India began a very ambitious and arduous journey towards liberalization to inject transparency into its system in 1991. This journey is still not over because the desired goal is not that easy to achieve. Nevertheless, India's efforts have been fairly successful in getting rid of a model of misleading statistical facts and figures pattern, which was in practice for decades. Corruption and vested interests due to Government interference in all areas of economic and social interest and undesirable partnerships rule the roost even today. The Government, despite its best efforts, has failed to set up a fool-proof system that can change the state of affairs.
Since independence, the models of controlling the economic administration remained in the hands of the political Nethas and administrators in the Government and select groups of private people. Financial reforms after liberalization in 1991 have applied a brake on such spurious economic patterns. Financial liberalization has undoubtedly transformed the configuration of Indian trade and commerce sector. Those corporate enterprises in private sector that have earned name and fame today were not at all in existence in '90s. Most of the companies, which came into existence after liberalization, are progressive children of new economic order. The opinion that Liberalization threw the doors of opportunities wide open clearing the deck for an innovative change particularly in nation's private sector is fully endorsed by the majority of the populace.
The looming ineptitude
Paradox, as it may sound, the same change-trend is not to be seen anywhere in either Government or Government controlled institutions. The reasons attributed for 'no change or little change' are due to lack of reforms in the public sector, scandals, and ineptitude of people at the helm of affairs.
Taking a look at the 1957 scandals that shook the administration of the nation, we find, the most prominent one that deserve to be mentioned in this context is LIC's huge investment of RS. 12.4 millions in those dead or dying companies, which belonged to a highly influential Kolkata based industrialist and share broker, Haridas Mundra. This scandal revealed the truth how a public institution like LIC had to yield to the pressures of the administrators and political bigwigs in the government for selfish motives and vested interests.
Under the severe pressure of these fraudulent people, LIC had to invest such a huge sum well before it came to the knowledge of LIC investment committee. By then, the entire process of investment was over. LIC, needless to say, lost most part of its investment. The then finance minister Krishnmachari had to resign on account of this fraud. Shameless administrators of public sector banks and insurance companies continue to indulge in such fraudulent practices to favor their nearest and dearest ones even today. The best recent example is that of Kingfisher Airlines.
Government institutions have failed to go with the new economic order after liberalization. When the nation's economic system is treading the path of progress, the government institutions are moving in opposite direction. According to Harvard University Professor Lant Pritchett, transparencies, 'rule-bound' and 'opportunity-free' are crucial rudiments for success of a rule-economy. Regrettably, in India, it is a 'deal-economy' rather than a 'rule-economy'. Politicians, bureaucrats and industrialists are strong players of deal-economy in the whole system.
Influence of Money
The NDA government by Narendra Modi has been moderately successful in curbing in Delhi's deal-political development. But the situation in other states continues to be worst than what it was earlier. Modi has been talking about the need of a changeover from deal-administration to rule-administration. Unless proper rules and regulations are put in place, it is impossible to control corruption and government may invariably be forced to dance to the tunes of vested interests.
Economy bound by stable policy and rules and regulations provide a frame-work that creates opportunities to all industrialists to exhibit their competence and competitiveness. At the same time, it reduces the extent of influence of money and political connections in a democratic system. Twenty five years after liberalization, the Government is striving hard to bring in a change in administration through transparency, healthy competition, competence, dynamism, new inventions and innovations, and brilliance as the yardstick. For achieving this, a fool-proof system should be put in place. Otherwise, a storm of schemes launched by the Government with fanfare like Make in India, Start up India, Stand up India, Zero effect and Zero defect, etc sound hollow and unworkable in the absence of a transparent system.
(The wrticle was written pre demonetization)
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