ISAS Briefs

There are moments in the lives of nations when those who rule can bring about profound changes in the lives of the ruled. In India, 1991 was such a moment when then-Finance Minister Manmohan Singh, facing an economic crisis of immense proportion, chose to break with the past. With a few bold strokes, he demolished the “License Raj” that had been put in place with such tender loving care by Jawaharlal Nehru and his political associates. The Raj had kept India stuck in an economic groove that produced what its own economists called the “Hindu rate of growth” – 3.5 percent a year when the population was increasing by almost two percent a year. That did not leave much room for the poor, and the poor, in whose name the Raj had been established, suffered immeasurably. India became tremendously impoverished, with 40 percent of its population living in absolute poverty. That proportion introduced a new term in economics – the bottom 40 percent.