Articles

5 major economic decisions under PM Atal Bihari Vajpayee

Publish Date: 17th August, 2018

Former Indian Prime Minister, Atal Bihari Vajpayee passed away at the AIIMS hospital on 16 August. He was 93 years old. He is considered to be an exceptional statesman and an orator par excellence. And the policies he implemented during his tenure as the Prime Minister have paved the way for economic growth in the country.

Here are 5 major economic decisions taken during the Vajpayee government that shaped the Indian economy.

1) Golden quadrilateral highway project

Vajpayee’s vision to connect the North-South and the East-West gave birth to the largest highway project in India. The Golden Quadrilateral or GQ covers a length of 5,846 kilometres and consists of four and six lane highways. This highway network connects Delhi, Mumbai, Chennai, Kolkata and a host of major industrial, agricultural and economic centres like Bengaluru, Ahmedabad, Jaipur, Vijayawada, Vizag and Cuttack. Many companies have benefitted immensely because they have been able to meet customer orders at a much faster rate. In addition, the highways have also opened up new untapped markets along the GQ for different companies.

2) Telecom reforms

The former Prime Minister is considered by many as the father of modern telecommunication in the country. He was responsible for ushering in the National Telecom Policy in 1999 that expanded the telecommunication sector in India. The new telecom policy allowed private companies to expand operations and invest in infrastructure. As a result, government monopoly ended, call tariffs reduced and the quality of telecommunication vastly improved.

Also read: 4 things to know about the Idea-Vodafone merger

3) The FRBM Act

The National Democratic Alliance (NDA) under Vajpayee enacted a new law known as the Fiscal Responsibility and Budget Management (FRBM) Act. The goal of this act was to maintain fiscal deficit under 3%. In addition, the act also aimed to introduce transparent fiscal management systems and ensure fiscal stability in the long run. This law brought about a great degree of accountability and responsibility with regard to the country’s finances.

Also read: Five things to know about Reliance Jio’s impact on Indian telecom

4) PSU disinvestments

Disinvestment of Public Sector Undertakings (PSUs) began under the leadership of PV Narasimha Rao. However, it was Vajpayee who gave a new meaning to PSU disinvestment by privatising many PSU entities. In fact, the NDA government created an entire ministry helmed by Arun Shourie solely for this purpose. Maruti Udyog, Bharat Aluminium, Hindustan Zinc, Indian Petrochemicals, and Modern Food Industries among other companies were sold to private firms. The five-year rule of Vajpayee between 1999 and 2004 is considered as the golden period of privatisation.

Also read: 5 ways PSU banks can fund their capital needs

5) Dismantling of the Administrative pricing mechanism for fuel prices

From the 1970s to the early 2000s, petroleum products in India were governed by the Administered Price Mechanism (APM). This system gave the state run oil marketing companies the power to price petroleum products like diesel and petrol. In 2002, the Vajpayee government dismantled the APM and set the course for the deregulation of petrol prices. This was finally achieved in June 2010. Four years later, diesel prices too were deregulated by the government in October 2014.

Also read: 6 effects of rising crude oil prices on the Indian economy

Conclusion

Vajpayee was the Prime Minister of the country for a single five-year term but during his tenure, he implemented many important decisions that paved the way for economic growth and development in the country. He shall always be remembered as a great visionary leader who achieved a lot on the legislative as well as the economic front.

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