‘Liberalisation of Indian Economy has not been accompanied with adequate reforms’. Comment.

The statement reflects the distinction between first-generation reforms and second-generation reforms. First-generation reforms were subtractive: after 1991 the state removed licences, tariffs and controls on foreign exchange and investment, mostly by executive notification. Second-generation reforms are constructive: they require building markets for land and labour and creating regulators, courts and administrative capacity. The statement is…