1991 reforms could have begun in 1981, but not during Rajaji’s time, says Chidambaram

India could have carried out economic reforms 10 years before 1991, but “certainly not” during the time of Swatantra Party’s founder C. Rajagopalachari, the first and only Indian governor-general of independent India, former Union Minister P. Chidambaram told The Hindu 360, the Tamil YouTube channel of The Hindu.

Asked whether the country would have been better off had it followed Rajagopalachari’s prescription of opening up the economy in the late 1950s through the early 1970s, Mr. Chidambaram, who presented nine Union Budgets, acknowledged that the economic reforms could have begun in 1981.

“At that time, [then Prime Minister] Indira Gandhi had made an attempt. But her Ministers and political leaders around her did not allow her to [get it done]… Even in 1985, it did not happen. If you go through the presidential address of the AlCC [All India Congress Committee] chief and Prime Minister Rajiv Gandhi at the Mumbai session of the Congress, he said all of what was talked about in 1991. He did not have a [conducive] political situation,” Mr. Chidambaram said.

Elaborating further, he said that in the pre-1981 period, capitalist countries claimed to be following an open market economy, but there was no rules-based order for the global economy. The World Trade Organisation (WTO) did not exist then, he pointed out.

“They [capitalist countries] had capital and technology. They called theirs an open economy. But the poor and middle-income countries could not have followed this…,” he said.

Conceding there was a 10-year delay in initiating the reforms, Mr. Chidambaram, however, said that “in the days of Rajaji [who died in 1972], India did not have capital or technology to follow the open economy” system.