Reserve Bank of India: The real hero of the 1991 economic reforms

The three governments of that decade - the Congress, the United Front, and the National Democratic Alliance - went along because whatever the RBI did had no impact on votes

July 1991 is seen as the month when major economic reforms were announced under great duress. So the political consensus on them broke down as early as September 1991, when the reduction in fertiliser subsidy on just one item, urea, had to be abandoned. The price increase was just Rs 1! The finance minister even offered to resign.

So how did reforms progress throughout the 1990s? Truth be told, it wasn’t the government but the Reserve Bank of India (RBI) that is the real hero of the reforms of the ’90s. The three governments of that decade — the Congress,