A leader with unusual powers of foresight and former prime minister Late Sh. Atal Bihari Vajpayee, who passed away at the age of 93 at AIIMS (New Delhi) on August 16, was the forerunner for several economic reforms undertaken by his successors. He was the man behind many key decisions.

Here are five major economic decisions that former PM Vajpayee took to change the course of India’s journey:


GST was implemented in India on July 1, 2017. However, it was Vajpayee who had first mooted the idea of a common tax structure for goods and services across the country. In 2000, the Vajpayee-led government had set up a committee to design the backbone of the GST model and ensure that the technology back-end was put into place. However, due to lack of consensus among the parties and individual states, the reform was delayed for as long as 17 years

The initiative to provide free and compulsory education to all children between 6 and 14 years of age was taken by the former PM. The main objective of the scheme, which commenced in 2000-01, was to reduce dropouts and increase the net enrolment ratio at primary level. In fact, the song School Chale Hum that was used to promote the scheme was penned by Vajpayee himself. With the mission in full force, the rate of dropouts reduced from almost 40 percent in 2000 to less than 10 percent in 2005.


The government, under the former PM Vajpayee, enacted the Fiscal Responsibility and Budget Management (FRBM) Act in 2003. The Act had set targets to reduce fiscal deficits and boost savings in the public sector. While there were several amendments made to the Act, it was Vajpayee who brought forth the idea of keeping fiscal deficit under check at 3 percent of gross domestic product (GDP).


India boasts 984 million active wireless phone users (as of May 2018) and credit for the same should go to Vajpayee. In 1999, his government took a decision to end state monopolies for entities like BSNL and introduced a new Telecom Policy where a revenue-sharing regime was started. This led to revenue sharing model and eventually paved the way for call rates getting cheaper as well as affordable mobile phones.


One of the flag-bearers of divestments in public sector undertakings, former PM Vajpayee had set up a separate department for disinvestment as early as 1999. Under his leadership, large disinvestment initiatives including that of Bharat Aluminium Company (BALCO), Hindustan Zinc as well as Videsh Sanchar Nigam Limited.

The insurance sector, until 1999, was dominated by state-owned entities in both life and general insurance segments. The sector was privatised to allow corporates to set up insurance companies. Foreign direct investment of up to 26 percent was permitted that led to several global insurance companies entering India. Co-incidentally, the Insurance Laws (Amendment) Act was passed in 2015 under Prime Minister Narendra Modi’s leadership that allowed foreign shareholders to hold up to 49 percent stake in Indian insurance companies.

For any queries/clarification you may contact

CA. Bharat Poplani