Let us first consider as to what really does this word of economic liberalization mean. This means in very simple terms, a free market economy. The idea of liberalization endorses to is to eliminate an inefficient and non productive system.
It was during the early eighties that, the need for boosting up Indian economy was first felt. Even though the performance in all sector, the economy had not yet developed an strength to really take off. Moreover, even by this decade of the eighties the benefits of all the development had not yet percolated down to the masses. Economic progress was undoubtedly seen but, it was felt that, it was not enough to propel the engines of growth. While India was still languishing under the pains of undergrowth, the economies of China, Malaysia, Indonesia, Taiwan, and Singapore were performing very well in contrast. There had been a marked rise in their per capita incomes which were enough to provide good standards of living to their entire populations.
At this juncture, the Indian Political scenario changed and in 1989, Rajiv Gandhi came to power. It was he who decided that, now it was high time that India should also come towards a free market economy. The economic front of all hues welcomed this move. The idea was to get rid of an inefficient and unproductive system and bring in a new and transparent economy which would also globally oriented. It was now that imports were liberalized, exports increased, all because an efficient Exim policy. Import of gold was liberalized in the 90s, and it was now decided by the Government to open Indian markets for foreign products and technologies.
After the death of Rajiv Gandhi, there were continuous changes in the political scenario, but these reforms managed to continue. The years 1995 – ’97 witnessed a slow down in the economic growth in the regime of the United Front Government. However, from the year 1998 onwards the new BJP Government of Atal Bihari Vajpayee has to undertake the responsibility of continuing the economic reforms started in the eighties. This present Government of the BJP has done very well by bringing more items for importing, under the category of Open General License (OGP), which is expected to promote more and better dialogue between importers and foreign vendors for their particular items.
This pace of economic liberalization would also show in terms of lay off of inefficient staff of the PSUs. This step though harsh is quite inevitable, e.g. the Government has for decades been paying salaries to useless staff of the National Textile Corporation Mills, a number of sick mills of the NTC may have to be sold off to the Corporate Sector. With a rapid pace of economic liberalization, firms from other countries would fill our markets with quality goods at cheaper rates. The Indian fill our markets with quality goods at cheaper rates. The Indian manufacturer is already feeling the pinch in the Sectors of the computer, textiles, light machinery, consumer electronic goods, and several other consumer goods items.
With the liberalization of economy, it is imminent that, exports and imports would both get an impetus, thus fastening the economic growth of the country.
Let us now analyse how this economic liberalization would help the common Indian masses. This liberalization would enhance the living standards of the Indians in general. The Indian consumer would now have a wide range of choices in television, music system, cars, clothes and textiles and several other consumer products. This has come into being because of the competition with foreign players in India. Computerization is expanding at a very fast speed, and so now, we are producing the best machinery products and services with foreign collaboration. Redtapism is also seen to be reducing, and the once adamant bureaucracy is now seen helping in the growth of Indian economy. The latest techniques in management are now being adapted by us.
Besides these advantages, the Private Sector has also been allowed a free hand in domestic foreign trade. The system of licensing has been liberalized.
Now, the rural masses are also enjoying the advantages of the liberal policies of the Government. All rural areas now have access to colour Tvs, cable network and telephones. The STD and ISD have also reached the interiors of rural India. Besides just these, the rural people are also now enjoying a better standard of living, due to the coming of new and cheaper technologies in the Indian economy scenario refrigerators, TVs, computers, water pumps, health facilities, medicines transport and vehicles are the blessings of this liberalized economy.
This flourishing of a liberal economy of India is of course, not without its drawbacks. The multinationals who have entered the Indian scene, have elbowed away several local competitors from the scene, which has made the local manufacturer suffer heavily as, they have lost the battle in the competition against Multinational Companies. This economic liberalization has opened for us huge vistas of a free market system. In this system, the rich may be able to compete but the 52% of our population that is below poverty line will no longer succeed in getting a Government loan or a grant, so, this small business community will get enmeshed in the labarynth of absolute poverty. Thus, in a way this liberalization of economy will make the poor still poorer.
Thus summing, we can say that, economic liberalization is a slow and cumbersome process. In this process each one of us has to join hands with the state, and learn to waster less and produce more. The state and the individual must move hand in hand do that the nation grows as one single unit. We should not get scared of any of these teething troubles of economic liberalization and continue to go ahead with the process till we get out of the woods and become an economic power like China and others.