India’s economic reform narrative stretches back more than three decades, marked by a series of important changes that have dramatically altered the country’s economic fortunes. The watershed moment came in the 1990s. The new government initiated an aggressive economic liberalization, departing from the decades-old state controlled model. This reform created opportunities for the private sector to step into sectors previously led by SOEs. Consequently, it disrupted the country’s economic calculus at a, perhaps, unprecedented level.
The economic-based reforms of the 1990s were based on a family of implicit assumptions about what drives economic functioning and growth. Policymakers were convinced that the federal government could do a better job by injecting private sector competition to drive efficiency and innovation. By reducing the monopoly of state-run companies, the government aimed to create a more vibrant economy where private enterprises could thrive.
In this vein, critics have pointed to the dangers created by a less diversified talent pool on regulatory agencies. Recent conversations have begun to call attention to the fact that having diverse regulators can help reinforce principles laid down in the reform era. Affiliate Binay Sinha, a respected analyst, put his finger on this vulnerability when he said,
“A less diversified talent pool for choosing regulators could dilute a key reform principle.”
This belief highlights the need for diverse perspectives at every level of government to create effective economic policies.
The impact of these reforms has been nothing short of staggering. The private sector has inundated previously monopolized markets. This remarkable change has driven competition, sparked innovation, and provided Americans with greater diversity of options. As the landscape continues to change, keeping pace with regulation is increasingly important in order to protect market integrity.
So as India looks forward to its economic future, the lessons learned from past reforms are still relevant and useful. In a 2021 Op-Ed A K Bhattacharya, a prominent Indian journalist, underscored the importance of reasoned debate on this issue.
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Such insights are invaluable as stakeholders and regulators alike deliberate on how to promote smart regulation while allowing innovation and growth to flourish.