1991 Economic Reforms - Excerpt from A Better India Better World by N.R.Narayana Murthy

Everything is changed in a jiffy when the reformers led by Narasimha Rao waved their magic wands. Just in a matter of weeks we were in a new orbit unconstrained by the major debilitating forces. The government removed licensing in most sectors of the economy. Since 1991, I have not gone to Delhi to obtain a single licence from the government. The reforms provided full current account convertibility. In fact, today there is absolutely no restriction on any current account transaction. Even in the area of capital account convertibility, we hardly have any restrictions for corporations. Indian companies have been acquiring companies abroad like never before in the economic history of India.

The government, realizing the futility of mandating IPO prices, abolished the office of the CCI and allowed Indian companies to set the IPO price in consultation with their investment bankers. This has resulted in market-oriented pricing policies and has generated a lot of enthusiasm among entrepreneurs.

These major reforms have influenced Indian businesses in many ways. First, the reforms enabled our business leaders to spend their time in focusing on the market, innovation and employees rather than spending their time lobbying in the corridors of Delhi. Second, they removed uncertainty in business decisions forced by bureaucratic delays and whims. In other words, post reforms, businesses are much more in control of their own destiny than before. There is no climate of helplessness in the board rooms. The market is the primary determinant of the success of companies. Third, the reforms reduced the tyranny of rent-seeking and corruption to a large extent. Fourth, these policy changes made it easy for the entry of world-class multi-national companies (MNCs) into India.

Courtesy: A Better India: A Better World by N.R.Narayana Murthy