# India's Backwards Liberalization: Why Elite Priorities Got It Wrong
I was not aware that there were conspiracy theories about Indians losing their gold in the 90s. Honestly, I'm not that surprised. Indians are very sentimental when it comes to gold. When I was growing up in the 2000s, there were a bunch of melodramatic Bollywood movies where basically the worst thing you could do to your family was to use your mom's jewelry as collateral. I always found it strange. Like the main character didn't even lose it—he just collateralized it. What the hell, mate.
The transition to freer markets in India is a lot more complicated than just the push by the IMF. Manmohan Singh had been writing about the failures of the old license Raj system since the late 60s. I think you can find a lot of his old papers online. In the 80s there was Rajiv Gandhi who did some very modest pro-business reforms, allowing imports of computers and such. But obviously everyone around him was still socialist, so they were still creating more state-owned enterprises back then.
What was particularly impressive around the 90s and 2000s was that Rao and Singh did such dramatic reforms in a coalition government. He even tried to increase federalism in India. They and their successor governments, which were also coalitions, did much more to accelerate liberalization than the IMF demanded. The Indian prime minister was clearly in the driver's seat and not just taking orders from the IMF.
I would recommend you look up Singh's 1991 budget speech. This doesn't have the victimhood nor the cowardice that you see in modern-day "Global South" leaders. The Modi decade in relation has been relatively less dramatic in comparison. Although he talked big game about privatization, other than the airline privatization, he mostly chickened out for the rest.
An often underexplored fact was how strange India's liberalization agenda was. In most post-communist countries, liberalization was concentrated in agriculture, low-skill manufacturing, and construction while more white-collar professions were insulated from free markets—like China and Bangladesh. Instead, in India you see liberalization concentrated in more white-collar and asset-heavy investments like telecoms, airports, private equity, etc. Agriculture in India is still mostly a shit show.
In fact, private equity was so regulated in Bangladesh that the government gave up and created their own state private venture capital fund to get the software startup ecosystem going. This kind of shows Indian elites have a big problem with pursuing Western fads instead of focusing on their own problems. They spend too much time on renewable energy or plastic straws or LLM stuff instead of hiring more judges and stopping teacher absenteeism.
Using your mom's jewellery as collateral is roughly like raiding your parents' retirement fund. The implications are similar, and hence the sentiments associated with it.
The hard reforms were executed primarily by Prime Minister PV Narsimha Rao. Since he became persona non grata for the family that rules his political party, Rao became a political orphan after his term ended, and consequently Dr Manmohan Singh's role in pushing those reforms through was exaggerated at his expense.
Dr Singh was a bureaucrat. He had zero political heft or wiles to get any of the reforms through parliament.
Narsimha Rao, not Singh, was India's Deng Xiaopeng.
Regarding the "IMF stole Indian gold" idea: I've noticed that Indians online tend to be hypernationalists, prone to blaming foreigners at every opportunity, especially the US for some reason.
# India's Backwards Liberalization: Why Elite Priorities Got It Wrong
I was not aware that there were conspiracy theories about Indians losing their gold in the 90s. Honestly, I'm not that surprised. Indians are very sentimental when it comes to gold. When I was growing up in the 2000s, there were a bunch of melodramatic Bollywood movies where basically the worst thing you could do to your family was to use your mom's jewelry as collateral. I always found it strange. Like the main character didn't even lose it—he just collateralized it. What the hell, mate.
The transition to freer markets in India is a lot more complicated than just the push by the IMF. Manmohan Singh had been writing about the failures of the old license Raj system since the late 60s. I think you can find a lot of his old papers online. In the 80s there was Rajiv Gandhi who did some very modest pro-business reforms, allowing imports of computers and such. But obviously everyone around him was still socialist, so they were still creating more state-owned enterprises back then.
What was particularly impressive around the 90s and 2000s was that Rao and Singh did such dramatic reforms in a coalition government. He even tried to increase federalism in India. They and their successor governments, which were also coalitions, did much more to accelerate liberalization than the IMF demanded. The Indian prime minister was clearly in the driver's seat and not just taking orders from the IMF.
I would recommend you look up Singh's 1991 budget speech. This doesn't have the victimhood nor the cowardice that you see in modern-day "Global South" leaders. The Modi decade in relation has been relatively less dramatic in comparison. Although he talked big game about privatization, other than the airline privatization, he mostly chickened out for the rest.
An often underexplored fact was how strange India's liberalization agenda was. In most post-communist countries, liberalization was concentrated in agriculture, low-skill manufacturing, and construction while more white-collar professions were insulated from free markets—like China and Bangladesh. Instead, in India you see liberalization concentrated in more white-collar and asset-heavy investments like telecoms, airports, private equity, etc. Agriculture in India is still mostly a shit show.
In fact, private equity was so regulated in Bangladesh that the government gave up and created their own state private venture capital fund to get the software startup ecosystem going. This kind of shows Indian elites have a big problem with pursuing Western fads instead of focusing on their own problems. They spend too much time on renewable energy or plastic straws or LLM stuff instead of hiring more judges and stopping teacher absenteeism.
Using your mom's jewellery as collateral is roughly like raiding your parents' retirement fund. The implications are similar, and hence the sentiments associated with it.
The hard reforms were executed primarily by Prime Minister PV Narsimha Rao. Since he became persona non grata for the family that rules his political party, Rao became a political orphan after his term ended, and consequently Dr Manmohan Singh's role in pushing those reforms through was exaggerated at his expense.
Dr Singh was a bureaucrat. He had zero political heft or wiles to get any of the reforms through parliament.
Narsimha Rao, not Singh, was India's Deng Xiaopeng.
Thanks I made the edit. I said Rao was India's Deng. Thank you!
Regarding the "IMF stole Indian gold" idea: I've noticed that Indians online tend to be hypernationalists, prone to blaming foreigners at every opportunity, especially the US for some reason.