New Delhi, January 16: The Reforms of 1991, that Congress boast of, were not actually invented by congress. The IMF blackmailed India to opt for reforms in order to provide $1.8 billion for paying its loans.
India’s primary trading partner was the Soviet Union and, in 1991, the Soviet Union fell. For all intents and purposes, India lost its best customer. And then oil prices went up during the first Gulf War.
All of this lead to a serious monetary crisis for the Indian government, which also suffered from a leadership vacuum. Rajiv resigned after losing an election in 1989 to Vishwanath Pratap Singh. Singh lasted in office for less than a year. Next came Chandra Shekhar who became Prime Minister on November 10, 1990 and resigned on June 21, 1991. Finally, Pamulaparthi Venkata Narasimha Rao took office in June, 1991 and served until May of 1996.
India was in deep trouble. There were serious concerns that the government would need to default on its loans. India eventually requested a $1.8 billion bailout from the International Monetary Fund.
The bailout came with strings attached. The IMF demanded reforms. Rao’s government initiated a program of economic liberalization, ending many public monopolies and allowing direct foreign investment in many of the country’s industries.
Behind the facade of these reforms, however, lies a story of increasing disparities: a rise in under- and unemployment; a deterioration in the livelihoods of a majority of the population; an increase in critical poverty; a decline in the membership of trade unions; and a phenomenal increase in the number of workers in the informal sectors of the economy and in the extent of the irregular employment.
Additionally, there has been an intensification of rampant corruption, particularly by political and economic elites; a staggering increase in environmental degradation in both urban and rural areas; loss of genetic bio-diversity; and growing social unrest arising largely out of greater immiseration. At the same time, there has been an increase in dependence upon international capital and multilateral and transnational institutions, resulting in a critical loss of control–not just by producers, but by the country itself.
–Agencies