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Making Reforms Work for the Common People
The reforms of 1991 and 1996 were branded pro-rich as people with better initial endowments benefited disproportionately from the significant positive impacts, thus exacerbating both income and regional inequalities. This must change. Therefore, rather than minimising the role of the state as per the Washington Consensus, the presence of a development state is a necessary condition for implementing structural reforms in India.
The author gratefully acknowledges the assistance of Ajay Kumar.
That the 1991 reforms marked a major watershed in India’s economic history is surely beyond argument. No waiting lists for cars or scooters, no special licences for securing foreign exchange for studying abroad, no gold smuggling and no more the dread of the customs officer at airports with long queues that took hours to be cleared as each case was opened and rummaged to look for the “banned item.”
It would have been simply inconceivable prior to 1991 that 10 million Indians would voluntarily give up the subsidy on cooking gas. The Indian reality has changed and life has become less Kafkaesque. And thankfully, scarcities are no longer the driver of human endeavour in present-day India as it was prior to 1991. One must acknowledge the paradigm shift that was initiated in 1991 and which 25 short years later has resulted in a post-reform generation that is perhaps totally oblivious to the days when one had to wait for three to five years to buy a Vespa or 10 years to get hold of a Padmini.
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