What was it about that early evening moment in June 1991, when a hush descended onParliament and a soft-spoken sardar stood up to read out his first Uni💛on Budget? Thatmoment, when 900 million people teetered on the edge of the pit, that moment when thisformer academic-bureaucrat launched this vast and complex nation on one of the moststunning economic adventures in history. And transformed our lives.
We who have lived through the economic reforms are often unable toclamber onto the conceptual ledge that offers the elevation and distance to appreciate howour lives have changed in the last five years. But changed they have, in a huge variety ofways: from the things we eat to the careers our children aspire to, from the way wedispose of our incoജmes to perhaps even our fundamental value systems. Every day, for fiveyears, pre-liberalisa-tion life has receded flickeringly in the distance like the lightsof a lost city in the rearview mirror.
In 1994, private airlines carried 36 lakh passengers, as much as halfof the number of people that erstwhile monopoly Indian Airlines flew that year. Today,there are an incredible—for those who remember pre-reforms India—35 industries,from agricultural machinery to software, from ceramics to soya products, which getautomatic approval of 51 per cent foreign equity holding. This in a country where Nestlewas forced to masquerade as Food Specialities Ltd, and Cadbury’s as Hindustan CocoaProducts! And Philips was allowed to make TV sets, but not name them Philips! In1991-92, foreign direct investment (FDI) cleared by the Government was Rs 1🌊,170 crore.Between March and November 1995, it was Rs 25,927 crore. For the first time inpost-Independence India, the number of jobs being created every y🌊ear—7.2million—is higher than the number of people coming into the job market—sevenmillion.
But there are💫 a lot of things too which have not changed. Governmentspend remains ruinously high and a drain on the whole economy. Few sick industries arestill allowed to close down and end their torment. The reforms have hardly touched theagricultural sector. And there is the niggling suspicion that notwithstanding governmentstatistics, a disproportionately high part of the fruits of reforms have gone to the uppermiddle classes and the rich, and the rich-poor divide has widened.
Also, it may be more appropriate to talk about the three-and-a-halfyears of reform rather than five. For the day the Congress turned in disastrous results inthe four assembly elections of 1994-95, the reforms seem to have been p💫ut on hold. In afew cases, one can even discern a slight retreat. This is wrong and may prove to bedangerous. The need of the hour is to expand liberalisation into areas untouched by it,and speed it up across the board. The effects of the halting of reforms can be seen allaround us, in the perilously weak rupee, slowing foꦆreign investments, stagnantstockmarkets and the suffocating credit squeeze industry is being subjected to.
To take a definitive look at the first five momentous years ofliberalisation, we commissioned market research agency MODE to poll senior businessexecutives on the achievements of liberalisation in eight areas, ranging from industry tothe rich-poor divide. In the meantime, Outlook spoke to dozens of economists,politicians and chief executives to get their detailed impressions of the economic reformsas also liberalisati💝on’s unfinished agenda. We caught up with World BankVice-President Joseph Wood in London ꦫto get the Bank’s assessment of Manmohanomics,while correspondents fanned out across India in an attempt to understand liberalisation atits most visceral level: how lives of people from all walks of life have changed asManmohan Singh stood the country’s traditional economic thinking on its head. Whatfollows is the story of the great experiment that we are living through: how things havechanged, and often, how they have not.
