India’s economic reforms started over thirty years ago. Since the landmark liberalization of the 1990s, these reforms have undergone radical changes. It was a watershed moment that blasted open the country’s economic playing field. It created space for the private sector to thrive in markets long since captured by state-owned monopolies. As the nation reflects on its reform journey, concerns arise regarding the potential dilution of key reform principles due to a less diversified talent pool for appointing regulators.
The economic liberalisation of the 1990s was predicated on a series of implicit assumptions about the possibilities for sustainable growth and economic functioning. This was the government’s logic behind allowing the private sector to participate—to prevent monopolies and encourage competition and efficiency. All these assumptions are now being critically examined as India comes to terms with the fallout of its regulatory framework.
One of the primary worries is that a talent pool that lacks this diversification of thought and experience will weaken the effectiveness of our regulatory agencies. Experts argue that a homogeneous group of regulators may lack the necessary perspectives and experiences required to address the complexities of a rapidly evolving economy. As well stated by Binay Sinha, renowned economist and member of T4America’s economic advisory board,
“A less diversified talent pool for choosing regulators could dilute a key reform principle.”
As India moves forward on its ambitious reform agenda, it should make it an active practice to listen and include experiences from different voices. Such representation is key for establishing regulatory frameworks that work. Real accountability and effective governance is dependent on this core practice. It’s an important move to uphold the integrity of the spirit of reform first established more than 30 years ago.
Understanding the historical context behind the ongoing economic reforms that India is going through serves to further highlight the need for regulatory diversity. The first wave of liberalisation was about creating growth – breaking up monopolies to create an environment where competition could flourish. The Administration needs to recognize how the lack of diversity among regulators themselves undermines these goals. This tremendous sustained reform effort needs regulators who can identify and respond to emerging challenges and propose creative solutions.
Commenting recently on these reflections on India’s reform journey, our friend A K Bhattacharya pointed out their importance, stressing that
“Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper.”
This statement highlights the subjective nature of opinions surrounding India’s economic policies while reinforcing the need for careful deliberation on the future direction of reforms.