Remembering ‘LPG’ Revolution

The Pioneer | 14 March 2016

The economic liberalisation which the Narasimha Rao regime ushered in the country and which has been carried forward by successive Governments, has changed the lives of millions of Indians for the better. But there have been dark spots as well that need review

Even as the public and media discourse in the country continues to remain obsessed with mundane daily developments including JNU and the World Culture Festival, the 25th anniversary of a significant event in the nation’s history is virtually going unnoticed. It was exactly 25 years back that a debt burdened India decided to break the shackles of the license-permit-quota raj and usher in Liberalisation, Privatisation, Globalisation (LPG) in a big way. Though the credit for India’s economic reforms introduced in 1991 is largely attributed to the then Finance Minister Manmohan Singh, it must be conceded that the same would not have been possible without the sheer political will and determination  shown by the one of the best Prime Ministers India has had, PV Narasimha Rao.

Unfortunately, the scholar-Prime Minister, whose vision and leadership, also ensured the return of normalcy in militancy-torn Punjab, never got his due even after his demise, particularly from the party to which he remained loyal till death. Strangely, Prime Minister Indira Gandhi got full credits for the 1971 victory over Pakistan and not the then Defence Minister and Dalit icon Jagjivan Ram, whereas all blame was apportioned to the then Defence Minister Krishna Menon following the debacle with China in 1962, and all out attempts were made to save Jawaharlal Nehru from the disgrace.

Coming back, the advent of LPG changed the nation’s economy and lifestyle in an unprecedented manner for good. The Soviet-inspired Nehruvian socialist and highly regulated economy became market-oriented, ushering in privatisation and foreign investment in a big way. From reduction in import tariffs to de-regulation of markets, tax reduction and gradually reduction of subsidies and sale of stakes even in profit making PSUs, the changes were immense. Successive ruling parties have followed the line though political compulsions have not allowed radical labour reforms and substantial reduction in agricultural subsidies.

From a controlled economy, where the Union Government even manufactured bread and television sets, we have moved on to an era where even defence equipment are being produced in the private sector. Gone are the days when people queued up outside the office of the Chief Controller of Imports and Exports in India under the Ministry of Commerce located in Udyog Bhawan in New Delhi to import a car of their choice. We have moved on to an age where not only the best of cars are available in India but also wherein Indian manufacturers are producing the best of cars outside the country. From an importer of basic necessities to an exporter of high-end goods, India has come a long way.

Back home, it has become a consumers’ market and products of international quality are available just a mouse-click away. One remembers how shirts and trousers were bought from DCM stores and stitched. Travelling by air was a luxury, nay a fantasy, most Indians could only dream of. Doordarshan channels with their frequent breakdowns and ‘sorry for interruption’ messages were the only entertainment option. Half our lives were spent standing in queues outside hospitals, post offices, bus stands, ration shops, kerosene shops etc.

Owning a house was a towards-the end-of-career dream, as the only major source for most middle-class families was the pension and gratuity they would get post-retirement.

The situation in the rural areas was worse. Modern facilities were unheard of and inaccessible to most. Open defecation was the most common sight with few honourable exceptions. A family owning a car used to be the centre of curiosity in most villages and telegram was the only medium to communicate both birth and death.

Indeed, life has changed for the better. But progress has come at a price. Contrary to perception, over the past two and a half decades, the proportion of corruption has increased manifold. In fact, the `64 crore alleged kickbacks in the infamous Bofors scandal looks like peanuts in comparison to the lakhs of crores in graft charges we hear of today.

If KBK (Koraput Bolangir and Kalahandi) districts of Odisha were notorious for their starvation deaths in pre-liberalisation India, farmer suicides in Vidarbha, Bundelkhand, Andhra Pradesh and Karnataka have become black spots on India’s growth story. If banks were swindled to the tune of `4,000 crore in the Harshad Mehta scam which broke out in 1992, more than two decade later, a leading industrialist is accused of running away with over `9,000 crore he owes to different banks.

The plastic card economy and easy availability of loans just a phone call away has made access to money and a comfortable life easy to middle-class India, but Indians who survived the recession of the 1990s largely due to their saving and safe investment habits are today an increasingly indebted lot  —caught in the trap of EMIs for their homes, cars,  domestic gadgets and even holidays.

This has led to increased stress and consequent surge in lifestyle diseases such as diabetes and hypertension. The availability of fast foods and resultant impact on health has contributed further.

Perhaps immeasurable are also the ever-growing erosion in values and ethics, the breakdown in interpersonal and social relationships, increased insensitivity and trust deficit leading to new types of crimes. One can go on and on. Two and a half decades of LPG has had its positives and negatives.

Fifty two per cent of today’s India was born after 1991. Twenty five years is perhaps the most appropriate time for both the country and the society as a whole to recollect and review the gains and losses, the long term impact of liberal policy reform as also the changes the market forces continue to bring into our lives. It is important to understand and document for the future generations how life was before 1991 and how these reforms impacted the lives of the ordinary citizens.

One such initiative has been taken up by the Delhi-based Centre for Civil Society. With a view to educate future leaders on the significance of these reforms in their lives as well as ‘celebrate the promises it fulfilled for those that lived through this era’, the CCS project aims to provide them with a holistic idea about life during the pre-1991era. Through its portal, the public policy think-tank plans to bring to light human interest stories from across the country highlighting the crucial role that liberalisation played in improving the lives of people.

It is important that such initiatives are multi-faceted and not one-sided and provide a holistic picture that would enable the country to undertake a mid-term review of the achievements and failures and go in for course correction, if required.

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