India’s economic reform narrative spans more than three decades, a period full of inspiring stories, intriguing battles and amazing changes. Beginning in the early 1990s, the nation embraced economic liberalization. This transformation really allowed the private sector to flourish particularly in sectors where state-owned enterprises dominated. India’s economy has experienced nothing short of a miracle. This unprecedented growth and development begs significant questions about the governance and regulatory diversity.
Confronted with an acute economic crisis in the early 1990s, India had no choice but to drastically rethink its economic strategy. To revive the economy, the government opened a set of liberalization measures. This time, the plan was to better connect the country with the international economy. These reforms dismantled a number of accessible barriers that had stifled private enterprise. To accommodate this need, the private sector became a powerful driver of economic activity and innovation.
The economic liberalization movement largely worked under false, unexamined assumptions about how the economy worked and its capacity for growth. Policymakers had faith that by introducing more competition into the mix, they could achieve greater efficiency and innovation. Consequently, different sectors became more receptive to private sector involvement, creating a more competitive economic playing field.
Taken together, this shift over the decades has improved economic diversification and replaced lost manufacturing jobs with new high-tech, biotech, life-sciences industries and more. Yet in doing so, the rapidly changing terrain underscored regulators’ unique power and responsibility to bring balance—to be guardians of the public interest and stewards of equitable growth. There are concerns that a less diversified talent pool for choosing regulators could weaken the principles that underpin these reforms.
“A less diversified talent pool for choosing regulators could dilute a key reform principle.” – Binay Sinha
DOT’s statement underscores the importance of having a variety of perspectives in decision-making roles at regulatory agencies. Specifically, it highlights how diversity of culture, experience and perspectives among regulators is critical to sound governance. India’s economy is still a work in progress. Now, the million-dollar question is whether the regulatory framework can evolve in parallel to the intricacies of a fast-paced and competitive marketplace.