The Father of Indian Economic Reforms- Pamulaparti Venkata Narasimha Rao was popularly known as P.V. Narasimha Rao, the politician who served India as the Prime Minister. His ascendancy to the prime ministership was politically significant. During his tenure he led an important administration, overseeing a major economic transformation and several home incidents affecting national security of India. From the vantage point of his long personal and professional association with the former prime minister, bestselling author Sanjaya Baru shows how PV’s impact on the nation’s fortunes went way beyond the economy.
In his book on P.V. Narasimha Rao, Sanjaya Baru throws light on some important points.
An Inside account
The book is an inside account of the politics, economics and geopolitics that combined to make 1991 a turning point for India and the period preceding that year was a difficult one for India in economical terms due to the balance of payments crisis. politically.
When P.V. Narasimha Rao came as a Prime Minister of the country the economic crisis was the one thing that was following and with the entry of P.V. Narasimha Rao, reforms progressed furthest in the areas like foreign investment , capital markets and domestic businesses.
Changes in the regulation act
Alongside Trade reforms, Narasimha Rao also brings changes in the regulation of foreign direct investment that were introduced to open India to foreign trade while stabilizing external loans. Rao’s government’s goals were reducing the fiscal deficit and to increase the investment in the infrastructure.
The major reforms in India’s capital markets led to an influx of foreign portfolio investment. The major economic policies adopted by Rao include such as abolishing the controller of capital issues which decided the prices and the number of shares that firms could issue.
Introduction of the SEBI Act
P.V. Narasimha Rao as the Prime Minister introduced the SEBI (Securities and Exchange Board of India) Act of 1 992 and also the amendment in the Security Laws which gave SEBI the legal authority to register and regulate all security market intermediaries.
The rise of Capital
The opening up of India’s equity market to investments by foreign institutional investors came out as a benefit, permitting Indian firms to raise capital on International markets by issuing GDRs (Global Depository Reciepts).
National Stock Exchange
P.V. Narasimha Rao made a start for the National Stock Exchange as a computer-based trading system which served as an instrument to leverage reforms of India’s other stock exchanges. Later the National Stock Exchange emerged as India’s largest exchange.
Having all the good steps in hand, P.V. Narasimha Rao also encouraged foreign direct investment (FDI) by increasing the maximum limit on share of foreign capital in joint ventures with hundred percent foreign equity permitted in priority sectors and the streamline procedures automatically approved projects within the limits for foreign participation.
The Keen Foresight
P V Narasimha Rao ascended into Prime Ministerial office at a time when India was stuck at its worst phase of economic turmoil. His keen foresight had initiated India to a path of liberalization, the ripples of which are felt by the country till date.
Modern India Chanakya
P.V. Narasimha Rao because of his vision is still considered as the Modern India Chanakya who by his hard work and the keen understanding of Politics took India to the next level and created history.