Governence Issues Holding the Indian Economy Back

Ask any common man in India about the problems India faces and you are likely to get the same answers. Those same answers are what you will get if you ask the question to people who do business in India be they Indians or Foreigners who are here to tap in to India's immense potential. The broad governance issues that India faces can be categorized in these categories:

  • Unhealthy Policies: For decades, after India got its freedom from the British in 1947, India adopted a protectionist stance towards its own businesses. It made it extremely difficult for foreign bussinesses to set up shop in India. India also hobnobbed with the Soviets which directly influenced many of India's policies. Though India had adopted a western style democracy it's early leaders were fascinated with Soviet style socialism. This fascination eventually caused India to be on the sore side of western leaders and the losing side of the cold war. It was only in 1991 that economic reforms were brought in and India opened up its markets. The change was immediate! Within a decade the landscape in India transformed completely forcing the world to sit up and take notice.
  • Corruption: Asking anybody in India about its problems will fetch you the answer that India's number one problem is corruption. It is a widely held belief that one can't be born or even die in India without giving a bribe (for the birth or the death certificates) to some government official. One after another sleazy Scams are reported by the media (a very free and vocal Indian media) and causes a public outcry. The office of Prime Minister of India (the highest position in the land just like in Great Britain) itself has been accused of graft many a times since the 1980's. The latest scam which caused a furor in the country involved a Union Telecom Minister of the country allocating contracts for Mobile Telephony Spectrum at nominal rates to several parties which these companies then sold of for as much as 10 times the price at which they had bought the spectrum. The CAG (Comptroller and Auditor General of India) has estimated that this caused a loss of more than a 100 billion dollars to the Exchequer or in other words the taxpayer in India.

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