Yahoo Finance Atal Bihari Vajpayee, the statesman who laid the foundation for India’s $5-trillion economy dream
Today is former prime minister Atal Bihar Vajpayee’s death anniversary. One of the founding members of the Bharatiya Janata Party, Vajpayee breathed his last on August 16, 2018. Prime Minister Modi and many other leaders paid rich tributes to him on social media.
We remember his warm personality, we remember his endearing nature, we remember his wit and humour, we remember his contribution to national progress.
Atal Ji lives in the hearts and minds of our citizens. Today, on his Punya Tithi went to Sadaiv Atal and paid tributes to him. pic.twitter.com/UQUm7K3eiC— Narendra Modi (@narendramodi) August 16, 2021
The 1990s saw the emergence of Vajpayee, a seasoned politician since the time of Nehru, who arrived center stage. Nehru once quipped that Atalji will become the prime minister of the country one day.
ABV took oath as prime minister for the first time in 1996, but had to resign within 13 days as BJP couldn't muster support. In 1998, the BJP-led NDA formed the government again with the support of smaller parties with ABV at the helm. However, this dispensation also lasted for just 13 months.
In the 1999 general elections, the BJP-led NDA won the elections and Vajpayee assumed office for the 3rd time. This was the first right of center government / first non-Congress government which lasted a full term.
Vajpayee’s era is known for bold economic reforms after Manmohan Singh introduced a policy of liberalisation in early 1990s as Finance Minister.
1. High GDP Growth
‘Narasimha Rao may have cut the ceremonial ribbon in 1991, but it was Vajpayee’s 6-year rule which did the gruelling groundwork to truly liberalise the economy and lay the foundations for the 8% growth that even the UPA benefitted from.’ – Praful Shankar, Turning Vajpayee into Nehru, Swarajyamag, 02 April, 2015.
2. Higher Disinvestment
The Vajpayee government started the privatisation of public sector units under the guidance of ‘minimum government, maximum governance’. Companies such as VSNL, Hindustan Zinc, CMC and Balco were privatized and funds raised were used to retire debt, for infrastructure projects and meeting social sector obligations.
Total funds raised during the period 200-04 under Vajpayee tenure was Rs 21,163 crore against a target of Rs 38,500 crore (55%). During the decade 1990-2000 only 37% of the disinvestment target was met.
3. Low Inflation
Vajpayee was able to control inflation which was in double digits when he assumed office (10%+ during 1990-98). During his entire tenure he brought down inflation to sub 5% levels thus bringing relief to the poor.
Source: RBI Annual Reports
4. Record National Highways Construction
Vajpayee launched two ambitious projects National Highway Development Project and Pradhan Mantri Gram Sadak Yojana to connect four metros and every village of the nation. During 1997-2002 (ninth five-year plan), when the NDA was in power, 23,814 km of national highways were added to the existing NH network.
This was nearly 50% of the total length of national highways constructed in three decades from 1980-2010. This remains the largest construction of national highways during any five-year period since independence.
5. New Telecom Policy
Vajpayee is also credited with ushering in the telecom revolution which led to significant drop in ISD/STD charges, free incoming calls on mobiles and increase of mobile penetration in the country.
6. High Job Creation
During the 5 years of NDA rule, around 60 million jobs were created as per NSSO (with some spill-over effect). This was one of the greatest achievements as the successor UPA government could generate only 25 million jobs during its rule.
All this was achieved by Vajpayee in spite of India suffering one of its gravest droughts in 2002, fifth in terms of overall magnitude. The all India rainfall deficiency was 19%.
No other drought in the past led to such a drop in food production as the 2002 drought. Foodgrain production dipped by 38 million tonnes to 175 million tonnes in 2003 versus 213 million tonnes in 2002.
The foodgrain production in 2004 was restored to 2002 levels due to the support provided by the BJP government to farmers and a normal monsoon.
Despite the good track record on the economic front, BJP led NDA lost the 2004 general elections which came as a surprise to analysts/pundits. NDA won 189 seats (-110) and recorded a loss of vote share of 5%. On the other hand, UPA won 225 seats (+86), recording an increase in vote share of 2%.
There is a consensus among economists that Vajpayee laid the foundation for the 8% average GDP growth achieved during UPA’s tenure.
Vajpayee exhorted India to dream big and his legacy is one of the guiding lights of Prime Minister Narendra Modi’s vision of India becoming a $5-trillion economy by 2025.
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