Liberalization is said to be break with the past in the sense that in earlier days of her Independence, India relied protectionist measures of state are phased out. Moreover, it is said to be a panacea for, ‘Licence quota permit Raj’ of the post independent period.

India’s commitment to the liberalization strategy is outlined in the New Industrial Policy 1991 whose patron was then Finance Minister Mr. Manmohan Singh. Its chief features are as follows:

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i. Deregulation

ii. Disinvestment

iii. Privatization

India’s Liberalization Strategy:

In the context of India, the process of liberalization has adopted two pronged strategy.

1. Short term stabilization programme meant to ensure favourable conditions for trade and finance.

2. Structural Adjustment Programme to fine tune the institutions in the direction of a market friendly economy.

Significance for Bureaucracy:

Liberalization necessitates rolling back of the state on the economic front. Many of its hitherto performed economic activities are to be allocated to the market. Its role is redefined to be a regulator or a facilitator. It still concentrates on development dynamics but only as a catalyst.

The Bureaucracy that was created to serve the colonial empire needs to be responsive to the dynamics of changing role for the state. It will have shed its complacency and fine tune its orientation. It will have to adjust with the growing privatization and growing people’s participation.

The call for less government has promoted de-bureaucratization. There is likely to be decreasing patrimonial influence that the bureaucracy wields. It is thought to be collaborative with extra administrative environment and civil society bodies.


Following points are crucial in India’s Liberalization strategy.

Firstly, India has tried to be selective in its approach towards liberalization. It has shown interests in retaining and promoting the profit making public sector units.

The Navratna are case in this point. Similarly future may project new situations where the ones of making choice would largely depend on bureaucrats. But, other people viz; intellectual and civil society groups, politicians, businessmen would also have major say.

Secondly, the liberalization has brought the sphere of government to perform the primary task of strengthening the existing infrastructure and human resources in areas like, education, health and sanitation etc.

Thirdly, there is to be debureaucratization of decision making agencies. Grassroots institutions of Panchayats and Nagarpalika are to have greater share in decision making and policy formulation sphere. Nevertheless, Bureaucrats will remain a facilitator and implementing agent.

Rightly remarked by former U.S. President Bill Clinton “Globalization has become a necessity and there is no escape from it”. The strategy of liberalization pursued in lieu of integration of Indian economy with the world has its own limitations.

But, the state and the governing elites need to remain conscious in taking its ups and downs. It must be acknowledged that the market is not a panacea of all evils. If public sector can fail, so can the markets.

There should be an attempt to rejuvenate the public sector profit making companies to enable them to compete with MNC’s. Moreover, the traditional small scale industries are taken care of. This will strengthen both the economy and the society.

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