ONE of the most consequential changes brought about by the Rajiv Gandhi government has been in the realm of economic policy. The raising of MRTP limit; the reduction of income and corporation tax-rates; the scaling down of the rates of indirect taxation on a variety of luxury goods; the liberalisation of imports of a wide range of commodities, especially capital goods; the relaxation of industrial licensing; the attenuation of the role of the public sector; the greater access to the Indian market allowed to foreign capital; and the easing of restrictions on the inflow of foreign technology: all these moves together <(dd up to a new turn in India's economic policy in the direction of "liberalisation" as advocated by agencies like the World Bank and the IMF. To be sure, a tendency towards "liberalising" the economic regime had manifested itself even earlier; but starring from around the time of the current year's budget, the shift towards a "liberal" economic regime has been pronounced and decisive, a fact which has been ^explicitly noted and applauded by no less a person than Ronald Reagan on more than one occasion.
The crux of the new policy is to eschew even the limited attempts at "distributive justice" and "self-reliance" which characterised the earlier economic regime, and to allow freer play to private capital, including metropolitan capital, in the name of achieving a higher growth-rate, which supposedly would have a "trickle down" effect upon the poor. Not surprisingly, this Indian version of "supply-side" economics ha^ evoked sharp opposition from large sections of the intellegentsia belonging to different shades of the ideological spectrum. It has been argued that this policy would give rise to larger unemployment, create severe balance of payments problems which would eventually land the country in a debt-trap, worsen economic inequalities, destroy the limited domestic technology base, and strengthen the grip of metropolitan capital on the Indian economy with all the attendant economic and political consequences; and what is more, it would not even lead to any sustained high growth as has been claimed on its behalf. .The solution to the contradictions of the earlier economic regime, which no doubt are serious, lies in a direction altogether different from that of the so-called "liberalisation".
At a time when the bourgeois press and the government-controlled media have been loudly hailing the new turn in economic policy, it is impor-