From: kudu@enel.ucalgary.ca (Dr. GeeKay)
Newsgroups: soc.culture.indian
Subject: Re: Should Indian states need more autonomy?
Date: 5 Sep 92 21:10:34 GMT
Organization: The University of Calgary

In article <Bu2vxx.239@cs.psu.edu> narayana@psuvax1.cs.psu.edu 
   (Kuram T Narayana) writes:
>In article <92Sep04.203911.11585@acs.ucalgary.ca> kudu@enel.ucalgary.ca 
    (Dr. GeeKay) writes:
>>But they are not allowed to let private industries start, operate, 
>>restructure, raise equity inside and outside India, and allow foreign 
>>participation without central intervention at every stage 
>>
>The  industrial policy resolution and the national planning commision
>were an act of parliament. There are varied opinions even from private
>industrialists on whether the control-permit raj was useful or not. 
>Dr. Bharatat Ram, who was one of the Sriram brothers of DCM Industries,
>[...] unfailingly supported most of the control regimes of the state 
>but he only condemned on the production capacity licencing and
>on licencing product mix of monopoly industries. He was ofcourse
>critical of the MRTP for the then existing cap. 

In the control-permit raj, industrialists who had contacts with the
govt., stood to gain as much as the beuaracracy by not allowing 
competition from both inside and outside. It is no surprise then that
you would find some (successful?) industrialists praising the 
old control-permit raj.

>Note that he argued
>at that time that the public sector sector is necessary for industrial
>growth, that the private sector is incapable of (at that time) raising
>the resources necessary for investment in core sectors and more
>importantly in infrastructure development. Even JRD Tata in one of his
>lectures at the IISc did echo the same sentiment; 

Prevailing theory of economic development at the time of independence
did have a large component of government participation (as it is hotly
debated even now). However, it was never a good idea to have government
monopolies; if there were enough freedom for each of the states to run
their economies, stated would have *evolved* efficient industrial
structures. The rigid arm of central intervention saw to it that
such *evolution* would not take place.

>The Nehruvian model was generally the national consensus at that time,
>and resource and infrastructure developement was a national and public
>sector priority. 

Infrastructure development is as much an industry as any other. Some
misguided followers of the Nehruvian model, thought (and continue to
think) that having private/foreign ownership of infrastructure (roads,
railways, telecommunication, etc..) is equivalent to *selling* the
country to foreign hands. My point is that even if we started with
the Nehruvian model, if enough freedom were given to the states in
interpretation and execution of the model, more efficient 
industrial development would have *evolved*. 

>That states could attract foreign investment over and above the
>shoulders of the center is a myth; this has been convincingly exposed
>by NT Rama Rao's Vibhuthi and Locket trip to USA. Every chief minister
>had similar experiences. 

You would be surprised to know that even apparent idiots like 
NTR and Bangarappa (the present chief minister of Karnataka), could 
make recognizable difference in these matters. (Case in point: the
recent trip by Bangarappa to US bagged three or four offers of 
investement in power generation and distribution). Had the state 
governments been doing this kind of thing for long, their ability
to attract investment would have been a criterion for their election
before long.

>The whole notion that states can independently
>develop (become some sort Singapore) if only the center wasn't there
>is simply questionable. 

With twenty-odd number of states; even if a few states were successful, 
they would have been a role model to emulate, or bench mark to
compare with for the electorate. The key idea is allowing the states
to find their own optimal policies. And the way to do that is by 
granting them autonomy in every which possible matter.

>...kt




-- 
Dr. GeeKay (kudu@enel.UCalgary.CA)