Article by Richa Singh from Economics Wing, GAEE JMI

“For each according to his abilities. To each according to his needs,” said Karl Marx, the architect of the communist revolution that swept across continents in the last century. Many countries adopted this philosophy with variations to suit their needs. It was undoubtedly holding forth a promise of a more egalitarian society where everyone was equal. This was, however, contrary to human nature, which works optimally in a more free, vibrant and competitive environment. Moreover, it led to the decline of communism and another socialistic form of economies, in favour of the free enterprise world of the west. The socialistic form of government adopted by us after independence was able to nurture industrial development and safeguard the interest of the poor. However, it was unable to provide the large-scale economic development that is crucial for us to make the country strong and stable. To this end, the economic liberalisation prompted the entry of multinationals with capital and technology, which was a welcome step in the right direction.

The advantages that would accrue to society would be making available quality products at competitive prices by encouraging domestic companies to compete with multinational corporations. It would also check inefficiency in the public sector, which would be brought to the four by competition. The influx of new capital and technology would lead to an industrial revolution, imperative for a developing country like India. We have just seen the revolution in the automobile industry after liberalisation. Today we have buyer’s market forecasts and scooters, and the consumer can choose from a vast range of world-class quality products. This is indeed a far cry from what the consumer could get in the erstwhile regime that existed just a decade ago.

Besides depriving the consumer of his right to get quality products, it also increased corruption because of the artificial controls exercised by the government. The liberalisation of the economy can effectively check this. It would help the government channel more investment in infrastructure, healthcare, and social security, which need immediate attention. Furthermore, it will also help effectively tackle the insurmountable problem of unemployment and poverty, which are indeed grave.

Just like all changes, this would also spell initial problems for the citizens and the country. It could be due to an increase in prices of some essential commodities because of the reduction in the subsidy given by the government. There could also be problems in restructuring a few public sector industries that might be rendered redundant. This would make quite a few people jobless. Nevertheless, these sacrifices would have to be made.

Economic liberalisation is, but the need of the hour. It perhaps offers the only panacea for the Herculean problems being faced by the citizens of the country. Therefore, we must rise to the occasion and prove to the world that the skill of our people and the products we make are second to none. This can only be possible when our economy is liberalised and allowed to grow with complete freedom.

(Richa Singh is a B.A.(Hons.) Economics student at Jamia Millia Islamia, Delhi, and a part GAEE JMI, an autonomous branch of Global Association of Economics Education in India. The views expressed are personal and they do not purport to reflect the opinions or views of GAEE or its members.)