The story of India’s economy under the Nehruvian socialist framework has been a stunted one. Afflicted with License Raj, political patronage and crony favoritism, the Indian economy functioned largely as a political economy that bred an ecosystem of corruption and economic stagnation for nearly four decades after Independence. Even as the country slowly disentangled itself from the outdated crony socialist system by way of liberalization and economic reforms in the 90s, it reeled under massive surges in inflation and an out-of-control fiscal deficit despite a healthy growth-rate in the decade before 2014.
It is only now, under the visionary leadership of Narendra Modi, that the story of India’s economy is showing signs of a tectonic shift. As India surges ahead on the developmental fast track, the willingness to take risks, the proclivity for out-of-the-box solutions and the ‘can-do’ approach of the Modi government is making the world sit up and take notice.
Noted economist, author and environmentalist, Sanjeev Sanyal spells out his idea of leveraging the Indian economy into one based on social churn, reforms, innovation, risk-taking and most importantly, a framework grounded in the application and imposition of rules.
He elaborates on how fundamental changes like reforming the complex and indirect tax system, regulating inflation control thereby bringing down the Cost of Capital and strengthening manufacturing, reining in the fiscal deficit as well as boosting infrastructural expansion, are practicable only by introducing structural frameworks of governance that will not only maximize governance but pave the way for long-term economic development.