India is a land renowned not just for its myriad and spell binding diversity, but also for its mind numbing economic policies and extraordinarily convoluted statues. Mystical at best, and macabre at worst, India’s socio economic policies post-Independence have evoked reverence and revulsion in equal measure. Populist, Pedantic, Pithy and Pragmatic, India’s trajectory towards becoming the second fasted economy in the world, – suffering an existential Balance Of Payments (BOP) crisis along the way – makes for some riveting analysis. While all the tomes in the world would not do justice to such an endeavor, it is essential that every Indian connected in some way or the other with policy making or pursuing her profession in the field of Economics, or even nursing a curiosity to understand the progress of her nation, acquire a fundamental grasp of the nation’s progressive journey thus far.
Gautam Chikermane, Vice President at Observer Research Foundation and a renowned author, in his book, “70 7POLICIES THAT SHAPED INDIA -1947 to 2017, Independence to $2.5 Trillion” provides an exhilarating and whirlwind tour of the genesis, impact and ramifications of the barrage of policies instituted by the Indian Government since Independence. Using a marvelously ‘condensed’ approach – a self-limiting 350 words per policy – Mr. Chikermane breezes through 70 path breaking policies that both made and almost marred India. However, supplementing this precise narration is a plethora of endnotes that allow the reader to traipse and trawl through the intricacies and nuances embedded in each such policy. Commencing with the archaic Controller of Capital Issues Act and concluding with the most talked about Goods and Service Tax Act, 2017, Mr. Chikermane takes us along a path, both draconian and delectable.
Mr. Chikermane illustrates in startling detail, the futility of instituting a slew of bureaucratic committees when the actual crying need of the hour was a firm push to initiate structural reforms that would address systemic issues. For example, to unearth the ails plaguing Asia’s first Free Trade Zone, the Kandla Free Trade Zone in just six years, between 1978 and 1984, there were seven attempts to fix the problem: a committee to look into the problem hindering the growth of KAFTZ (1978); Alexander Committee on Import & Export Policies (1978); Review Committee on Electronics (1979); Dagli Committee on Controls and Subsidies (1979); Tondon Committee on Export Strategy (1980); Committee on FTZs and 100 percent EOUs (1982); and Abid Hussain Committee on Trade policy (1984).
In a frenzied bout of nationalization, a primary natural resource such as coal was targeted and the government nationalised 937 mines: 226 coking coal mines and 711 non-coking coal mines. As Mr. Chikermane states, “Because nationalisation was done in a piecemeal manner, by the time it reached non-coking coal mines, many mines were reported to have been stripped of their plant and equipment. In terms of outcomes, the first decade of coal nationalisation saw “political patronage of mafia activities” and bureaucratic corruption.”
The quirky implementation and execution of some laws, as Mr. Chikermane exposes, test the very ingenuity of foolhardy imagination. For example, in exercise of the powers bestowed upon an ‘inspector’ under the Standards of Weights and Measures Act, 1976, entrepreneurs were criminally charged and sentenced to be imprisoned for two years for using “M.R.P.” instead of “Maximum Retail Price”. This absurdity, was in the general interests of both business and commonsense set aside, courtesy a 29 July 1997 order of the Andhra High Court in the Lucas Indian Service Ltd and Others vs. the State of Andhra Pradesh.
Mr. Chikermane also informs his reader about the internecine squabble between the executive, judiciary and the legislature that acts as a spanner in the works even when an avowed objective is a furtherance of egalitarian measures. With a view to abolishing the insidious ‘Zamindari’ system it was proposed to reduce the right of property from a fundamental right to a legal one. Thus was enacted the Abolishment of the Right to Property Act, 1978. However, between 1951 through 1976, seven amendments—1st (1951), 4th (1955), 17th (1964), 25th 273 274 275 (1971), 39th (1975), 40th (1976), and 42nd (1976)—were brought in, all of which were struck down by the Supreme Court.
While of these policies have been epochal in nature, few others can best be described as ill conceived. The Statement on Industrial Policy, 1991 is undoubtedly a torch bearer for the former category. Pioneered by the late Prime Minister P.V.Narasimha Rao and executed by the Prime Minister in waiting, Dr. Manmohan Singh, the policy ushered in an era of industrialization and set India on a path leading to territories unchartered and opportunities unexplored. As Mr. Chikermane asserts, “in the economic history of India, 24 July 1991 will be remembered as the date when five major initiatives were unleashed.” These initiatives included:
- Abolishing 329 industrial licenses in addition to automatic clearances for projects;
- Flexibility in FDI approvals, and the formation of a Special Empowered Board;
- Foreign technology agreements, under which automatic permissions would be given in “high-priority” industries;
- A review of the public sector portfolio through a de-reservation and, referring sick public sector enterprises to the Board for Industrial and Financial Reconstruction;
- An amendment of the MRTPC Act to remove threshold limits of assets, with emphasis on controlling and regulating monopolistic, restrictive and unfair trade practices
The book is structured into 8 chapters with each Chapter denoting a decade. Key policies ushered in each decade under consideration is elucidated in a manner that is simple, easily understandable and thought provoking. However, the greatest attribute of this work is its altruistic motive. The book is absolutely free and can be downloaded from the Observer Research Foundation website. The link for the download is:
From first-hand experience, I would urge everyone having a penchant towards economic reforms and policy making to download their copy. Rest assured they would come out curious, if not wiser.