Centre Commends Former Prime Minister Manmohan Singh in Supreme Court

New Delhi: The BJP-led central government on Wednesday praised former Prime Minister PV Narasimha Rao and his then-Finance Minister, Manmohan Singh, for their instrumental roles in initiating economic liberalization in 1991. During a hearing in the Supreme Court, Solicitor General Tushar Mehta lauded the duo's efforts, stating that their reforms effectively dismantled the 'licence raj' and opened up the Indian economy. 

Mehta informed a nine-judge bench, headed by Chief Justice DY Chandrachud, that the economic reforms introduced by Rao and Singh in 1991 played a pivotal role in liberalizing various laws, including the Company Law and the Trade Practices Act MRTP. However, he highlighted that subsequent governments over the following three decades did not see the need to amend the Industry (Development and Regulation) Act, 1951.

The response came after the bench criticised of the IDRA, 1951, describing it as archaic and indicative of the restrictive policies of the 'licence raj' era.

Despite the transformative changes ushered in by economic reforms, Mehta emphasized that the IDRA continued to grant the Centre significant control over various industries. He highlighted that the withdrawal of government control over industries did not signify a lack of regulatory authority. 

The solicitor general underscored the importance of regulatory authority, citing the example of industrial alcohol regulation during the pandemic. He argued that the Union government's ability to regulate industries, particularly in the production of hand sanitizers, ensured a robust response to the crisis.

In 1991, faced with a foreign reserves crisis, the Narasimha Rao-led government introduced three transformative economic reforms: globalization, liberalization, and privatization. The government's commendation of Rao and Singh's contributions underscores the recognition of their historic role in shaping India's economic trajectory.

Mehta further clarified that the Centre's withdrawal from controlling industries did not indicate a lack of regulatory authority. He stressed that the Centre retained the power to regulate industries in the national interest, particularly during emergencies like the Covid-19 pandemic. Mehta elaborated that had the Union government not had the authority to regulate industrial alcohol, especially for producing hand sanitizers during the pandemic, the robust response to the crisis would have been compromised.