Last Updated 28 May 2020

Bureaucracy and Liberalisation

Category Bureaucracy
Essay type Process
Words 748 (2 pages)
Views 374

After independence the newly emerged Indian State was characterized by the dominant role in all the spheres of society. It was a welfare state whose objective was to secure political, social and economic justice to all the sections of Indian population. The Westminister model of parliamentary democracy with universal adult franchise was adopted. In social field, various evils in the society were sought to be eradicated by the State.

Untouchability was abolished and social reforms were undertaken. In the economic sphere, the state not only regulated the market, it also emerged as the major employer providing employment opportunities to the people. India adopted the policy of mixed economy/a powerful public sector was created. For Nehru, the public sector undertakings were the temples of modern India. Their objective was to assist in the rapid economic growth and industrialisation of the country.

Over the years their number and investments have grown in size and quantity. While in 1951, there were five central public sector undertakings (PSUs) with an investment of Rs 29 crores, now there are as many as 243 enterprises with a total investment of Rs 1,78,628 crores. The private sector was also to play an important role in the mixed economy. However it was highly regulated and controlled economy as far as the private sector was concerned. Rightly it was called the licence-quota permit Raj.

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However the collapse of socialist political and economic system in earstwhile Soviet Union and other socialist states led to the emergence of a global economy which meant introducing competitive markets, liberalising foreign trade and opening up the economy for foreign investment. According to Marina Pinto "Liberalisation is the policy of removal of restrictions, trade barriers and protectionist measures to enable the free flow of capital, technology and services. It is generally seen in the context of globalization and privatization. " In eighties liberalisation process started taking place in India economy.

But the severe foreign exchange and fiscal crisis in early 1990's compelled India to take massive loan from IMF and world Bank which as critics point out, dictated India to liberalise its economy. This was done under the leadership of Dr. Manmohan Singh, the Finance Minister in P. V. Narsimha Rao Government. The New Industrial Policy of 1991, stated that "Foreign investment and technology collaboration will be welcomed to obtain higher technology, to increase exports and to expand the production base. " The Licence-quota permit Raj has been given a good-bye and the economic system has largely become competitive.

Even in the public sector the nine major public sector undertakings or Navratnas—Bharat Heavy Electricals Limited (BHEL), Bharat Petroleum Corporation Limited (BPCL) Hindustan Petroleum Corporation Limited (HPCL), Indian Oil Corporation Limited (IOC), Indian Petrochemicals Corporation Limited (IPCL), National Thermal Power Corporation Limited (NTPC), Oil;National Gas Corporation Limited (ONGC), Steel Authority of India Limited (SAIL) and Videsh Sanchar Nigam Limited (VSNL) have been given considerable financial and functional autonomy.

The Government was also considering to include more public sector undertakings in this list. However this does not mean that the role of the State would recede and it would only concentrate on the maintenance of law and order. The state continues to be a welfare state. It will continue to ameliorate the conditions of poor and down-troddens. The economic policies are to be realistic. Jagdish Bhagwati, one of the leading economists says that the first fifty years of independence has been "half a century of foolish policies, which cost her (India) growth and hence a significant opportunity to ameliorate poverty. Now rational policies are to be drafted and implemented with due regard to monitoring of policies in stages. This also means that the generalist administration will either be substituted by the experts or they be given their due place in the administration. The bureaucracy will have to be responsive and transparent and infact the entire work ethos has to be changed. It also means maximum possible delegation of authority and sufficient decentralized control. Ultimately it may lead to debureaucratization of the administration.

The 73rd and 74th Constitutional Amendment providing for local self government is designed to transfer the developmental functions to the local self government. We may be witness to gradual shrinking of the state and its administrative machinery. But this does not mean that state would recede in the background. It may be a scenario where we have a reoriented, purposive accountable and transparent administration as a friend, philosopher and guide. The essential condition for all this is poliucal will, integrity and honesy at higher levels of politics and de-criminalisation of politics.

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Bureaucracy and Liberalisation. (2018, Sep 30). Retrieved from

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