Ever heard of the M Document?
It might sound mysterious, but it's actually one of the most fascinating pieces of India’s economic story
In the late 1980s, India's economy was growing slowly, at about 3-4% per year, unlike booming countries like South Korea, Taiwan, and China which opened up their markets, reduced restrictions, and focused on exports, becoming major global players.
But India had high import taxes, controlled prices, and kept a strong currency, making its goods less competitive.
Montek Singh Ahluwalia, an economist in govt of India, saw that India needed to make some big changes to keep up.
So, he started working on what would become the M Document—a report that explained what India needed to do to unlock its economic potential.
It wasn’t just a list of recommendations; The M Document suggested bold reforms like lowering import controls and taxes and reducing the “License Raj” and adjust the exchange rate
The M Document wasn’t exactly welcomed with open arms. Many government officials thought these ideas were too radical.
Change can be scary, and India has always been cautious with its economy.
The Planning Commission and others were worried that opening up too fast might backfire.
Then, something unexpected happened: the M Document got into the hands of journalist Ashok Desai, who saw its potential, and gave it the now-famous name, the M Document.
Even though the document was just meant for internal review, the leak sparked public debate on how India’s economy could be modernized.
Though it didn’t lead to immediate changes, the M Document planted seeds that grew in a few years.
In 1991, facing a severe financial crisis with almost empty foreign currency reserves, Finance Minister Dr. Manmohan Singh implemented many of the M Document's ideas.
The rupee was devalued, import taxes were reduced, restrictions were lifted, and foreign investment was welcomed.
These changes brought stability and growth, setting India on a path to becoming one of the world’s largest economies.
In this episode of the NEON Show, Montek Singh Ahluwalia, a renowned economist and former Deputy Chairman of India's Planning Commission, shares insights from his pivotal role in shaping the 1991 economic reforms and reveals the behind-the-scenes story of the influential "M document" and how it ultimately shaped India’s approach to liberalisation.
Check out Montek Singh Ahluwalia’s book, BACKSTAGE: The Story behind India’s High Growth Years, [ Ссылка ]
00:00 - Trailer
02:30 - Introduction to Mr. Montek Singh Ahluwalia
03:34 - Early life and family’s experience post-partition
07:41 - Winning the Rhodes Scholarship
08:44 - Early career at the World Bank
09:45 - Returning to India as an economic advisor
11:32 - Washington invitation and Planning Commission role
15:32 - 1991 economic reforms
21:10 - Committees for economic reform
24:30 - High import controls as an economic issue
28:04 - Challenges in policy reform
31:08 - V.P. Singh asks Montek to write the document
34:06 - How did the “M document” leak
41:10 - Maruthi engine block story
51:05 - SEBI and financial system reforms
1:00:55 - Moving past the “Tonga mindset.”
1:03:50 - Why controlled imports are tax on exports
1:11:30 - How do exchange rates impact imports and exports?
1:14:34 - Discovery of Roman gold coins in South India
1:19:20 - Narayana Murthy’s import struggles
1:24:55 - Politicians should openly support beneficial policies
1:35:25 - Montek’s vision for India’s next decade
1:42:28 - Final thoughts on India’s future
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This video is for informational purposes only. The views expressed are those of the individuals quoted and do not constitute professional advice.
