Fruits of reforms are often reaped by later governments: Shankar Acharya

How did the macroeconomic imbalance reach the tipping point in 1991? When I joined the finance ministry as an economic adviser in 1985, we were not in a very happy macroeconomic situation. The central government’s fiscal deficit was rising for a variety of usual reasons, such as not having enough buoyancy in revenues and high levels of expenditure. On the external side, it was an even more difficult situation. Our trade policy was complex, to put it politely, with absurdly high Customs tariffs and a very detailed import licensing system. Imports, especially of oil, were rising, while exports suffered due…