Part2 : Why I disagreed with My Friend

Part 1: Angst With a close friend

Manmohan singh is through professional. being economist in Government , most of his reforms was in government Economics.

During 1991-96 period ,
- opening of India to FDI and FII and more importantly NRI accounts Foreign Currency relaxed( individual can have 7 yrs foreign currency account w/o tax)
and current account convertibility ( an individual who stayed abroad for 6 mnths can convert his foriegn currency to any other foriegn currency or use it to buy any foreign property)
- Export & Import control relaxed and customs duty relaxed
- complete removal of license raj, industrial laws
- Monopolies Restrications (MRTPC) was changed to allow to companies to consolidate ( in the case of HLL, India become of the export hub employing many many more people in multiple shifts)
- Major slashes in Income tax, corporate tax, excise and customs duties.

Major achievements was
- GDP growth picked up 6%
- Foreign currecny reserve crossed $30Bns
- exports/imports increased
- IT sector started growing
- Disinvestment in public sector to make up for loss in above taxes

Major failures
- High inflation around 15%
- poverty rate was still around 50%
- no reforms in non-economic arena like industries,land laws, agricultural,transportation, labor laws, judicial laws, election reforms

As a footnote, ManMohan singh after his term as a Governor of RBI, took charge of finance adviser for BARC and DRDO before he become the finance minister, it is that experience that helped garb the INDO-US nuclear deal. and he knows that he is doing a historic accord.


Part3:-Next 101 Basic current economies