Re­forms & Pol­i­tics

India Business Journal - - READERS' LOUNGE -

In 1991, when In­dia faced a ma­jor eco­nomic cri­sis, the gov­ern­ment asked the In­ter­na­tional Mon­e­tary Fund for a bailout loan. To pre­vent a re­peat, the gov­ern­ment in­tro­duced re­forms in the econ­omy in ac­cor­dance with the in­ter­na­tional trend of pri­vati­sa­tion and glob­al­i­sa­tion. This was a milestone as it changed Indian mar­kets and the fi­nan­cial sec­tor in the coun­try. For­eign di­rect in­vest­ment was en­cour­aged, public mo­nop­o­lies were re­stricted and ser­vice and ter­tiary sec­tors were de­vel­oped.

Since then, all sec­tors of the econ­omy have changed their ap­proach. The eco­nomic re­forms have com­pleted 25 years, and this book de­bates on the achieve­ments and fail­ures of this pol­icy. It draws upon the re­search in­sights and opin­ions of aca­demi­cians, schol­ars and prac­tis­ing man­agers who, apart from the anal­y­sis, also of­fer their views on the cor­rec­tive mea­sures needed.

In his es­say, Are Eco­nomic Re­forms Ac­cepted in In­dia? Mr Sinha notes that pol­i­tics will al­ways dom­i­nate eco­nomics in In­dia, at least in the fore­see­able fu­ture. He writes: "Politi­cians and po­lit­i­cal par­ties are risk averse, es­pe­cially as far as elec­tions are con­cerned. They would never like to put the ex­is­tence of their gov­ern­ment or their po­lit­i­cal fu­ture at stake for the sake of eco­nomic re­forms. Eco­nomic growth has never been an elec­tion is­sue in In­dia."

Mr Sinha adds: "Some­times, I feel that I may have been largely re­spon­si­ble for the de­feat of my party in the 2004 elec­tions" and adds that he can never for­get the lessons he learnt in that elec­tion. Mr Sinha notes that as fi­nance min­is­ter, he had raised the prices of kerosene oil from Rs 2.50 to Rs 9.50.

When he went cam­paign­ing in a re­mote vil­lage in his con­stituency and asked an old woman for her vote, the old woman held him re­spon­si­ble for rais­ing kerosene prices which had made her life dif­fi­cult. Such nuggets make this book an in­ter­est­ing read.

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