Manmohan Singh
Manmohan Singh (26 September 1932 – 26 December 2024) was an Indian economist and politician who served as the 14th Prime Minister of India from 22 May 2004 to 26 May 2014, leading United Progressive Alliance coalition governments.[1][2] Born in Gah village in undivided Punjab (now in Pakistan), he earned degrees in economics from Punjab University, the University of Cambridge, and Oxford University, and later held key roles including Governor of the Reserve Bank of India from 1982 to 1985.[2] As Finance Minister from 1991 to 1996, Singh dismantled much of India's socialist-era economic controls through liberalization measures outlined in his July 1991 budget speech, devaluing the rupee, reducing import tariffs, and ending the Licence Raj system that had stifled private enterprise and growth.[3] These reforms averted a balance-of-payments crisis and set the foundation for India's emergence as a major global economy, though they faced resistance from entrenched interests and required political backing from Prime Minister P. V. Narasimha Rao.[2] Singh's decade as Prime Minister initially delivered strong economic expansion, with GDP growth averaging over 8% annually in the mid-2000s, fueled by continued reforms, foreign investment inflows, and initiatives like the National Rural Employment Guarantee Act.[4] However, his second term from 2009 onward encountered decelerating growth, inflation pressures, and perceptions of administrative inertia, exacerbated by coalition dependencies that limited decisive action.[5] Notably, his government was beset by high-profile corruption scandals, including the 2G spectrum allocation irregularities estimated by the Comptroller and Auditor General at a presumptive loss of ₹1.76 lakh crore due to non-auctioned licenses, and the coal block allocation scam involving discretionary grants leading to alleged losses of ₹1.86 lakh crore, with Singh personally holding the coal portfolio during key decisions.[6][7] These episodes, investigated by the Central Bureau of Investigation and parliamentary committees, fueled accusations of cronyism and weak oversight, eroding public trust and contributing to the alliance's electoral defeat in 2014, despite Singh's personal reputation for integrity and technocratic expertise.[6][7] Singh, a soft-spoken Sikh who rarely sought the spotlight, died in New Delhi at age 92 after prolonged illness.[8]
Early life and education
Family background and childhood
Manmohan Singh was born on September 26, 1932, in Gah, a village in the West Punjab region of undivided British India (now in Pakistan's Chakwal district), into a Punjabi Sikh family of modest circumstances.[9][10] His father, Gurmukh Singh, worked as a cloth merchant and shopkeeper, while his mother, Amrit Kaur, managed the household; the family later moved to Peshawar where Gurmukh Singh took up employment as a clerk in a firm handling imports of dry fruits from Afghanistan.[11][12][13] These early years were marked by simple village life and limited resources, with Singh later recalling studying by candlelight amid the family's emphasis on self-reliance over material pursuits.[13][14] The Partition of India in 1947 profoundly disrupted Singh's childhood when, at age 15, his family fled communal violence and migrated as refugees to Amritsar in newly independent India, enduring significant hardships during the displacement of millions across the border.[15][16][17] Settling in a modest home in Amritsar, the family prioritized rebuilding through education, reflecting a cultural value placed on learning as a path to stability despite the loss of ancestral property and the trauma of separation from their homeland.[10][14] Singh's parents instilled in him and his siblings a focus on personal responsibility and academic diligence, shaping his resilient approach to adversity in the refugee context.[14][18]Academic training and early influences
Singh earned a Bachelor of Arts degree in economics with honours from Panjab University in 1952, followed by a Master of Arts degree in economics in 1954, achieving first-class honours and securing the top position in both examinations.[19][20] He then proceeded to the University of Cambridge, where he obtained a Tripos degree in economics with first-class honours in 1957.[2][21] At Cambridge, Singh was exposed to post-Keynesian economics through mentors such as Joan Robinson and Nicholas Kaldor, whose analyses emphasized government intervention for equitable growth and challenged neoclassical orthodoxy.[22][23] Kaldor's advocacy for export-led strategies and skepticism of free trade imbalances influenced Singh's early thinking, though these mentors' preference for planned economies contrasted with emerging empirical evidence favoring market signals over rigid controls.[24][25] In 1960, Singh enrolled at Nuffield College, Oxford, completing a Doctor of Philosophy degree in economics in 1962 under the supervision of Ian Little; his thesis examined India's Export Performance, 1951–1960, critiquing the inefficiencies of import-substitution policies and advocating export promotion for self-sustained growth.[26][27][28] This work highlighted causal links between protectionism—embodied in India's License Raj—and stagnant trade, presaging Singh's later rejection of socialist-leaning interventions in favor of evidence-based liberalization, diverging from the Keynesian orthodoxy of his Cambridge influences toward pragmatic, data-driven realism.[24][28]Pre-political professional career
Roles in Indian economic administration
Manmohan Singh entered public service in the Indian government in 1971 as Economic Adviser in the Ministry of Commerce, where he analyzed trade policies and export promotion strategies within the framework of India's import-substitution industrialization model.[2] [4] In this role, he contributed to assessments of industrial licensing and foreign trade regulations, drawing on empirical data to evaluate bottlenecks in a system reliant on quantitative restrictions and state-directed resource allocation.[29] Appointed Chief Economic Adviser in the Ministry of Finance in 1972, Singh served until 1976, providing advisory inputs on macroeconomic planning and fiscal policy amid the dominance of public sector enterprises, which accounted for over 70% of industrial output by the mid-1970s.[20] [30] In a 1972 review of economic literature on India's public sector, he acknowledged documented inefficiencies such as low capacity utilization and productivity lags but cautioned against wholesale privatization, advocating instead for targeted managerial reforms based on performance metrics.[31] His tenure involved preparing reports for the Planning Commission, critiquing over-reliance on administrative controls while operating within the socialist policy consensus that prioritized self-reliance over market mechanisms.[32] From November 1976 to April 1980, Singh held the position of Secretary in the Department of Economic Affairs, Ministry of Finance, overseeing aspects of public expenditure and external aid coordination during a period of fiscal strain exacerbated by oil shocks and low growth averaging 3.5% annually.[30] In April 1980, he became Member-Secretary of the Planning Commission, a role he held until 1982, where he facilitated the drafting of the Sixth Five-Year Plan (1980–1985), incorporating data-driven projections for sectoral allocations despite political pressures to maintain public sector reservations in key industries.[20] [33] These positions underscored his bureaucratic ascent through analytical rigor, often advocating incremental decontrol measures—such as easing select licensing requirements—grounded in econometric evidence, though constrained by entrenched interests in labor unions and state-owned enterprises that resisted efficiency-oriented changes.[34]International economic positions and scholarship
Singh worked at the United Nations Conference on Trade and Development (UNCTAD) secretariat in Geneva from 1966 to 1969, focusing on international trade policies and development economics for emerging economies.[2] This role exposed him to global debates on trade liberalization and the limitations of protectionist regimes in fostering sustainable growth.[20] From 1969 to 1971, Singh served as Professor of International Trade at the Delhi School of Economics, University of Delhi, where he taught courses on comparative trade advantages and empirical patterns in global commerce.[35] His academic output during this phase included analyses of export dynamics, notably his 1964 Oxford doctoral thesis India's Export Trends and Prospects for Self-Sustained Growth, which used data from 1951–1961 to argue that India's stagnant export performance stemmed from inward-focused import substitution policies, advocating instead for competitive export promotion to drive industrialization and poverty alleviation through market integration.[5] These empirics highlighted how export earnings could finance imports of capital goods, enabling self-reinforcing growth cycles absent in autarkic models.[36] In 1976, Singh was appointed Honorary Professor of International Economics at Jawaharlal Nehru University, New Delhi, continuing his scholarship on development metrics linking trade openness to income distribution and rural poverty reduction.[37] His publications emphasized causal links between export diversification and employment generation, drawing on cross-country data to critique overreliance on state-led substitution for its distortionary effects on resource allocation.[38] Singh's international stature grew through his tenure as Secretary-General of the South Commission in Geneva from 1987 to 1990, an initiative by developing nations to assess barriers to South-South trade and propose reforms for equitable global participation.[39] Concurrently, as India's representative, he participated in the Board of Governors of the Asian Development Bank, promoting financing mechanisms that rewarded export-oriented infrastructure over subsidized domestic industries.[40] These positions reinforced his evidence-based advocacy for shifting from import substitution fallacies—evident in India's pre-1991 stagnation—to export-led strategies, grounded in observed successes of East Asian economies where trade surpluses correlated with rapid per capita income gains and poverty declines.[41]Entry into politics
Appointment as Finance Minister (1991–1996)
In June 1991, amid a severe balance-of-payments crisis that had depleted India's foreign exchange reserves to levels sufficient for only about two weeks of imports, Prime Minister P. V. Narasimha Rao appointed Manmohan Singh, then a career economist serving as an advisor to the government, as Finance Minister.[42][43] The crisis stemmed from high fiscal deficits, rising import dependence, and a loss of investor confidence, forcing India to pledge gold reserves abroad to secure emergency loans from the International Monetary Fund (IMF) and other institutions.[44][45] Singh's initial response included a sharp devaluation of the rupee—by approximately 9% on July 1, 1991, and an additional 11% on July 3—to restore competitiveness in exports and signal commitment to market-oriented adjustments demanded by the IMF as conditions for bailout assistance.[46][47] In his July 24, 1991, budget speech, he outlined broader liberalization measures, including the dismantling of the License Raj through a new industrial policy that eliminated industrial licensing for most sectors, reduced import tariffs from prohibitive levels averaging over 100% to around 50-60%, and relaxed foreign investment caps to encourage inflows.[48][47] These steps shifted policy from state-controlled allocation to price signals and private initiative, averting sovereign default by prioritizing fiscal stabilization—such as cutting subsidies and the central deficit—over entrenched protectionism.[49] The reforms yielded empirical stabilization: real GDP growth, which contracted to 0.8-1.2% in fiscal year 1991-92 amid the crisis, rebounded to 5.1% in 1992-93 as industrial output and exports recovered. Foreign direct investment inflows, negligible at around $237 million in 1990, began rising post-reforms, multiplying over subsequent years as policy credibility improved.[50] However, implementation faced resistance from trade unions, socialist factions within the Congress party, and protectionist lobbies fearing job losses and foreign dominance, with critics decrying the IMF-mandated shifts as capitulation to external pressures rather than autonomous strategy.[5][49] Despite this, Rao's backing enabled Singh to enforce changes, demonstrating that crisis-induced necessity overcame ideological barriers to market-driven recovery.[47]Intervening roles and opposition leadership (1996–2004)
Following the end of his tenure as Finance Minister with the Congress-led government's defeat in the 1996 general elections, Manmohan Singh retained his seat in the Rajya Sabha, where he had served since 1991 as a Congress representative.[4] During the subsequent United Front coalition governments (1996–1998), which Congress initially supported from outside before withdrawing, Singh did not hold a ministerial position but remained active in parliamentary opposition, contributing to debates on economic policy continuity amid political instability.[51][31] In 1998, following Sonia Gandhi's ascension to Congress Party president amid internal divisions after the ouster of Sitaram Kesri, Singh was appointed Leader of the Opposition in the Rajya Sabha, serving from March 21, 1998, to May 22, 2004.[2] In this capacity, he positioned himself as a technocratic voice within a fractious opposition, critiquing the BJP-led NDA government's implementation of reforms while emphasizing the need to avoid populist reversals that risked fiscal indiscipline and undermined the 1991 liberalization framework.[52] His interventions focused on substantive economic issues, such as sustaining deregulation and foreign investment, rather than engaging in the party's factional rivalries. In 1999, Singh contested the Lok Sabha elections from South Delhi as a Congress candidate but lost to the BJP's Vijay Kumar Malhotra by a margin of over 30,000 votes, after which he reverted to his Rajya Sabha role. Singh's low-profile, expertise-driven leadership in the Rajya Sabha consolidated his standing as a non-ideological figure in Congress, insulated from the party's post-Rao infighting and dynastic tensions. This perception of reliability without a personal political machine made him a viable compromise for higher office; in May 2004, after the UPA's unexpected electoral victory, Sonia Gandhi selected him as Prime Minister designate, citing his economic credentials while avoiding the premiership herself due to public scrutiny over her foreign birth.[53] His selection underscored Congress's reliance on his technocratic image to bridge internal divides and appeal to reform-minded voters, even as it reflected wariness of his limited mass mobilization skills.[54]Prime Ministership
First term (2004–2009)
Following the 2004 Indian general elections held between April 20 and May 10, the Indian National Congress-led United Progressive Alliance (UPA) secured 218 seats for Congress and a total of approximately 219 for the core alliance, defeating the incumbent National Democratic Alliance.[55] Sonia Gandhi, Congress president, declined the premiership amid controversy over her foreign birth and instead nominated Manmohan Singh, leading to his authorization by President A.P.J. Abdul Kalam on May 19, 2004, to form the government.[56] The UPA relied on external support from leftist parties, enabling Singh's minority government to complete its full term despite coalition constraints.[55] Singh's first term prioritized sustaining economic liberalization initiated in the 1990s, achieving average annual GDP growth of approximately 8% from 2004 to 2009, with rates including 7.9% in 2004, 9.3% in 2005-06, and peaking at 9.6% in 2006-07, before a global financial crisis dip to 3.1% in 2008.[42] Fiscal prudence reduced the central government's deficit from 4.0% of GDP in 2004 to 2.5% by 2008, supported by robust tax revenues and privatization proceeds, though stimulus measures post-2008 reversed some gains.[57] Policies emphasized infrastructure investment, with foreign direct investment inflows rising to $34.4 billion in 2007-08, fostering sectors like IT and manufacturing, though agricultural growth lagged at around 3.7% annually.[58] Social welfare expansions marked a shift toward rights-based entitlements, including the Right to Information Act passed on June 15, 2005, and effective October 12, 2005, which mandated public authorities to disclose information upon request, enhancing transparency despite implementation challenges in bureaucratic resistance.[59] The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted September 7, 2005, and rolled out from February 2006, guaranteed 100 days of wage employment per rural household, reaching over 50 million households by 2009 but incurring fiscal costs exceeding 1% of GDP annually and facing criticism for leakages and low asset creation.[60] These measures, funded by growth dividends, aimed at poverty reduction, with rural poverty declining from 37.2% in 2004-05 to 33.8% in 2009-10, though causal attribution remains debated amid overall economic expansion.[42] In foreign policy, the Indo-US civil nuclear agreement stood as a pivotal achievement, initiated July 18, 2005, during Singh's Washington visit with President George W. Bush, culminating in IAEA safeguards approval August 1, 2008, NSG waiver September 6, 2008, and bilateral signing October 10, 2008.[61] The deal separated India's civilian and military nuclear programs, enabling access to global fuel and technology while preserving its testing rights, though it sparked domestic Left Front withdrawal of support in July 2008, necessitating a confidence motion Singh won 275-256.[62] Relations with neighbors saw mixed progress, including a 2007 joint statement with Pakistan on composite dialogue, but persistent border tensions and China infrastructure incursions highlighted limits.[42]Economic liberalization and growth drivers
During Manmohan Singh's first term as Prime Minister (2004–2009), India's real GDP grew at an average annual rate of 7.8%, with fiscal year rates reaching 9.3% in 2005–06 before dipping to 3.1% in 2008–09 amid the global financial crisis.[63] [42] This expansion built on the 1991 liberalization framework, which had dismantled licensing barriers and reduced tariffs, enabling private sector dynamism and integration into global value chains.[5] Key drivers included robust gross fixed capital formation, averaging over 30% of GDP, fueled by infrastructure investments and private enterprise, alongside a services sector boom in information technology and business process outsourcing that accounted for nearly 60% of growth contributions.[64] The government advanced liberalization through the Special Economic Zones (SEZ) Act of 2005, which provided tax holidays, duty exemptions, and streamlined approvals to attract export-oriented manufacturing and services, resulting in over 100 SEZs notified by mid-decade and contributing to a tripling of merchandise exports from $83 billion in 2004 to $189 billion in 2008.[65] [66] FDI norms were eased in select sectors, including 100% allowance in construction and development projects via automatic route in 2005, alongside raising caps in telecommunications and aviation, which propelled inflows from $5.5 billion in 2004–05 to a peak of $34.4 billion in 2007–08 before the crisis.[67] Banking sector reforms deregulated lending rates and issued new private bank licenses, enhancing credit availability and financial deepening, with non-performing assets declining amid improved regulatory oversight.[68] Disinvestment efforts focused on minority stake sales in public sector undertakings to fund infrastructure without strategic privatization, raising approximately ₹25,000 crore by 2009, though coalition dependencies with left-leaning allies curtailed aggressive divestment and broader market-oriented shifts.[69] These measures, combined with demographic dividends—a young, expanding workforce—and favorable global demand for Indian services, sustained high investment-to-GDP ratios above 35% pre-crisis, underscoring policy continuity over radical overhaul as the primary growth enablers.[64] Empirical evidence from capital formation and export data highlights how incremental openness amplified private efficiency gains, though fiscal expansions for social programs began crowding private investment by late term.[70]Social welfare expansions and their fiscal impacts
The United Progressive Alliance (UPA) government under Prime Minister Manmohan Singh prioritized rights-based social welfare legislation during its first term, enacting the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in September 2005, which legally guaranteed 100 days of unskilled manual labor per year to every rural household willing to work, with wages funded primarily by the central government.[71] Implementation began in 200 districts in 2006 and expanded nationwide by 2008, with central allocations rising from approximately ₹11,300 crore in 2006–07 to ₹31,170 crore in 2009–10.[72] Complementary initiatives included the National Rural Health Mission (NRHM), launched in 2005 to improve healthcare access in rural areas through increased funding for infrastructure and personnel, and expansions in education spending via the Sarva Shiksha Abhiyan, which saw outlays grow to support universal elementary enrollment targets.[73] Central government expenditure on social services, encompassing education, health, and rural development, increased in absolute terms from ₹9,650 crore in 2005–06 to ₹17,661 crore in 2008–09, reflecting a push for inclusive growth amid robust GDP expansion averaging 8.4% annually from 2004 to 2009.[74] As a share of GDP, social sector spending edged up slightly from 5.68% in 2003–04 to around 6% by 2008–09, with MGNREGA alone accounting for 0.3–0.5% of GDP by the end of the term.[75] [76] These expansions were financed through higher tax revenues from economic growth and targeted subsidies, maintaining fiscal prudence initially, as the central fiscal deficit declined from 4.5% of GDP in 2003–04 to 2.7% in 2007–08.[77] However, the welfare outlays contributed to emerging fiscal pressures, particularly post-2008 global financial crisis, when MGNREGA demand surged and expenditures peaked at 0.6% of GDP in 2009–10, exacerbating revenue shortfalls and pushing the deficit to 6.5% of GDP by 2009–10.[76] Critics, including economists analyzing UPA policies, argued that such spending fueled inflationary pressures—wholesale price inflation averaged 6.4% from 2004–09, rising sharply to 8.3% in 2008–09—and distorted rural labor markets by raising wage floors without commensurate productivity gains, potentially crowding out private investment.[72] [78] Empirical assessments noted high leakages in MGNREGA funds, with studies estimating 20–40% diversion through corruption or ghost workers, limiting net poverty alleviation despite gross outlays.[79] Overall, while enabling short-term rural income support, the expansions strained public finances amid implementation inefficiencies, setting the stage for sustained deficits exceeding 5% of GDP in subsequent years.[80]Foreign policy achievements, including US nuclear deal
During Manmohan Singh's first term as Prime Minister from 2004 to 2009, Indian foreign policy prioritized strategic partnerships to enhance energy security, economic integration, and geopolitical influence while upholding nuclear autonomy. A cornerstone achievement was the negotiation and implementation of the Indo-US Civil Nuclear Agreement, initiated via a joint statement on July 18, 2005, between Singh and US President George W. Bush, which proposed full civil nuclear cooperation in exchange for India placing its civilian nuclear facilities under International Atomic Energy Agency (IAEA) safeguards.[62][81] This framework addressed India's three-decade exclusion from global nuclear commerce due to its 1974 nuclear test and refusal to sign the Nuclear Non-Proliferation Treaty, without requiring India to forgo its military nuclear program or accept full-scope safeguards on all facilities.[82] Negotiations advanced with the signing of the 123 Agreement on August 3, 2007, committing the US to support India's development of a strategic nuclear fuel reserve against supply disruptions and enabling fuel supply assurances for India's safeguarded reactors.[83] Despite domestic political hurdles, including the withdrawal of Left Front support in July 2008 over concerns of eroded sovereignty, Singh's government secured a confidence vote in Parliament on July 22, 2008, by 275-256, paving the way for international approvals.[81] The IAEA Board approved India's safeguards agreement on August 1, 2008, followed by a Nuclear Suppliers Group (NSG) waiver on September 6, 2008, allowing members to engage in nuclear trade with India.[61] US Congressional approval culminated in President Bush's signature on October 8, 2008, operationalizing the deal by early 2009.[81] The agreement's impacts included India's access to uranium fuel and reactor technology, bolstering energy diversification amid growing demand—nuclear capacity rose from 3,000 MW in 2008 to plans for 63,000 MW by 2032—and freeing domestic uranium for military purposes, thus enhancing strategic deterrence without compromising proliferation commitments like a testing moratorium.[82][84] It elevated India's global standing, fostering a strategic US partnership that extended to defense sales and intelligence sharing, while critics in non-proliferation circles argued it weakened treaty regimes by rewarding India's outsider status.[62] Beyond the nuclear deal, Singh's diplomacy yielded progress in neighborhood relations, including resumed composite dialogue with Pakistan in 2004 leading to ceasefires along the Line of Control and reduced cross-border militancy, though strained by the 2008 Mumbai attacks.[85] Ties with Bangladesh advanced through ongoing land boundary talks and water-sharing discussions, laying groundwork for later resolutions.[86] Enhanced engagements with Japan culminated in a 2006 strategic partnership declaration, boosting economic and security cooperation, while assistance to Afghanistan, including $750 million in development aid by 2009, strengthened bilateral ties amid shared concerns over regional stability.[87] These efforts reflected a pragmatic multi-vector approach, prioritizing economic pragmatism over ideological alignments.Second term (2009–2014)
Singh's United Progressive Alliance (UPA) government secured re-election in May 2009, forming UPA II with support from smaller parties after the Congress-led coalition won 206 seats in the Lok Sabha. This second term, spanning May 2009 to May 2014, faced escalating domestic challenges that overshadowed initial economic momentum from post-global financial crisis recovery. While GDP growth started strong at 7.9% in 2009 and peaked at 8.5% in 2010, it decelerated sharply to 5.2% in 2011 and 5.5% in 2012 amid high inflation averaging around 10% annually, driven by supply-side bottlenecks and fiscal profligacy.[88][58][89]Policy paralysis and economic deceleration
The latter half of Singh's tenure was characterized by "policy paralysis," a term widely used to describe bureaucratic inertia and stalled decision-making, exacerbated by coalition dependencies and fear of further corruption allegations following Comptroller and Auditor General (CAG) reports. Key reforms, such as opening multi-brand retail to foreign direct investment and labor law amendments, were delayed or abandoned due to political opposition within the ruling alliance and from allies like the Trinamool Congress. This hesitation contributed to investment slowdown, with gross fixed capital formation dropping from 35% of GDP in 2008 to under 30% by 2012, as private sector confidence eroded amid retrospective tax proposals and regulatory uncertainty.[90][91][92] Economic indicators reflected this deceleration: wholesale price inflation hovered between 6-12% from 2010-2013, fueled by agricultural supply shortages and high oil import bills, while current account deficit widened to 4.8% of GDP in 2012-13, prompting a balance-of-payments crisis averted only by Federal Reserve tapering signals and IMF-like interventions. Fiscal deficits exceeded 5% of GDP annually, limiting monetary policy space for the Reserve Bank of India, which raised interest rates repeatedly yet failed to curb demand-pull pressures from populist subsidies. Critics, including business leaders, attributed the stagnation to Singh's perceived weak leadership in overriding ministerial vetoes, contrasting with his decisive first-term actions.[93][94][95]Major corruption scandals and governance failures
UPA II was beset by high-profile corruption scandals, with CAG audits estimating notional losses exceeding ₹3 lakh crore across sectors, eroding public trust and triggering protests like the 2011 India Against Corruption movement. The 2G spectrum allocation scam involved the discretionary grant of telecom licenses in 2008 under Telecom Minister A. Raja, with CAG pegging presumptive losses at ₹1.76 lakh crore due to below-market pricing; Raja was reinducted into the cabinet in 2009 despite warnings, citing coalition compulsions with the DMK, and later convicted in 2017 before acquittal on appeal. Similarly, the coal block allocation scam (Coalgate) saw 194 blocks allotted without competitive bidding from 2004-2009 under Singh's direct oversight as Coal Minister, with CAG estimating ₹1.86 lakh crore in windfall gains to allottees; a special court summoned Singh in 2015 for alleged irregularities, though he was cleared by the CBI.[96][97][98] The 2010 Commonwealth Games (CWG) preparations revealed massive cost overruns from ₹1,600 crore to over ₹35,000 crore, involving ghost contracts and shoddy infrastructure, leading to arrests of organizers like Suresh Kalmadi and exposing systemic graft in sports ministry procurement. Other cases included the Adarsh housing society scam, where military land in Mumbai was illegally allotted to politicians and bureaucrats, and railway safety tender irregularities under Minister Pawan Kumar Bansal. These episodes, amplified by activist CAG reports under Vinod Rai, fostered a risk-averse administrative culture, as officials awaited judicial clearances for routine approvals, compounding governance failures. Singh defended the allocations as per prevailing policy but acknowledged in interviews that coalition "dharma" constrained sackings, a stance critiqued as enabling cronyism over accountability.[96][99][6]International relations amid domestic turmoil
Foreign policy during the second term built on first-term gains, with the US-India Civil Nuclear Agreement operationalized via NSG waiver and 2008 Hyde Act implementation, culminating in Obama hosting Singh in November 2009 and reciprocal visits strengthening strategic ties. Engagements with Japan advanced via a 2010 comprehensive economic partnership and defense cooperation pacts, while relations with Afghanistan saw increased development aid amid Taliban threats. However, domestic scandals and paralysis hampered assertive diplomacy; border tensions with China escalated with 2013 Depsang incursion, exposing infrastructure gaps, and Pakistan ties stagnated post-2008 Mumbai attacks, with limited progress on trade despite Singh's overtures for a liberalized visa regime.[87][100][85] Singh's administration navigated global headwinds like the Eurozone crisis but prioritized economic diplomacy, securing G20 roles for India; yet, perceived leadership vacuum—exemplified by Finance Minister P. Chidambaram's 2013 "growth vs. stability" debates—weakened bargaining power, as investors fled emerging markets. Critics noted that internal governance lapses, including non-performing asset surges in public banks from politically influenced lending, projected instability abroad, contrasting with Singh's personal rapport-building but underscoring systemic constraints on India's global ascent.[101][102]Policy paralysis and economic deceleration
During Manmohan Singh's second term as Prime Minister (2009–2014), the United Progressive Alliance (UPA-II) government encountered widespread policy paralysis, defined by stalled decision-making on reforms, investment approvals, and legislative initiatives amid coalition dependencies and corruption investigations. This hesitation stemmed from high-profile scandals, including the 2G spectrum allocation and coal block allotments, which triggered judicial interventions and bureaucratic caution, delaying project clearances in sectors like mining and infrastructure.[103][104] Environmental regulations, tightened post-scandals, further impeded industrial expansion, with mining bans in key states reducing output and contributing to supply bottlenecks.[105] Economic growth decelerated markedly, averaging 6.6% annually from 2009 to 2014, compared to 8.4% in the prior term, with quarterly figures dipping below 5% by 2012–2013.[106] The International Monetary Fund attributed approximately two-thirds of this slowdown to domestic factors, including policy inaction, rather than solely global post-2008 effects.[105] Key indicators reflected the strain:| Year | GDP Growth (Annual %) |
|---|---|
| 2009 | 7.86 |
| 2010 | 8.50 |
| 2011 | 5.24 |
| 2012 | 5.46 |
| 2013 | 6.39 |