Reforms under PV were 'by stealth' not gradualism: Montek

New Delhi: Former planning commission deputy chairman Montek Singh Ahluwalia has said that the 1991 economic reforms under former prime minister PV Narasimha Rao were characterised more "by stealth" than by a clearly signalled gradualist approach, noting that neither Rao nor then finance minister Manmohan Singh were proponents of "big-bang" changes.

Ahluwalia placed both Rao and Manmohan in the category of "gradualists" – as he did himself.

However, he distinguished between two types of gradual change -- what he called "gradualism" and "reform by stealth."

"I don't know if I coined the phrase, 'reform by stealth', but I certainly used it -- and probably earlier than most. I used it to describe Rao's approach to bringing about reforms. Manmohan Singh was the architect, he actually knew what to do.

"But, as he himself often said, he couldn't have done it without the prime minister's support. Neither Rao nor Manmohan Singh was a great believer in big-bang reforms. They were both, in that sense, gradualists," said Ahluwalia.

The 81-year-old economist, who was a key member of the team that implemented the 1991 reforms, used an analogy from the shipping industry to explain his point.

"One of my friends who was in shipping once said: the turning circle of a small boat is much smaller than a big liner. You have to accept that if you're steering a very large vessel, it's going to take time to turn.

"In India, 'reform by stealth' really meant we are going to change direction, but we're not going to openly say so," he said, adding that this often meant reform announcements were made without clear timelines or commitments, in contrast to a more predictable and planned path.

Ahluwalia explained that under a genuine gradualist approach, policymakers would communicate the trajectory clearly -- for example, announcing a phased reduction of tariffs over a 10-year horizon.

This, he said, enables businesses and stakeholders to plan accordingly. However, he claimed, the approach that India took was different from gradualism and was "opportunistic."