Thirty years past the historic Economic Liberalization, this is time for India to look back. The bold initiative from Narasimha Rao, the then Prime Minister and Manmohan Singh as finance minister brought about massive changes to the way India functioned under the Socialist system for half a century. The 1990s were the days of Globalization too, and India welcomed both these concepts. The nation courted Capitalism and gave a refreshing new life to the national economy. Its impact reached all, by way of a trickle-down effect but it also made the rich richer and the poor, poorer. Manmohan Singh, who went on to become Prime Minister, was among the first now to come up with an overview of the impact that the two major policy shifts have had on the nation. “Nearly 30 crore Indians have been lifted out of poverty in this period and hundreds of millions of new jobs have been provided,” he said. The reality is also that the liberalization process was left half done. Bureaucracy continues to have a stranglehold over the systems.
When Liberalization came in, a promise was that it spelt the end of the “licence-permit raj” and that there will be minimum controls on economic activities. In reality, things have not changed and those who want to start a unit will have a rough ride and have to grease many palms. While the central government came up with a subsidized food scheme for the poor during the UPA-II, what is happening is also that the nation is encouraging laziness. A day’s work fetches a labourer money enough to get cheap ration for a week’s family upkeep. China introduced Liberalization a decade or more before India. China grew by leaps and bounds. Here, growth was steadily on the decline before Covid arrived. Predictably, it took a nosedive thereafter. “The road ahead is more daunting than during the 1991 economic crisis,” Singh says. That was the time when, with its coffers empty, India was compelled to ship its gold reserves to fetch a huge IMF loan to run day-to-day governmental business. Singh lifted the economy from such a mess and he deserves all our praise. There are also the optimists in these days of despondency. Business magnate Mukesh Ambani feels India is on the right developmental track, and when it reaches age 100, by 2047, it can aspire to have an economy the size of the US and China. Yes, a post-script to this is that leadership matters the most.
