Nehru had a dream, a socialist dream! Inspired by Soviet Union, Nehru showed the socialist path to India. He invested then limited funds in government founded enterprises - few among them are known to be the Nav-Ratnas (the 9 diamonds) of Indian industrial revolution. With that he also went on to put heavy restrictions on private investments in many of the sectors during this period, which is infamously known as the License Raj. During License Raj, private players could manufacture goods only with official license and quantity of goods manufactured was also decided by the government. Industrialist like Birla had to opt for other countries like Indonesia / Europe to setup their business instead of just knocking onto politicians and bureaucrats door for as long as ten years to setup an industry.
By and large, the decade after independence was very crucial, as that decided the path India would take and as always changing an established system is always difficult - if not impossible. If License Raj was not enough, Nehru also promoted worker unions, who had their own set of rules. India being democratic country unions got employee friendly and went against the employers - going on strike being their ultimate weapon to turn on any argument in their favor. This made already inefficient and corrupt government establishments more inefficient and Nehru's dream more distant satellite.
In July 1991, it was P.V. Narsimha Rao's government who ended this License Raj and allowed 51% foreign direct investment in India. It was Narsimha Rao who with help of his team - including Manmohan Singh and P. Chidambaram - liberated India from the clutches of License Raj. There were some compulsions to do this as well (India was economically in very bad shape then and India had to pledge huge amount of gold in foreign market), but Narsimha Rao dared and did majors economic reforms in just 2 days (which actually continued until 2 years). Though this credit goes to Rajiv Gandhi, with Rao himself declaring that it was Rajiv Gandhi's undone work that he is completing, it was part of 1991 Congress election manifesto that was written under Narsimha Rao's leadership.
So to speak, greater portion of this credit should go to P.V. Narsimha Rao, whose bold decision gave India the much needed economical reforms. This more so because former Prime Minister Indira Gandhi was much against this liberalization for government might lose control. But today after 21 years of end of License Raj, P.V. Narsimha Rao's work in still undone and economic reforms are still a way to go. This clearly puts Narsimha Rao in spot light in the history of Indian economy and makes him a true Bharat Ratna, though this award hasn't come his way as yet. His contribution is forgotten and there are hardly any government schemes by his name - more so the newly inaugurated airport in Hyderadad, Rao's home state, was named after Rajiv Gandhi.
References:
India Unbound by Gurcharan Das
By and large, the decade after independence was very crucial, as that decided the path India would take and as always changing an established system is always difficult - if not impossible. If License Raj was not enough, Nehru also promoted worker unions, who had their own set of rules. India being democratic country unions got employee friendly and went against the employers - going on strike being their ultimate weapon to turn on any argument in their favor. This made already inefficient and corrupt government establishments more inefficient and Nehru's dream more distant satellite.
So to speak, greater portion of this credit should go to P.V. Narsimha Rao, whose bold decision gave India the much needed economical reforms. This more so because former Prime Minister Indira Gandhi was much against this liberalization for government might lose control. But today after 21 years of end of License Raj, P.V. Narsimha Rao's work in still undone and economic reforms are still a way to go. This clearly puts Narsimha Rao in spot light in the history of Indian economy and makes him a true Bharat Ratna, though this award hasn't come his way as yet. His contribution is forgotten and there are hardly any government schemes by his name - more so the newly inaugurated airport in Hyderadad, Rao's home state, was named after Rajiv Gandhi.
References:
India Unbound by Gurcharan Das
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