The New Economic Policy : An Overview
WITH THE announcement, in quick succession, of the Railway Budget, the Finance Bill, the Import and Export Policy, the Electronics and the Textiles Policy and a host of procedural changes at the departmental level, the contours of an economic policy of the Union Government have emerged which are radically different from what we have had in this country so far. The new policy however had been taking shape over the last few years—its character clearly discernible in the successive trade policy statements, alteration in the licensing procedures, change in the Credit Authorisation Scheme, a series of revisions in ths position of RBI regarding deposes and investment by the NRIs and a number of other procedural changes made during the last few years. The terms of reference for the appointment of the M. Narasimhan Committee were a clear indication of these changes and the Central Advisory Council on Trade had also made a plea for these changes in January 1984. Thus, the recent changes should not be looked upon as a dramatic turn around in economic policy steered by a new ruling group in its wisdom or follv or naivete, but seem to be the outcome of a process with a longer history.
For the same reason it appears that assessing the new policy in its economic terms, say as a reliance on a path of consumption-led growth must come later and in the context of an appreciation of tills protracted process that lias led to it. I have tried to analyse tills process elsewhere,' and here I may just mention its bare outline only to bear upon the subsequent discussion. The causal element in tills process lias been the absence of overwhelming superiority of either industrial capital or the landed interests over our society, at the time of independence. Just as this had led the Indian National Congress during the days of the nationalist movement to keep tliese forces skilfully balanced, in the same fashion, the national government after independence liad to continue this balancing and arbitration in relation to important economic issues.
.The first distributive rule of the resulting system of coalition of the proprietor classes mediated bv politicians and the government machinerv is that resource mobilisation from tlie groups in tills coalition must be kept within
Crime (or E(onomic Studies & Phimiing, J.iw«iharlal Nehru University, New Delhi