New Delhi: India’s efforts to realize its full potential and the race to overtake the world’s fifth largest economy, the UK, has strong links to the key policies set in motion at the beginning of this decade by the first National Democratic Alliance (NDA) government led by former Prime Minister Atal Bihari Vajpayee.

Vajpayee, according to experts, set policy priorities that unleashed private sector growth, brought fiscal discipline into focus, promoted consumption and physically connected India through cross-country highways.

Tuesday is the 94th birthday of the former prime minister, who passed away in August after prolonged ill health.

Vajpayee’s term between 1999 and 2004 is the starting point of many reforms whose fruits are visible now, said Pronab Sen, former chief statistician of India. “That was a remarkable period of policy making. The former PM empowered his ministers and officials and brought back the emphasis on planning," said Sen. Sen, who was with the erstwhile Planning Commission, helping to prepare the tenth Five- Year Plan, which was implemented in 2002-2007, said two of the great policy priorities of the Vajpayee government were building rural roads and electricity reforms.

FRBM Act

One of Vajapyee’s major policy decisions was the introduction of the Fiscal Responsibility and Budget Management (FRBM) Act of 2003, which sought to bring discipline in government spending and limit the fiscal deficit under 3% of gross domestic product (GDP) by 2008. Due to the global economic crisis, which warranted a fiscal stimulus in the final years of that decade, India went off the target, but limiting fiscal deficit and public debt remain a policy goal.

Connecting India

Infrastructure projects got a priority during the Vajpayee years which later governments have maintained. The Golden Quadrilateral project made transportation easy between Chennai, Kolkata, Mumbai and Delhi through a network of highways, while the “Pradhanmantri Gramin Sadak Yojana" linked remote villages across the country.

Telecom policy

Vajpayee rolled out a new telecom policy, which put an end to the government’s monopoly in international calls and encouraged competition in the sector. Telecom is one of the success stories of India’s private sector.

Power sector reforms

The Electricity Act of 2003 reformed the power sector, promoted private participation and competition in the sector. Suresh Prabhu, who was the power minister in Vajpayee’s cabinet, remembers him as a “great leader and an exceptional human being". Prabhu said in a Twitter post on Tuesday that Vajpayee’s prime ministership laid the foundation for a forward looking and strong India.

Interest rate

Under Vajpayee’s leadership, finance minister Yashwant Sinha made the politically bold and difficult decision to reduce administered interest rates—the interest rate guaranteed on provident fund investments and small savings. That set in motion a low interest rate regime promoting investments and economic activity.

Disinvestment

Vajpayee created a separate disinvestment department in the finance ministry in 1999. Vajpayee’s term saw the disinvestment of companies such as Bharat Aluminium Co. Ltd (Balco), Hindustan Zinc Ltd and Videsh Sanchar Nigam Ltd. The NDA government today follows the policy of privatizing loss-making enterprises while allowing profit-making ones to tap the market for their capital requirement.

India overtook France to become the world’s sixth-largest economy in 2017, according to the World Bank’s updated figures published in July. India is now a $2.597 trillion economy, just above France’s $2.582 trillion. Japan, Germany and the UK occupy the third, fourth and fifth places.

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