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Manmohan Singh was the leader behind India's transformation. As finance minister in the early 1990s and then as the prime minister from 2004 for ten years, his reforms reduced strict government controls, opened up the economy, helped lift millions out of poverty, and made the world see India as an important ally, especially in nuclear matters.When Manmohan Singh became Finance Minister in 1991, India was close to an economic collapse. The country had only enough foreign exchange reserves to cover a few weeks of essential imports. This was made worse by the weakening of the Soviet Union in the late 1980s, which had been a source of cheap oil and raw materials and a market for Indian products. India had also been able to trade without needing US dollars because of this relationship.Manmohan Singh's Budget when India was in serious troubleManmohan Singh during Budget speech said, their new government, which took office just a month ago, inherited an economy in serious trouble. The balance of payments situation is critical. Until November 1989, when the previous party was in power, there was strong international confidence in India's economy. However, after political instability, worsening fiscal issues, and the Gulf crisis, international confidence weakened significantly. This led to a sharp decline in capital inflows from commercial borrowing and non-resident deposits. Despite borrowing large amounts from the International Monetary Fund in 1990 and 1991, India’s foreign exchange reserves dropped drastically. Since December 1990, and especially from April 1991, India has been on the verge of an economic crisis."The people of India have to face double digit inflation which hurts most the poorer sections of our society. In sum, the crisis in the economy is both acute and deep. We have not experienced anything similar in the history of independent India," he said.Also Read: Remembering Dr. Manmohan Singh: A legacy of economic reforms and leadershipIn the face of this economic crisis, Singh decided to introduce reforms in 1991. These reforms focused on liberalisation, privatisation, and opening up India's economy, moving it towards market-based principles. In his 1991-92 budget speech, Singh changed the direction of India's economy by saying that "over-centralisation and excessive bureaucratisation of economic processes have proved to be counterproductive" and that India needed to "expand the scope and the area for the operation of market forces."Manmohan Singh faced some criticism after 1991 BudgetManmohan Singh, who created India’s economic reforms, had to go through a tough time to ensure that people accepted his bold 1991 budget. This budget helped India recover from its worst financial crisis. Today, India is the world’s fifth-largest economy and is expected to become the third-largest in a few years. One might wonder how much India’s economy would have achieved if Manmohan Singh had not introduced the 1991 budget.Also Read: When Dr. Manmohan Singh, all alone, defended a 'budget with a human face' in 1991"As we enter the last decade of the twentieth century, India stands at the cross-roads. The decisions we take and do not take, at this juncture, will determine the shape of things to come for quite some time. It should come as no surprise, therefore, that an intense debate rages throughout the country as to the path we should adopt," Manmohan Singh had said during Budget speech.Manmohan Singh had dedicated the the 1991 Budget to Rajiv Gandhi. "I rise to present the budget for 1991-92. As I rise, I am overpowered by a strange feeling of loneliness. I miss a handsome, smiling, face listening intently to the Budget Speech. Shri Rajiv Gandhi is no more. But his dream lives on; his dream of ushering India into the twenty-first century; his dream of a strong, united, technologically sophisticated but humane India," Manmohan Singh said at the start of his Budget speech.However, what followed altered the couse of Indian economy. Let's take a look at some key parts of what Manmohan Singh said in the 1991 Budget.Manmohan Singh's reforms for foreign investmentsManmohan Singh in 1991 Budget speech said macro-economic stabilisation and fiscal adjustments alone aren't enough; they must be supported by crucial reforms to reduce inefficiency and boost economic growth. The reforms aim to enhance industrial efficiency, attract foreign investment, modernise the financial sector, and improve the public sector. Once implemented, these measures will help India achieve sustained growth, price stability, and greater social equity. "Macro-economic stabilisation and fiscal adjustment alone cannot suffice. They must be supported by essential reforms in economic policy and economic management, as an integral part of the adjustment process, reforms which would help to eliminate waste and inefficiency and impart a new element of dynamism to growth processes in our economy. The thrust of the reform process would be to increase the efficiency and international competitiveness of industrial production, to utilise for this purpose foreign investment and foreign technology to a much greater degree than we have done in the past, to increase the productivity of investment, to ensure that India’s financial sector is rapidly modernised, and to improve the performance of the public sector, so that the key sectors of our economy are enabled to attain an adequate technological and competitive edge in a fast changing global economy. I am confident that, after a successful implementation of stabilisation measures and the essential structural and policy reforms, our economy would return to a path of a high sustained growth with reasonable price stability and greater social equity."Manmohan Singh's reforms for industrial policyManmohan Singh also flagged how restrictions on entry and limitations on the growth of firms have often resulted in an increase in licensing and a rise in monopoly power."This has put shackles on segments of Indian industry and made them serve the interests of producers but not pay adequate attention to the interests of consumers. There has been inadequate emphasis on reduction of costs, upgradation of technology and improvement of quality standards. It is essential to increase the degree of competition between firms in the domestic market so that there are adequate incentives for raising productivity, improving efficiency and reducing costs. In the pursuit of this objective, we have announced important changes in industrial policy which will bring about a significant measure of deregulation in the domestic sector, consistent with our social objectives and the binding constraints on the balance of payments."Also Read: Manmohan Singh: India’s quiet reformer who taught a generation to dreamManmohan Singh also said industrial development policies are closely tied to trade policies. While protection was necessary in the early stages of industrial growth, the time has come to gradually expose Indian industry to foreign competition. The government has introduced changes in import-export policy, reducing import licensing, promoting exports, and optimizing imports, marking the beginning of a shift from quantitative restrictions to a price-based trade system.Manmohan Singh asked India not to fear foreign investmentsAnother major highlight of the speech that redefined India's economy was when Manmohan Singh said it was no more time to fear foreign investments. "After four decades of planning for industrialisation, we have now reached a stage of development where we should welcome, rather than fear, foreign investment. Our entrepreneurs are second to none. Our industry has come of age. Direct foreign investment would provide access to capital, technology and markets. It would expose our industrial sector to competition from abroad in a phased manner," Manmohan Singh said.In the 1991 Budget, Manmohan Singh proposed to liberalize the policy regime for direct foreign investment in several key ways. First, he suggested that direct foreign investment in specified high-priority industries, with a raised foreign equity limit of 51%, would be promptly approved, provided the equity inflows could finance capital goods imports and the dividends were balanced by export earnings over time. Second, he proposed allowing foreign equity up to 51% for trading companies primarily engaged in export activities. Third, he recommended the creation of a special board to negotiate with large international firms and approve direct foreign investment in selected sectors, aiming to attract significant investments, high technology, and access to global markets.Manmohan Singh 1991 budget plan for public sectorHis next big announcement was the intent to turn public sector an engine of growth rather than an absorber of national savings without adequate return.Also Read: Manmohan Singh: The reformist who mastered the art of wielding delegated authorityIn the 1991 Budget, Manmohan Singh proposed a review of the public sector investment portfolio to focus on strategic areas essential for the nation's economy, requiring advanced technology, and critical infrastructure. To raise resources, encourage wider public participation, and promote greater accountability, he suggested offering up to 20% of government equity in select public sector undertakings to mutual funds, investment institutions, and workers in those firms. He also recommended that chronically sick public enterprises, which could not be revived, be referred to the Board for Industrial and Financial Reconstruction (BIFR) or a similar high-powered body for rehabilitation schemes. A social security mechanism would be created to protect workers’ interests during the rehabilitation process. Furthermore, Singh proposed providing public sector enterprises with management autonomy, accompanied by accountability through memorandums of understanding with the government.Manmohan Singh's "no magic" plan for banking systemAs for the banking system and financial institutions, Manmohan Singh said "there are no magic solutions" as financial system had developed certain rigidities and some weaknesses.Manmohan Singh proposed the appointment of a high-level committee to examine the structure, organisation, functions, and procedures of the financial system. This committee would advise the government on necessary measures to improve the viability and health of the financial sector, ensuring that it could better meet the needs of the economy while maintaining the principles of a sound financial system.Manmohan Singh emphasized that India stood at a crucial juncture as it entered the last decade of the 20th century. He acknowledged the intense national debate on the path the country should follow, underscoring the importance of adapting the planning process to a rapidly changing environment. Singh highlighted that India could not achieve its goal of creating a just society by abandoning the planning process. However, he stressed that the planning process must be flexible and responsive to the evolving economic landscape. He proposed that the over-centralization and excessive bureaucratization of economic processes had proven to be counterproductive, urging for an expansion of market forces and a reformed price system to allocate resources more effectively.Singh also recognised the need for direct government intervention to support the marginalized population, ensuring access to essential social services like education, health, and infrastructure. He emphasized the importance of planning for capital and technology-intensive sectors like transport, energy, and communications, which require careful management. Singh called for leadership to tackle issues like land and water degradation, which threatened the livelihoods of millions.There were several other measures hat changed the fortunes of India. Click here for full text of Manmohan SIngh's 1991 Budget

"Size of the opportunity is very good. In retail, and this be true for any form of retail, you got to get your unit economics right. And if you get your unit economics right, that is to say per unit order or per unit quick commerce transaction, more than cost of capital, then the sky is the limit for you and I think Zomato has the first mover advantage, they have got the unit economics right, they have broken even, they are making contribution margin which are positive and now it is only about expansion into tier I, getting economies of scale," says Manish Sonthalia, Emkay Investment Managers.And while we are talking about the entire consumer space, one name that I am seeing in a portfolio of yours as a top holding is Zomato. Not really surprised to see Zomato, but also not expecting to not see Swiggy make it to this list. What is making Zomato much more attractive than Swiggy because Swiggy has also been innovating if not at a higher pace, then largely at the same pace that which Zomato has. They have also had a couple of recent rollouts. The stock seems to be doing well over the last one month and ever since it is listing we have very bullish brokerage notes coming in for Swiggy as well. What is making Zomato more attractive than Swiggy to hold in your portfolio right now?Manish Sonthalia: So, not specifically commenting on Swiggy because regulation prohibit us from commenting about stocks that are not a part of our portfolio, but I would look at the entire space like this, that the TAM, the size of the opportunity is humongous. There is room for everybody. You have many more players apart from Zomato actually enter both the quick commerce space and the food delivery space and the fast food delivery space also, the Cafe Zeptos of the world so to speak. And even Zomato has come out with a Bistro and likewise for Swiggy and you will have many more come through in the form of let us say JioMart or Flipkart also announcing their quick commerce model. Size of the opportunity is very good. In retail, and this be true for any form of retail, you got to get your unit economics right. And if you get your unit economics right, that is to say per unit order or per unit quick commerce transaction, more than cost of capital, then the sky is the limit for you and I think Zomato has the first mover advantage, they have got the unit economics right, they have broken even, they are making contribution margin which are positive and now it is only about expansion into tier I, getting economies of scale. The other players have not really got that right just yet. And even as we speak, the turnover on these companies are that let us say Swiggy is also 50% market share in food delivery or let us say 45% market share and Zomato is a 55% market share. You have not got your unit economics right, then you will have a tough time going forward, so that is not to say that they cannot get it right, but we would like to bet on players which have already got it right. Because the size of the opportunities available for everybody and the tam is just too big. So, anybody and everybody can win who can get the supply chain and the unit economics right, but more comfortable in public portfolios in companies which have already demonstrated profitability and growth, so that is the reason why we have Zomato as a preferred pick in this space. I am very intrigued to ask you the question on IT because you talked about how you are positive on the sector. Now on one hand, you are talking about how it is going to be a year of only 10-15% kind of earnings growth. Nifty is going to be range bound between 22,000 to 25,000. When it comes to IT, the earnings are going to be sombre, maybe let us say very low double digit to high single digit and at the same time valuations are not comfortable either, plus the disruption of Gen AI. In all of that context, how does IT stack up to your buy list then?Manish Sonthalia: So, we are talking everything relative out here that these are sectors which are relatively going to outperform the rest of the sectors in terms of both the earnings growth as well as the valuations. One key parameter on the macro side is your currency and you are right that IT companies will at best report mid to high single digit sort of a constant currency revenue growth in calendar 25, but this is coming on the back of a low base. And the last two-three years has been bad for the IT space. There has been a lot of order book position that was built in, but it was never getting translated into revenue. For the first time after the elections in US which are getting over, you will see a lot of discretionary spend come through. And obviously we are hearing that, tax cuts are also going to happen in the US, a lot of impetus on technology spending is going to happen in the US. And of course, a rub off effect of all these things will also come to Indian IT vendors as well as the global capability centre, GCCs, in India. So, on a relative basis, if you combine all these three things, constant currency, revenue growth which is actually going to see an increment, we have heard that from Accenture that they have upped their guidance. The guidance is going to be relatively better than what we saw in the previous quarter. A whole lot of that peak into discretionary budgets of clients of IT vendors will come through January to March quarter. But nonetheless, the commentary would signal a lot of things. You are looking at currency depreciation, you are looking at tax cuts come through in the most developed market, which is US and technology spend boost, which is coming through. So, it is not lights on, it is basically discretionary spend, the environment changes for the better and on a relative basis when we compare this year to last year, it is much better. Of course, valuations are relatively full, but valuations are relatively full for almost all sectors in India. There is not even one sector in India which is not full in terms of valuation if you take it from a sectoral point of view. On a relative basis, when you are looking at the currency depreciating another 3% to 4% in the next six to nine months, this offers a high margin of safety when it comes to your sectoral picking is how I look at it. But then what about the entire public sector kind of entities in the sense that this year start was great for them, then they cooled off a bit. Do you expect of a bit of a revival in some of these names come 2025? How does the risk reward look like?Manish Sonthalia: See, the government is talking about heavy lifting in terms of expenditure comes through in the second half of this year and maybe even after the budget all of this spend is going to happen through the public sector entities and public sector as a whole is relatively very cheap in terms of valuations. And from that point of view, I think the risk is to reward is very-very few. On top of that, these guys are actually going to pay very good dividends. So, if you are looking at some island of safety in terms of valuations, this is one space. Of course, the idea is to be with those spaces in the public sector where there is a monopoly or monopolistic companies and I would even look at public sector banks because even though the growth rates in NII, net interest income, for the second quarter was lower than the private sector banks, in terms of relative valuation also they are much cheaper than private sector banks and of course, the banking sector as a whole looks very favourably suited in terms of valuations and growth. The public sector banks plus monopolistic public sector entities, I think that the margin of safety is very high given that all the government spending is going to happen through the public sector units and that is why, plus high dividends, so this is one area to be kept on mind selectively. Also, want to get your sense on the entire FMCG space because I am not seeing any pure play FMCG names or a couple of consumption names, yes, but not seeing pure play FMCG names across your portfolio. What is your outlook on the likes of HUL, Tata Consumer, GCPL? GCPL has rather already given a very weak quarter three update even before the quarter has ended. Do you think recovery is still a little far away for a bunch of these names given that rural is recovering but urban demand has now started slowing down?Manish Sonthalia: Absolutely, I mean, consumption as a whole is weak. On most of the categories in the discretionary side and even staples have been quite weak because we are really looking at very little value growth come through and even lesser volume growth. And yes, rural is recovering at the margin but urban is getting suppressed. So, from that point of view, the risk is to reward in terms of valuation still seems very unfavourable. If the valuations were to correct, of course, this is one area to look at, but I would believe that given the growth on most of the FMCG names, the high single digit sort of a revenue growth so to speak and of course the whole story is about premiumisation, but we are also looking at an inflationary scenario. Please understand that if rupee was to depreciate, then we are going to import a lot of inflation and margins is going to be one area to be concerned about going into the future. And given the way the things are, it looks like that rupee is likely going to depreciate. From that point of view, margin headwinds will be one area for all the corporates and particularly so even in the case of FMCG, they will be a headwind to your net profit numbers. And given the valuations, of course these are high quality cash flows but there is no growth. So, from that point of view, significant underweight on the FMCG space.

Private lender IndusInd Bank shares rose over 2% to Rs 932.15 on BSE on Friday as the bank has put loans worth Rs 1,573 crore up for sale after facing continued asset quality pressures on its microfinance book.The lender has invited public bids for unsecured microfinance loans with a reserve price of Rs 85 crore.The base bid price indicates a minimum recovery rate of 5.04%, with the lender seeking bids on a 100% cash basis. In a bid document uploaded on the bank website, the lender indicated no collateral backing these loan accounts of more than 10.61 lakh borrowers.“IndusInd Bank Ltd (IBL) invites bids from all eligible purchasers for sale on a ‘100% Cash Basis’ under public auction,” the document reads.Asset reconstruction companies (ARCs) are likely to be the primary bidders for the loan pool.At the end of the September quarter, the bank scaled back growth in its microfinance book. For the quarter, outstanding slippages in the microfinance book stood at Rs 2,259 crore, higher than Rs 1,988 crore in the June quarter. Delinquencies in the microfinance book were particularly concentrated in Bihar, Jharkhand, and Maharashtra.Also read: Mamata Machinery Share Price Live: Mamata Machinery Limited IPO to debut on D-Street today. Check GMP, Other DetailsThe lender posted a 39% decline in its September quarter net profit to Rs 1,325 crore, due to higher provisions.Over the past year, IndusInd Bank's shares have fallen by 40.7%, and by 41.75% so far in the current year. IndusInd shares closed flat on Thursday at Rs 932.15 on the BSE.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)