The Changing Political Economy of India.
As India's political economy evolves from mixed economy into a system of free enterprise, initial strides have tapered as the world's largest democracy struggles to shed policies of the "License Raj" and staggering illiteracy and poverty rates.
There are several key items that BJP leaders must embrace in order for India to rekindle the growth seen in the 1990s. These key items are: repealing legislation restrictive to free enterprise, increase literacy rates, further privatization of industries, and commitment to work through party lines and fight corruption in order to concentrate on the long-term welfare of India.
Protectionism policy is an artificial restriction on foreign business in an effort to protect the local economy. However, these policies are outdated in a world of global economy and trade. These policies are ineffective, as they place a restraint on the size of the market and needlessly increase costs. In the end, these policies put India at a disadvantage when attempting to lure foreign capital.
India must work to lower the poverty level hundreds of millions are currently experiencing. This push must include an effort to boost literacy, while and establishing a system of universal elementary education, as poverty and illiteracy correlate to one another.
In order to increase competition, development and productivity, India will need to further privatize heavy industries such as automotive, chemical and steel, as well as public utilities. This would include lowering tariffs on imports and encourage expansion into India by promoting its expertise in science and technology and lower labor costs. India must offer incentives to foreign companies to encourage updating of health services, sanitation, electrical and telecommunication infrastructures.
Political leaders will need to commit to a long-term, strategic goal of making India a world power.