linguistic:voice_change, structural:reformatting, information:extraction, stylistic:style_transfer, structural:expansion
Minister of Finance

In 1991, India's fiscal deficit was close to 8.5 per cent of the gross domestic product, the balance of payments deficit was huge and the current account deficit was close to 3.5 per cent of India's GDP. India's foreign reserves barely amounted to US$1 billion, enough to pay for 2 weeks of imports, in comparison to US$600 billion in 2009.

Evidently, India was facing an economic crisis. At this point, the government of India sought funds from the supranational International Monetary Fund, which, while assisting India financially, imposed several conditions regarding India's economic policy. In effect, IMF-dictated policy meant that the ubiquitous Licence Raj had to be dismantled, and India's attempt at a state-controlled economy had to end.

Singh explained to the PM and the party that India is facing an unprecedented crisis. However the rank and file of the party resisted deregulation. So P. Chidambaram and Singh explained to the party that the economy would collapse if it was not deregulated. To the dismay of the party, Rao allowed Singh to deregulate the Indian economy.

Subsequently, Singh, who had thus far been one of the most influential architects of India's socialist economy, eliminated the permit raj, reduced state control of the economy, and reduced import taxes Rao and Singh thus implemented policies to open up the economy and change India's socialist economy to a more capitalistic one, in the process dismantling the License Raj, a system that inhibited the prosperity of private businesses. They removed many obstacles standing in the way of Foreign Direct Investment (FDI) and initiated the process of the privatisation of public sector companies. However, in spite of these reforms, Rao's government was voted out in 1996 due to non-performance of government in other areas. In praise of Singh's work that pushed India towards a market economy, long-time Cabinet minister P. Chidambaram has compared Singh's role in India's reforms to Deng Xiaoping 's in China.

In 1993, Singh offered his resignation from the post of Finance Minister after a parliamentary investigation report criticised his ministry for not being able to anticipate a US$1.8 billion 1992 securities scandal. Prime Minister Rao refused Singh's resignation, instead promising to punish the individuals directly accused in the report.