onomi       e orms          6.7
     the target population, it takes time, but the efforts breakdown of feudalism and the growth of a
     a government initiates to increase the supply,        market or capitalist society14 in its place, which
     i.e., increasing production becomes visible soon.     became popular in economics via the writings of
     As production is done by the producers (i.e.,         Adam Smith (its founding father in the USA) and
     the capitalists), prima facie the structural reform   got identified as a principle of laissez-faire.15
     measures look ‘pro-rich’ and ‘pro-industrialist’             The term liberalisation has the same
     or ‘pro-capitalist’, known with different names.      connotation in economics as its root word
     Ignorant people easily get swayed by the logic that   liberalism. Pro-market or pro-capitalistic
     everything which is ‘pro-rich’ has to be necessarily  inclination in the economic policies of an
     ‘anti-poor’. But it was not the case with the         economy is the process of liberalisation. We see
     process of economic reforms. Unless the economy       it taking place in the whole Euro-America in the
     is able to achieve higher growth (i.e., income)       1970s and particularly in the 1980s.16 The most
     wherefrom the purchasing power of the masses          suitable example of this process could be China of
     will be enhanced? And increased income takes          the mid-1980s when it announced its ‘open door
     time to reach everybody. If the economy lacks         policy’. Though China lacks (even today) some
     political stability, this process takes even more     trademark traits of liberalism, as for example,
     time due to short-term goals set by the unstable      individualism, liberty, democratic system, etc.,
     and frequently changing governments—the exact         still China was called a liberalising economy.
     case is with India.                                         We may take an example from the history
                                                           of the world economy—putting the USA of the
     the lPg                                               early 20th century and the communist China on
     The process of reforms in India has to be completed   the two poles of the scale—thus representing the
     via three other processes namely, liberalisation,     best historical example of the liberal economy
     privatisation and globalisation, known popularly      and China being the best example of the ‘illiberal’
     by their short-form, the LPG. These three processes   economy. With the USA on the south pole and
     specify the characteristics of the reform process     China on the north any policy movement towards
     India initiated. Precisely seen, liberalisation shows ‘the south’ is ‘liberalisation’. The movement
     the direction of reform, privatisation shows          from the south to the north will be known as
     the path of reform and globalisation shows the        ‘illiberalisation’.
     ultimate goal of the reform. However, it would              It means that the process of decreasing traits of
     be useful to see the real meanings of these terms     a state economy and increasing traits of a market
     and the exact sense in which they are being used      economy is liberalisation. Similarly, the opposite
     worldwide and particularly in India.                  will be the process of illiberalisation. Technically
                                                           speaking, both the processes will be known as the
        LIbEraLIsatIon                                     processes of economic reforms, since ‘reform’ as a
                                                           term does not say anything about the ‘direction’.
     The term liberalisation has its origin in the         All the economic reforms in the world have been
     political ideology ‘liberalism’, which took its
     form by early nineteenth century (it developed           14.   Andrew Heywood, Politics, (New York: Palgrave,
                                                                    2002), p. 43.
     basically in the previous three centuries). The
                                                              15.   Robert Nisbet, Prejudices: A Philosophical Dictionary,
     term is sometimes portrayed as a meta-ideology                 (Massachusetts: Harvard University Press, 1982), p. 211.
     capable of embracing a broad range of rival values       16.    ‘Economics: Making Sense of the Modern Economy’
     and beliefs. The ideology was the product of the               The Economist, London, 1999, pp. 225–26.