The then Finance Minister Manmohan Singh in PV Narsimha Rao's Congress Government of 1991, announced India's most radical policy document in the form of the New Industrial Policy - the Licence Raj was scrapped on 24 July 1991.
This was the governments initial step in moving India ahead at the international level and raise industrial efficiency by accelerating Industrial growth.
Licence Raj, which was in place for four decades, came to an end with the new industrial policy announced by Manmohan Singh and Prime Minister PV Narsimha Rao, who also held the portfolio of Industries Minister.
It was in the 1980s and 1990s that the tides began to turn against the Nehruvian conception of democratic socialism, which influenced the Licence Raj. Nehru, influenced by post revolution Russia, was an avomed socialist proposed economic plans in India that stressed centralised planning of the economy. His vision was to modernize Indian economy that was left impoverished due to decades of colonial rule. His vision created a hybrid economy unlike Russia and allowed private enterprise to flourish. It was the core segments and strategic industries that were placed under state control and public sector corporations guided investment.
Over 4 decades, the Licence Raj began to stifle India's growth and Indian economy was seen to be prevented from reaching its full success On 24 July 1991 the Indian Government under able leadership transitioned to Liberalisation, with an aim to correct the distortion and weakness in the industrial structure of India. This policy did not suggest total government decontrol and delicensing but certain radical proposal set the ball rolling to liberaliasation.
The New Industrial Policy proposed getting rid of Monopolicies and Restrictive Trade Practices and abolishing industrial licensing for all but 18 industries. Foreign equity holdings were proposed to be raised by 51% in a project. Indian industry was free of controls and bureaucracy like never before.