The consequences of imposition of Nehruvian neta-babu socialism on newly independent India 78 years ago, regardless of the subcontinent’s several millennia of private enterprise culture and traditions, are becoming increasingly evident. For half a century economic growth barely averaged 3.5  percent per year (against the global average of 5 percent) while annual population growth averaged 2.5 percent.

Against this dismal development record, neighbouring China which was economically more backward than India in 1949 but which took the capitalist road in 1978, has attained a GDP of $18 trillion cf. India’s $4 trillion.

Under the inorganic socialism model formally adopted in 1956 and reiterated in 1976 when ‘socialist’ was inserted into the preamble of the Constitution, it was holy writ that the State and public sector enterprises (PSEs) dominate the “commanding heights of the economy”. Consequently, the task of micro-managing the entire economy and society devolved upon the 15-20 million neta-babu (politician-bureaucrat) brotherhood of the Central and state governments. Seventy-eight years on, it’s clear this task which included suppression of private industry and business, has proved too much for the brotherhood. Spread too thin and too wide, the brotherhood has failed on every front. 

Perhaps not foreseen by Nehru and his heirs who persisted with the rigorous  neta-babu licence-permit-quota regimen until a non-Nehru (Prime Minister Narasimha Rao) substantially liberalised and deregulated the Indian economy in 1991, half a century of neta-babu raj over industry, and micro-management of the social sector through discretionary laws and regulations has infected the body politic with pervasive corruption.  Consequently, the brotherhood has morphed into a powerful vested interest within Indian society.

Although after liberalisation of the Indian economy in 1991, the annual rate of economic growth (GDP) has doubled because of private sector growth momentum, the brotherhood is unwilling to let go. Privatisation of PSEs is slow and private industry and business continue to be governed by 1,536 Central and state government laws, 69,223 compliances and 6,618 filings which has prevented double digit annual economic growth necessary to recover ground lost in the socialist years. The brotherhood is fighting a determined rearguard action against liberalisation because control and command guarantees perennial streams of speed money and permissions income.

The only available solution is sustained pressure of public opinion to reignite the faltering momentum of liberalisation of the Indian economy to transform 21st century India into a free enterprise, free markets nation. The accelerating failure of national infrastructure and social sectors is the outcome of stalling momentum of liberalisation and deregulation.