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Reflecting on the 1991 Indian General Elections Amid 2024 Preparations

Context:

As India prepares for the 2024 general election, it is crucial to reflect on the pivotal 1991 Indian general elections, which marked a significant turning point in the country’s history. These elections brought about profound political and economic changes, driven by the leadership of PV Narasimha Rao and the impactful electoral reforms led by T N Seshan.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

  1. Key Electoral Reforms Introduced by T. N. Seshan
  2. Political Context of the 1991 Elections
  3. LPG Reforms (Liberalization, Privatization, and Globalization)

Key Electoral Reforms Introduced by T. N. Seshan

Background

  • Tirunellai Narayana Iyer Seshan served as the Chief Election Commissioner (CEC) from 1990 to 1996.
  • He initiated significant reforms that transformed the Indian electoral process.
Major Reforms
  • EPIC (Electors Photo Identity Card):
    • Introduced to prevent impersonation and bogus voting.
  • Model Code of Conduct (MCC):
    • Established in 1960, outlines guidelines for political parties during elections.
    • Seshan strictly enforced it, preventing the misuse of power and unfair advantages.
  • Election Commission Practices:
    • Identified and listed 150 electoral malpractices.
    • Cracked down on vote buying, bribery, voter intimidation, booth capturing, and the use of muscle power.
    • Banned excessive campaign spending and public displays.
    • Ensured the deployment of central police forces to maintain order and prevent violence.
    • Advocated for autonomous status for the Election Commission.
Impact on Elections

1991 Elections:

  • Conducted with unprecedented integrity and transparency.
  • Set new standards for future elections.
  • Achieved a turnout of 56.73%, reflecting genuine participation compared to previous elections marred by irregularities.
Transformation and Legacy

Role of Election Commission:

  • Transformed from a passive observer to an active enforcer of electoral laws.
  • Strengthened the autonomy and integrity of the Election Commission, ensuring free and fair elections.

Recognition:

  • Awarded the prestigious Ramon Magsaysay Award in 1996 for his contributions to electoral reforms and global standards of electoral integrity.

Political Context of the 1991 Elections:

  • Assassination of Rajiv Gandhi: In May 1991, Rajiv Gandhi was assassinated by a suicide bomber from the Liberation Tigers of Tamil Eelam (LTTE), creating a politically charged environment.
  • PV Narasimha Rao’s Appointment: Following Rajiv Gandhi’s death, PV Narasimha Rao was sworn in as Prime Minister on 21st June 1991.
Economic Reforms Under Rao’s Government:
  • Economic Crisis: India faced a potential sovereign default due to depleted foreign exchange reserves, worsened by the Gulf War (1991) which increased oil prices and reduced remittances.
  • Fiscal Deficit: The fiscal deficit reached 8% of GDP, with a current account deficit of 2.5%. Inflation rates were in double digits.
  • Foreign Exchange Reserves: Reserves fell below USD 6 billion, barely covering two weeks of imports.
Immediate Measures to Mitigate the Crisis:
  • Rupee Devaluation: On 1st July 1991, the rupee was devalued by 9% against major currencies, followed by an additional 11% devaluation.
  • Phased Devaluation: Rao chose phased devaluation to manage political and economic shocks.
  • Gold Pledging: The Reserve Bank of India (RBI) pledged gold with the Bank of England in July 1991, raising around USD 400 million.
  • Gold Sales: In May 1991, 20 tonnes of gold were sold to the Union Bank of Switzerland, raising approximately USD 200 million.
  • Emergency Loans: The government secured about USD 2 billion in emergency loans from the International Monetary Fund (IMF).

LPG Reforms (Liberalization, Privatization, and Globalization):

Liberalisation:
  • Licensing Process: Revamped to boost exports and link non-essential imports to exports.
  • Export Subsidies Removal: Introduced tradeable exim scrips for exporters.
  • End of Monopoly: Ended state-owned firms’ monopoly over imports, allowing private sector imports.
  • Licence Raj Dismantling: Relaxed Monopolies and Restrictive Trade Practices Act provisions to facilitate business restructuring and mergers.
  • Industrial Licensing Abolished: Except for 18 industries, irrespective of investment levels.
Privatisation:
  • FDI Approval: Automatic approval for foreign direct investment (FDI) up to 51%.
  • Public Sector Monopoly Restricted: To sectors critical for national security.
Globalisation:
  • Integration with Global Market: Encouraged international trade and investment.
  • Competitiveness of Exports: Indian exports became more competitive globally due to the massive devaluation of the rupee and new trade policies.
Impact of LPG Reforms:
  • Economic Growth: GDP increased from USD 270 billion in 1991 to USD 2.9 trillion in 2020.
  • FDI Inflows: Increased significantly, reaching USD 82 billion in 2020-21 from USD 97 million in 1991.
  • Industrial Growth: Promoted growth in IT, telecom, and automobile sectors.
  • Job Quality and Income Inequality: Concerns remained despite job creation and poverty reduction.
  • Global Integration: Increased trade and investment flows, with India’s share in global trade rising from 0.5% in 1991 to around 2% in 2022.

-Source: Indian Express


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