July 21, 2016

25 Years of Reforms: Why 1991 is a Turning Point of Similar Importance as 1947

Sanjeev Sanyal, Visiting Fellow at IDFC Institute, writes about the historic significance of 1991 as a turning point for India in this Economic Times article.


Sanyal describes how the socialist, Nehruvian regime benefitted only a small group of elites. "..a tiny group of planners led by PC Mahalanobis could decide how to allocate all economic resources. A handful of business conglomerates cornered all industrial licences. Encouraged by the thinking of Le Corbusier, urban planners could encode rigid masterplans that decided how people led their lives into perpetuity. A small clique of intellectuals and editors, supported by state-controlled media and academia, could tell people what to think...It was more than obvious by the 1970s that the Nehruvian model had failed. When reforms finally came in 1991, it was due to economic collapse and not a change in mindset...It is now 25 years since the liberalisation process was initiated...Despite obvious improvement in economic and social indicators, reformers still struggle to make a case for basic changes. Although remnants of the Nehruvian apparatus need to be unwound, the next 25 years should focus on building a new system. The alternative to the top-down, all pervasive Nehruvian State is not necessarily a minimalist, libertarian one. India needs a strong but limited State that focuses on creating an open framework that allows bottom-up innovation, risk-taking and social mobility...Most importantly, the State must be able to enforce laws and contracts and reform the existing legal system in India."


Read the complete article here


Topic : State Capacity / In : OP-EDS
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