Geography Reference
In-Depth Information
Looking back, Ahluwalia has pointed to some lessons from the events of 1991 that are rel-
powers in favour of 'transparent market driven processes', as Chidambaram and others had
been in 1991. This is urgently needed now, not only nationally but even more so in the
states - especially in infrastructure, mining rights and changes of land use, which lead to
extensive corruption. Ahluwalia might have added that it is useful for the prime minister to
be in charge of ministries where reform is planned, as Rao was in 1991 with industry.
Second, both Singh and Chidambaram were prepared to take risks over how a new trade
policy would work in practice, even though finance ministry officials were not willing to
do the same. 'They suffered from the fear of flying syndrome,' says Ahluwalia. Third, the
events showed that, if political decision makers are 'clear about what they want', opposi-
tion from bureaucrats can be overcome. The other three points he listed were: it is easier
to make changes when there is already some consensus among policy experts; individual
reforms need to be part of a broad 'holistic' approach; and 'our much maligned system can
deliver results very fast when necessary'.
The bigger lesson, not mentioned by Ahluwalia, is that the reform process since 1991 has
been based on weak foundations, with little real substantive debate or popular acceptance.
There has been a popular mantra mouthed by politicians and others from the mid-1990s
that the 'reforms are irreversible'. That is broadly true, but it misses the point that this does
not mean that new measures can be easily introduced. A parallel claim that there has been
a consensus behind the reforms has never been true, as has been shown by resistance to the
government's plans from vested interests and political opponents during 2009-2014.
There is now not even a consensus on the priority that should be given to economic
growth, and how much it should be restrained in order to protect the environment and the
livelihoods of people currently occupying land that is needed for mining and other devel-
opment. There is an apparent consensus on the need for foreign investment, but that breaks
down when vested interests try to protect their business prospects in, for example, the de-
fence sector and in one or two other major areas such as insurance and retail trade and dis-
tribution.
There has been little debate on all this, and most policy changes after 1991 have been the
result of pushes and pulls by vested interests (often, euphemistically, carrying suitcases).
Many reforms that have (or have not) happened in industries ranging from telecoms and
banks to airlines and retail stem far more from such pressures than from reasoned analysis
and debate. Ratan Tata has said that he was told in 2000 that a government minister needed
a Rs 15 crore bribe before he would approve a joint venture between Tata and Singapore
Airlines. This would have opened up the aviation sector to foreign airlines but the move
did not pay the bribe and the tie-up with SIA did not move ahead until 2013.)
