Economic regulations worse than 1991, no Manmohan Singh to bail us out: Chidambaram

P Chidambaram, former finance minister of India, delivered a scathing critique of the nation’s current economic model during a speech at the Business Today India@100 event, stating that regulatory frameworks were more restrictive than they were in 1991. He emphasized that the country lacked a modern-day economic visionary akin to former Prime Minister Manmohan Singh, who played a pivotal role in liberalizing India’s economy in the early 1990s. Speaking at the event held in New Delhi on August 21, 2026, Chidambaram described the current economic structure as being ensnared within a complex web of regulation, investigation, enforcement, crony capitalism, and bureaucratic obstacles. He asserted that the prevailing framework was not grounded in a thorough understanding of the realities on the ground and lacked the necessary depth of economic insight and expertise. Chidambaram drew comparisons between past leaders, noting that former Prime Minister PV Narasimha Rao was a political executive, whereas Manmohan Singh was an economic brain. He stressed that no contemporary figure could match the impact and influence of Singh, whose reforms laid the foundation for India’s economic transformation. The former finance minister criticized the government’s focus on manufacturing, arguing that the semiconductor industry was being heavily subsidized using public funds. He pointed out that companies establishing semiconductor plants received subsidies ranging from 80 to 85 percent, with the majority of investment coming from public resources rather than private capital. Chidambaram questioned the absence of a comprehensive national strategy for manufacturing, recalling that Dr. Manmohan Singh had introduced such a vision in 1991. He noted that manufacturing currently accounted for just 14 percent of the economy, expressing disappointment over the lack of progress in this area. Regarding international trade agreements, Chidambaram highlighted the limited scope of India’s Free Trade Agreements (FTAs). He pointed out that agreements were primarily with smaller nations, with little engagement with major economies such as France, the United States, Germany, and China. He remarked that negotiations with the U.S., which he described as having a “whimsical” leadership style, and with China, shrouded in secrecy, posed significant challenges. Chidambaram also urged India to strengthen its domestic manufacturing capabilities, emphasizing that the country relied heavily on imports of raw materials, capital goods, and accessories from China. Even in cases where certain materials, such as rare earths, were unavailable, he argued that India should invest in building its own production infrastructure to replace these imports. He further warned that competition across key industries was diminishing, with sectors such as telecommunications, petroleum, cement, steel, airports, and ports increasingly dominated by monopolies or oligopolies. Chidambaram criticized the Competition Commission of India, asserting that it was ineffective and pointing out that there had been no notable mergers blocked in recent years. In his address, Chidambaram reiterated that the current economic approach failed to incorporate deep analysis and expert economic thinking. He underscored the need for a more competitive and dynamic economic environment, advocating for stronger domestic manufacturing and broader market participation. His comments reflect a growing concern among economic policymakers about the trajectory of India’s growth and the effectiveness of its regulatory and strategic frameworks.