Globalization, Liberalization, Privatization and Nationalization Hold Less Meaning Unless Corruption Is Completely Uprooted from the Economy of the Country
WAT Topic: Globalization, liberalization, privatization and nationalization hold less meaning unless corruption is completely uprooted from the economy of the country
Post independence, Indian economy has seen many transitions till now. Form 50’s till 1991, it has followed the principles of Nationalization based on the Socialist principles which it followed from then prospering Soviet Union. But, during the crisis of 1991, when the country was on the brink of going bankrupt, economic reforms were introduced in the form of Liberalization, Privatization and Globalization and Indian economy went on from being a closed and planned economy to more of a market driven and mixed economy. Since then, the Indian economy has reached new heights. It is now, the tenth largest economy in the world and if adjusted to purchasing power parity, is the fourth largest. The growth rate of our economy is also third fastest in the world next only to China and Indonesia. But, although showing such high growth, has our country developed at such a pace? The answer to this question is a disheartening “No”. India, still, is very behind in the Human development Index (119, according to 2010 reports) and the economic growth has increased the unequal distribution of wealth in the country. So, the question arises, what went wrong? The primary reason for this can be attributed to corruption. Lets first look at the period when India was a planned economy and followed the principles of Nationalization. All the industries were state controlled and there was a system of “License Raj” during that period. Due to corruption, the industries were operating under losses and the quality of the products was also depreciating due to ignorance of the governing authorities. Adding to that, the vulnerability of foreign enterprises and private companies to venture into the market due to License Raj and corruption were also restricting the investment in the economy. This led to the crisis situation in the late
Post independence, Indian economy has seen many transitions till now. Form 50’s till 1991, it has followed the principles of Nationalization based on the Socialist principles which it followed from then prospering Soviet Union. But, during the crisis of 1991, when the country was on the brink of going bankrupt, economic reforms were introduced in the form of Liberalization, Privatization and Globalization and Indian economy went on from being a closed and planned economy to more of a market driven and mixed economy. Since then, the Indian economy has reached new heights. It is now, the tenth largest economy in the world and if adjusted to purchasing power parity, is the fourth largest. The growth rate of our economy is also third fastest in the world next only to China and Indonesia. But, although showing such high growth, has our country developed at such a pace? The answer to this question is a disheartening “No”. India, still, is very behind in the Human development Index (119, according to 2010 reports) and the economic growth has increased the unequal distribution of wealth in the country. So, the question arises, what went wrong? The primary reason for this can be attributed to corruption. Lets first look at the period when India was a planned economy and followed the principles of Nationalization. All the industries were state controlled and there was a system of “License Raj” during that period. Due to corruption, the industries were operating under losses and the quality of the products was also depreciating due to ignorance of the governing authorities. Adding to that, the vulnerability of foreign enterprises and private companies to venture into the market due to License Raj and corruption were also restricting the investment in the economy. This led to the crisis situation in the late