In India’s parliamentary system, the PM is the chief architect of economic policy direction. A PM-wise approach reveals how ideology, political context, institutional capacity, and global conditions interact to shape outcomes. UPSC frequently frames questions around specific policy eras (planning, liberalisation, reform continuity) that map directly onto PM tenures. This framework enables analytical, evaluative answers rather than mere chronology.

A term coined by economist Raj Krishna describing India’s sluggish GDP growth of ~3.5% p.a. during the Nehru-Indira era (1950s–80s). Despite the name, it had nothing to do with religion — it was a critique of policy choices: over-regulation, import substitution, PSU inefficiency, and the Licence-Permit Raj. Growth accelerated only after liberalisation in 1991.

P.V. Narasimha Rao as Prime Minister and Manmohan Singh as Finance Minister initiated the LPG reforms in July 1991. Rao’s political courage was remarkable — he led a minority government with no popular mandate for reform, yet implemented the most comprehensive economic transformation since independence. The reforms were crisis-driven (BOP crisis, forex at 2 weeks of imports) but strategically designed.

Vajpayee’s key contributions were: the Golden Quadrilateral highway project (transformative infrastructure), strategic disinvestment of loss-making PSUs (BALCO, Hindustan Zinc), the FRBM Act (institutionalised fiscal discipline), the New Telecom Policy 1999 (mobile revolution), and continued economic liberalisation. He proved that reform continuity was possible across political divides — a critical lesson for Indian political economy.

“Policy paralysis” refers to the slowdown in decision-making during Manmohan Singh’s second term (2009–2014). Corruption scandals (2G spectrum, coal allocation), coalition politics, and a cautious approach to reform created a perception that the government had lost momentum. GDP growth decelerated from ~8.5% to ~5%, inflation remained high, and the current account deficit widened. However, UPA-II also passed significant legislation — the Food Security Act and Land Acquisition Act.

The three most structurally significant reforms are: GST (2017) — unified India’s indirect tax system, creating a single national market; Insolvency & Bankruptcy Code (2016) — transformed how stressed assets are resolved, improving credit culture; and the JAM Trinity (Jan Dhan + Aadhaar + Mobile) enabling Direct Benefit Transfer that has dramatically reduced welfare leakages. Demonetisation (2016) remains highly contested. PLI schemes for manufacturing and massive infrastructure investment are ongoing initiatives.

Yes — this is a crucial UPSC insight. Both Congress and BJP-led governments have advanced reforms when in power. Rao (Congress) initiated LPG; Vajpayee (BJP) continued with infra and disinvestment; Manmohan (Congress) presided over the highest growth phase; Modi (BJP) implemented GST and IBC. The content of reform has been remarkably continuous across party lines. Political rhetoric may suggest sharp differences, but actual economic policy shows more continuity than discontinuity.

Employment generation — no PM has solved this. Manufacturing has remained stuck at ~15–17% of GDP (vs 28–30% in China), failing to absorb surplus agricultural labour. Services create high-value but limited jobs requiring skills most Indians lack. ~90% of employment remains informal. India’s demographic dividend will become a demographic disaster without massive, employment-intensive growth — making this the defining economic challenge regardless of who leads the government.

First-generation reforms (1991–2004, Rao/Vajpayee): Macro stabilisation, delicensing, trade liberalisation, FDI opening — relatively easier as they involved removing controls. Second-generation reforms (ongoing): Land and labour law reform, agricultural market reform, governance quality, judicial reform, education/healthcare transformation — far harder as they require building new institutions and overcoming entrenched political interests. GST and IBC represent successful second-gen reforms; land and labour reform remain incomplete.

Indira Gandhi’s impact was profound but deeply contested. Positive: Bank nationalisation (1969) democratised credit access; the Green Revolution achieved food self-sufficiency; poverty alleviation became a central policy focus. Negative: MRTP/FERA deepened the Licence Raj; centralisation of economic power stifled private enterprise; fiscal deficits expanded; growth remained sluggish. Her legacy reflects the equity vs efficiency trade-off — she prioritised social justice but at the cost of dynamism and growth.

The crisis was caused by internal structural weaknesses accumulated over decades (chronic fiscal deficits exceeding 8% GDP, unsustainable external borrowing, PSU losses) compounded by external shocks (Gulf War spiked oil prices, Soviet collapse disrupted trade) and political instability (three PMs in two years). By June 1991, forex reserves covered barely two weeks of imports. India pledged 47 tonnes of gold and sought an IMF emergency loan — creating the conditions for the Rao-Manmohan LPG reforms.

Yes — PM-linked economic questions are perennial across GS-II, GS-III, Essay, and Interview. They appear directly (planning vs market, 1991 reforms, welfare models) and indirectly (industrial policy, fiscal management, inclusive growth). UPSC increasingly expects analytical, evaluative, comparative answers — not just listing policies but assessing outcomes, comparing approaches across PMs, and linking to contemporary relevance. The comparative table and dialectical framework in this material are directly usable in Mains.