Was the License Permit Quota era better than the Reform Era in India?

Question

During the years of Democratic Socialism, the stalwart opponent to Congress and founder of Swatantra Party, late Mr Rajagoplachari, a protagonist of Free Enterprise, used to call the Govt the Licence Permit Quota Raj (the rule of restrictive economy that breeds corruption in bureacracy)! But even the Bofors scam that was considered the worst ever seen in India was only of the order of Rs 40 crores..!!

But the Reform Era (after 1991) had seen steady and unprecedented scams in the country and one wonders what the shrewd politician Rajaji would say of the Free Economy (India brand) if he was alive today!!

The share market scandal of Harshad Mehta committed with connivance of officials was exposed in 1992 in the media and was of the order of Rs.5000 crores!

The hawala scandal of 1993, sugar import scam of 1994, fertilizer import scandal and cattle feed scam (of Bihar) exposed in 1996, Congress Minister Sukram's corruption case of 1997, UTI scandal of 2001, fake stamp paper mega scam of 2003, etc etc, up to the 8000 crore Sathyam Computers scandal, the himalayan Spectrum scandal of 70 plus k crores and the latest CWG loot to an estimated tune of 8k crores..

Does this disturbing trend reveal that the Reform Era marked by free trade and least govt restrictions (including normal official / political vigilance on frauds at higher levels) show that PLQ Raj was better? Or is it an aberration independent of the economic policy, purely relating to the erosion of political ethics in public life?

Please share your thoughts, with some specific reasons for the fall of public standards.

Answer 1

I understand the true suggestion inserted in your Q. With all the lofty outputs envisaged in the wedlock of socialism and democracy, hoping to achieve economic equity in society, without the curse of regimentation, the two never went together. Neither there was equity nor total liberty. The PLQ regimen worked more to breed corruption and nepotism rather than usher in equity or growth either!



But the Reforms agenda resorted with great hopes, amid alluring promises of experts, had turned to be greater evil, with misleading growth and concentration of wealth, both by right and wrong means among few! While the rightful edge that the system placed at the disposal of traders, exporters, shae market investors, industrial producers, etc, to gain greater share of wealth generated, the wrong wealth usurped by greedy ones among business and political community, had surprised and scared the average citizens and experts alike!



At this rate the Reforms appear to outsmart the evils of PLQ regime which it replaced! But I don't believe that you had raised the point in the economic ideological context, so much as in ethical context, going by the additional points you had placed. Yes, a set of people already working at cross purposes (planning for development and implementing for self interests) under a vigilant control system in the past, should only be expected to have free play under the liberal, least controlled Reform regime, now.



The single problem is the absence of the right leadership in the generation that followed the range of leaders known for high levels of wisdom, integrity and dedication - with all ideological variations not withstanding - after the 1970's! The subtle deviancies that emerged in the distant past, had grown into full fledged, flagrant criminality now!



So, yes, the evils of Reform regime (in Indian context) had made those of the PLQ regime, seem small.



The pity is that experts like Dr Singh and Chidambaramji are talking in terms of channelling the ''gains of development'' to minorities or Maoists, under weird excuses, as if the other citizens BPL are getting the 'gains'!



Pure political rather than economic wisdom is evident in their speeches that would hurt any sincere and patriotic person. Lakhs of crores of public money and wealth are being siphoned off by the elite citizens like Ministers, Industrialists, business families etc, but Mr Cleans are simply telling us **** and bull stories about growth rates and development!!

Answer 2

Yes sir, in the socialistic era, the people had to confront only the domestic sharks engaged in corruption, while in the Reform Era we have exotic sharks also to confront against acute exploitations, to the extent of crushing indegenous business - particularly even the small business - industries and services as well !



Besides, the play of money in the mysterious Share Market, the online trading frauds, the Co frauds of sorts etc that you have listed had also grown beyond control, with suspected abetment of govt Ministries and bureacrats.



Ms Jaya (AIADMK chief) once put a series of questions on play of foreign money routed through the Share market for terrorist uses, thanks to the exemption granted by govt to keep identities of the foreign investors secret, etc. But then FM, Mr Chidambaram never answered her questions directly and pointedly, but simply brushed aside in his characteristic sarcastic dismissal, that was criticised in select media also.



For, govt is more keen to attract invests rather than apply safety measures to prevent misuse of the exemptions. Many critics did agree with the opposition that the exemptions played havoc in several ways detrimental not only to economy but security of the country as well. But then Govt turns a deaf ear to either criticisms or good counsels!

Answer 3

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Answer 4

You are referring Bofore,Harshad Mehata etc why Satyam is not in your mind.



In case you need exponental growth which is pure Capitalistic thought you can not think about Quota, permitt etc. But making economy free is only for special class od\f society. Consider Vedanta case and you will know the truth.