The high point of the Vajpayee era

The singular contribution of the Vajpayee government to the Indian economic reform process was the privatisation of public sector enterprises, says the author in the concluding part of the series

Another major courageous reform undertaken during the Vajpayee period was the significant reduction in small savings interest rates. While nominal levels of small savings interest rates had been changed over the 1990s, a significant decline in inflation since the mid-1990s meant a large increase in real interest rates on these popular savings instruments widely used by the middle- and low-income classes. High real interest rates on savings accounts constrained the downward movement of both market and bank interest rates along with policy rates set by the Reserve Bank, thereby severely constraining the resurgence of economic activity and investment. 

Finance Minister Yashwant