were easy. Vajpayee was running a coalition government with all its attendant pulls and pushes. The RSS was reportedly not very happy with him either because they saw him as too liberal and too welcoming of foreign direct investment. And, post Pokhran, many developed countries tried to stymie India's economy in big and small ways. He also had to deal with the Kargil war.

In the political and diplomatic arena, Vajpayee was soft spoken and suave and not frightened of extending the olive branch to Pakistan for peace talks. But he had enough steel inside - which Musharraf found out in the Kargil war. Equally, Pokhran showed the world that India was not just a nuclear power, but perfectly comfortable in showing off its capabilities on the nuclear front.

Vajpayee is no more, but no one can doubt his contribution on economic, political and diplomatic fronts.

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