Opinion | Indian Economy Under the Leadership of Atal Bihari Vajpayee
Opinion | Indian Economy Under the Leadership of Atal Bihari Vajpayee
Vajpayee’s governance was marked by a steadfast dedication to stability, economic expansion, and modernisation, laying the foundation for a stronger and more prosperous India

Atal Bihari Vajpayee has consistently demonstrated his benevolent leadership by discerning the dichotomy between personal and political affairs. Even during his absence from office, he served as a representative of the Government of India. Vajpayee, as the leader of the Opposition, led a delegation to Geneva in 1994 to reject a resolution put forth by our neighbouring country, which challenged India’s sovereignty over Kashmir.

During his political career, Atal Bihari Vajpayee, the founder of the Bharatiya Janata Party (BJP), served as a member of the Lok Sabha on ten occasions. In addition, he was elected to the Rajya Sabha on three separate occasions. He achieved a historic milestone by becoming the first Prime Minister of India who did not belong to the Congress party and successfully completed a full term in office. Nevertheless, he maintained unwavering ethical standards. He held the belief that if one’s political views were rational and well-founded, they would garner support from others.

Vajpayee is credited with originating the expression ‘Jai Jawan, Jai Kisan, Jai Vigyan’. He promoted the idea of reconciling with the Opposition and fostering respect and agreement with allies. He headed a coalition government consisting of 24 political parties. Vajpayee was appointed as the foreign minister when Morarji Desai’s government was formed after the Emergency. Vajpayee became the foreign minister and subsequently became the first leader to deliver a speech in Hindi at the United Nations General Assembly (UNGA).

Under his leadership, India experienced a significant and far-reaching change in both its economic and infrastructural sectors. Vajpayee’s governance was marked by a steadfast dedication to stability, economic expansion, and modernisation, laying the foundation for a stronger and more prosperous India. The NDA government, led by Vajpayee, responded to the economic crisis in 1996 by implementing significant reforms in the industrial and economic sectors. These reforms marked the continuation of the second phase of economic reforms, which began in 2000-01. The Vajpayee government implemented measures such as disinvestment, international joint ventures, capital market liberalisation, Greenfield ventures, and increased tax devolution for states. The Indian Penal Code (IPC) underwent the abolition of outdated laws and the implementation of reforms.

A Political Visionary

The BJP had been in Opposition for 40 years when Vajpayee took over as prime minister for the first time in 1996. The general elections of 1996 saw the BJP emerge as the single largest party, winning 161 seats. Shankar Dayal Sharma, the president at the time, invited Vajpayee to form the administration. This was the first prime ministership held by Atal Bihari Vajpayee. The BJP-led alliance could reach 194 with the backing of allies like George Fernandes’ Samata Party, Shiv Sena, Akali Dal, and Haryana Vikas Party (HVP).

To pass a majority, 78 MPs were still needed. This was the time when the majority of political parties viewed the BJP as “untouchable”. In 13 days, he was compelled to step down. Vajpayee could have resigned directly to the President, knowing that he would be unable to demonstrate his majority. However, he would have rather moved a motion of confidence in the Lok Sabha.

Second time PM of India

He was a political visionary who aimed to eradicate the problem of untouchability that the BJP was grappling with. Vajpayee sought to leverage this defeat as a springboard for future success. He strategically utilised the trust vote as a means to pave the way for the BJP to engage in coalition politics in the future. He successfully accomplished his objective through his speech. The concept proved successful for him due to his exceptional oratory skills.

The BJP achieved the formation of a primary alliance for the first time. Subsequently, he formed alliances with the Lok Janshakti Party, DMK, National Conference, Jammu and Kashmir People’s Democratic Party, Telugu Desam Party, Biju Janata Dal, and Trinamool Congress during his political career. The National Democratic Alliance (NDA) was formed prior to the 1998 Lok Sabha elections.

The NDA, led by the BJP, assumed power. Vajpayee astounded observers by conducting a series of five subterranean nuclear tests at Pokhran on 11 and 13 May 1998.

Third Time PM of India

In 1999, Vajpayee assumed the position of prime minister for the third time, forming a coalition government consisting of 13 political parties. He was sworn in as the prime minister on October 13, 1999. On this occasion, his administration successfully served a full five-year term. He was the inaugural non-Congress prime minister to serve a full term in office. The Vajpayee administration implemented numerous significant measures that permanently altered the state and trajectory of Indian politics.

Vajpayee prioritised the development of the country’s infrastructure. He implemented the Golden Quadrilateral Scheme, which connected the cities of Chennai, Kolkata, Delhi, and Mumbai through a network of highways. Additionally, he strengthened rural areas through the Pradhan Mantri Gram Sadak Yojana, which focused on improving the economy of both urban and rural areas. In addition, his government also granted children the fundamental right to education.

Crucial Decisions that Revolutionised the Economy

The praiseworthy endeavours that Vajpayee executed in order to bolster the Indian economy function as a forerunner to the present course of economic progress. At the time of his resignation, the GDP was recorded at 8.4 per cent, foreign exchange reserves were in a favourable condition, and inflation remained below 4 per cent. In subsequent years, it is evident that the UPA-I administration was blessed with favourable economic conditions.

The foreign exchange reserves experienced a significant increase from $32.4 billion in 1998 to an impressive $113 billion in 2003-04, along with consecutive current account surpluses. In 2003-04, India experienced a 7.2 per cent increase in output growth and an 8.2 per cent increase in GDP growth rate. The foreign exchange reserves increased from $32.4 billion in 1998 to $113 billion in 2003-04, accompanied by a surplus in the current account from 2001 to 2004.

Vajpayee’s economic policies resulted in a substantial reduction in the inflation rate, declining from 13.23 per cent in 1998 to 2.5 per cent in 2002-03. In 1999, India experienced an inflation rate of 3.1 per cent, which was its lowest in 18 years, despite the ongoing India-Pakistan War.

Under Vajpayee’s leadership, the government prioritised the development of small-scale industries and implemented policies that specifically benefitted rural artisans. The production witnessed a significant surge from Rs 1,57,525 in 1998-99 to Rs 3,36,344 in 2003-04, demonstrating a substantial growth of Rs 1,78,819 during the tenure of the NDA.

The industrial production growth rate increased from 4.1 per cent in 1998-99 to 6.9 per cent in 2003-04. During the same period, the automobile sector witnessed a substantial growth from 5.4 per cent to 15.1 per cent.

Vajpayee skilfully employed economic reforms to establish the basis for vital infrastructure through the implementation of the National Highway Development Policy (NHDP) and National Telecom Policy (NTP) in 1999. The NHDP, initiated in 1998, had the objective of enhancing, restoring, and advancing roads to meet international benchmarks. In March 2004, a total of 6,909 kilometres of national highways were either completed or under construction. Of this, 3,200 kilometres were already completed, while 3,709 kilometres were still under construction. The Golden Quadrilateral Highway Project, initiated in 2001, faced initial criticism but ultimately became the lengthiest road project in India, efficiently linking major metropolitan areas within a short span of time.

Vajpayee’s focus on infrastructure encompassed rural connectivity as well, which was addressed through the initiation of the Prime Minister Grameen Sadak Yojana (PMGSY) in the year 2000. During his time in office, road connectivity projects were implemented in Left Wing Extremist Areas (LWE), resulting in the completion of 51,511 km of roads. In 2003-04, the road network in India grew to 36.22 lakh km, which is a testament to the efficient governance of the Vajpayee government.

The National Telecom Policy, introduced in 1999, had the objective of providing accessible and efficient telecommunication services to everyone, resulting in a significant rise in the number of telephone users. The telephone subscriber count experienced a significant growth of 267 per cent in a span of six years, from 14.88 million in 1997 to 54.61 million in 2003.

In addition, it established a telecommunications infrastructure consisting of over 25 million telephone lines that spanned across 300 cities, 4869 towns, and 310897 villages, ranking the Indian telecommunications network as the ninth largest globally. The number of subscribers grew to 3.27 million during the initial ten months of the fiscal year (2001), representing an additional growth of approximately 74 per cent.

Connectivity emerged as a crucial foundation of the government’s strategy for promoting financial inclusion, playing a significant role in the JAM (Jandhan, Aadhaar, Mobile) plan. India’s telephone penetration rate has transitioned from low single digits to a substantial level. A notable policy initiative enacted during Vajpayee’s tenure was the Fiscal Responsibility and Budget Management (FRBM) Act, which was signed into law in 2003. The objective of this legislation was to encourage prudence and accuracy in government spending, which led to a reduction in public sector savings by -0.8 per cent of the GDP during the 2000 fiscal year. In juxtaposition, the proportion had escalated to 2.3 during the fiscal year 2005.

Under his leadership, the government established industrial parks, specialised export processing zones, and information technology centres in an effort to increase industrial output and exports. This undertaking significantly contributed to the establishment of the groundwork for the effective execution of the ‘Make in India’ initiative. The implementation of credit bureaus and Asset Reconstruction Companies (ARCs) during the Vajpayee administration represented an initial endeavour to aid banks in the management of non-performing assets.

Notwithstanding its lack of success in 2004, Vajpayee’s ‘India Shining’ campaign functioned as a precursor to the subsequent NDA government regime. The results of this campaign are universally apparent, as it has prompted substantial progress in numerous sectors, including education, foreign direct investment (FDI), infrastructure, and the economy. Vajpayee garnered widespread admiration for his personal qualities in addition to his astute leadership and diplomacy. Even those with whom he disagreed held him in the highest regard.

Vajpayee possessed a generous disposition that welcomed individuals of all religions, castes, and regions. Vajpayee’s legacy is a clear demonstration of the revitalisation of the economy and the advancement of infrastructure. The transformative impact of his visionary guidance is demonstrated by the fact that India was able to successfully overcome economic challenges and make significant progress towards becoming a more prosperous nation while he was in charge.

The author is Associate Professor, Atal Bihari Vajpayee School of Management and Entrepreneurship, Jawaharlal Nehru University (JNU), New Delhi. He tweets @bkt_brajesh. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect News18’s views.

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