9.12          ndian      onom
     criticised by the victims and the experts alike. In             of politicians, bureaucrats, multinationals as well
     the early 1970s, the Government of India came                   as the domestic industrial and business houses
     with a new idea of it. The major banks of the                   whose interests were sheltered and by the control
     country were now fully nationalised (14 in number               regime.36 Thus, a memorandum to the government
     by that time), which had to mobilise resources for              requesting not to dismantle the control regime by
     the purpose of planned development of India.                    the major industrial houses of India as well as arrival
     The private companies who had borrowed capital                  of the ‘Swadeshi Jagaran Manch’ were not illogical.
     from these banks (when the banks were privately                 But the governments continued with the reform
     owned) now wanted their loans to be paid back.                  programme with politically permissible pace and
     The government came with a novel provision for                  a time came when the same industrial houses
     the companies who were unable to repay their                    requested the government (2002) to expedite the
     loans (most of them were like it)—they could                    process of reform. Now the Indian industry and
     opt to convert their loan amounts into equity                   business class has been able to understand the
     shares and hand them over to the banks. The                     economics of ‘openness’ and a different kind of
     private companies which opted this route (this                  the mixed economy. But the process of reforms
     was a compulsory option) ultimately became a
                                                                     have still to go miles before its real benefits start
     government-owned company as the banks were
                                                                     reaching the masses and development together
     owned by the Government of India—this was
                                                                     with reform could be made a mass movement.
     an indirect route to nationalise private firms.
     Such a compulsion which hampered the growth                          This is why experts have suggested that only
     and development of the Indian industries was                    assuming that reforms will benefit the masses
     withdrawn by the government in 1991.35                          will not be enough to make it happen politically,
          The picture presented by the New Industrial                but the governments, the administrative agencies
     Policy of 1991 was taken by many experts, the                   and the economists all need to link it positively
     opposition in the Parliament and even the public                to mass welfare—it might require to create a
     figures as well as the business and industry of the             popular climate and form the political coalitions
     country as a ‘rolling back’ of the state. The glorious          in favour of the argument that privatisation and
     role given to the state by the Nehruvian economy                accordingly restructured labour laws are basically
     seemed completely toppled down. Any one idea                    aimed at creating jobs, better job prospects,
     the new policy challenged was an emphatic good                  alleviating poverty, enriching education and
     bye to the ‘control regime’ perpetuated till now by
     the government. There was a coalition of interests
       35.   Combined with nationalisation, this indirect route        36.  This nexus of the interests of the vested groups to the
             to nationalisation failed to provide the confidence            control regime of the economy has been beautifully
             among the entrepreneurs that the industrial units they         elaborated by Rakesh Mohan in ‘Industrial Policy
             are intending to set up will be owned by them. This            and Controls’ pp.             . He also points out that
             discouraged entrepreneurship in India while taking             the control system perpetuating the academic and
             risk. The abolition of this compulsion was an indirect         intellectual ideological leanings negated the very need
             indication by the government of no more direct or              for re-examination of the system. The ‘planners’ and
             indirect nationalisation in future. This has served the        the ‘bureaucrats’ were able to preserve their powers via
             purpose, there is no doubt in it.                              the control regime did everything to maintain the status
                                                                            quo, Rakesh Mohan further adds.