And become the world’s richest man doing it.
In June 1991,India is undergoing an economic crisis with foreign exchange reserves just enough to pay for 2 weeks for imports.
PM Narasimha Rao is contemplating removing the economic shackles and reducing state control to liberalize and rescue the economy.
In the lead-up to the historic 1991 Budget, he meets industrialists including Dhirubhai Ambani.
In Rao’s archives lies a printed letter in light brown paper.While unsigned,on the top right corner,in Rao’s precise handwriting, is the word ‘Dhirubhai’.The letter begins by referring to the fiscal deficit and the balance of payments crisis that India was facing.It does not suggest delicensing or external liberalization as the solution.Instead,it proposes that India raise 16,000 Crore rupees by selling the government’s stake in public sector units.
Such as suggestion would soon be implemented elsewhere.After the disintegration of the Soviet Union in 1991,the newly formed Russian republic would opt for large-scale privatization of public sector enterprises.Many of these state assets were purchased at throwaway prices by businessmen with connections to the new government.This Russian-style capitalization was more crony capitalism than genuine liberalization, and Narasimha Rao was being pressured to adopt a similar approach