FREE MARKET ECONOMY: BOON OR BANE FOR INDIA?

This is the age of free-market economy. What does it mean? To put it simply, it means free movement of capital, labour, goods and services throughout the world.

So far as India is concerned, it means that Indian professionals and skilled workmen will be able to secure jobs in foreign countries carrying higher salaries. It also means that Indian entrepreneurs will be able to sell their goods and services in foreign countries at higher prices, thus increasing their profit margins. In addition, foreigners will be able to open shops and factories in India, thereby creating greater job opportunities for local people. It will also give fillip to tourist, hospitality, banking and real estate industries. We can also encourage foreign countries to open educational, professional and vocational institutes here to meet the skilled labour requirements in India and in their own countries. Indians will be able to buy foreign branded goods in India itself at cheaper rates. Our people will be able to imbibe the habits and work culture of developed countries of the world and thus improve their style of living. The number of opportunities free market economy opens for us is tremendous. But all this is possible only if we are able to provide political stability in our country and are able to create an environment, which is free-market-economy friendly.

It is true that market economy is the fastest way to create wealth. But it is equally true that market economy, by itself, cannot eradicate poverty. In many cases it widens the gap between the rich and the poor. If this gap remains within manageable limits, as in the case of western democracies, it is fine. But if it widens beyond manageable limits, as in the case of many newly independent developing countries, it is bound to degenerate into social unrest, riots, chaos, and anarchy and in some cases even in violent revolution.

Developing countries need stability. Stability is possible only if the same political party remains in power for a number of terms. If there is a wide gap between the rich and the poor, there is a tendency among voters to oust the party in power, no matter whether the newly elected ruling party is competent or not. The newly elected party starts working on its own agenda and the whole process of development suffers a setback.

In the case of a violent revolution, nothing is certain.

India is a vast country with a huge population, exceeding 1 billion. More than 35 per cent of its population is illiterate and unemployed. A major portion of India’s population lives in rural areas, which lack in basic facilities of life such as shelter, clean drinking water, electricity, transport, public toilets, etc. India has a completely fragmented polity, which is divided on the basis of race, religion, caste, class, region and language. It has a judicial system, which is corrupt, inefficient and slow moving. Its administrative system is burdened with self-serving bureaucrats with rules and procedures which are cumbersome can be interpreted differently and are open to corruption. The political system is equally corrupt, inefficient and power hungry. Most legislators do not know how to govern and regard their election to Parliament, State Assemblies and Municipal Corporations as mere opportunities to make more money.

Under these circumstances, will India be able to take advantage of free-market-global economy and transform itself from a Third World country to a First World one?

My mind says “No”, but my heart says, “Yes” – miracles do happen!