India changes gear in 1991

Updated 25th March, 2014

In 1991, Brazil was 10 and Russia 7 in nominal GDP. And in 2009, Brazil was 10 and Russia 13. So whereas Brazil and Russia have see-sawed a little, both China and India have moved steadily up the ranks.

Note: It used to be BRIC, since 2010 it has become BRICS to include South Africa

India has benefited from the end of the Cold War and glasnost, in a sense the change to The World is Flat as explained by Tom Friedman. Indian reforms from a state-controlled, highly bureaucratic system began with the second return to power of the National Congress Party in 1991 and the appointment of Manmohan Singh as Prime Minister. India was number 16 in GDP then (China was number 11). India joined the WTO in January 1995. By the end of 2009 India was at number 11.

After six years in wilderness (for second time after independence) National Congress Party won again in 1991. Sonia Gandhi was seen as the natural successor to her assassinated husband Rajiv and her assassinated mother-in-law Indira. But for the good of the country and having a deep grasp or realpolitik, she stepped aside for Dr Manmohan Singh to lead Congress, and take over the post of Finance Minister. Prime Minister P V Narismha Rao started economic reforms, led by Manmohan Singh.

Dr Singh graduated from Punjab University in Chandigarh. He later studied economics at Cambridge and Oxford Universities where he gained a PhD. Before taking up his Indian position he worked for the World Bank.

Peak growth since then has varied between 5.5 and 10+%; 2009 est: 5.5 to 6.5% (IMF).

2004: India in overdrive

Manmohan Singh took over as Prime Minister, when Congress won with a majority in 2004. India has lower economy than China and growing slower. Because of this delayed start some economists regard India as ‘China 15 years ago’ It is a deregulating Planned Economy, opening up numerous SEZs.

India is still growing, with continuing demand for raw materials and quality products and services. But cost of commodities, wages & inflation are rising. Property is booming. And fuel is increasing cost of transport.

India is increasing trade with Africa to gain commodities and political goodwill. But China is way ahead in value of investments, energy contracts and infrastructure projects.

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