English Essay on “Liberalization of the Economy” Complete Essay, Paragraph, Speech for Class 10, Class 12 and Graduation and other classes.

Liberalization of the Economy

The term ‘liberalization’ is the buzzword that has been engaging political ideas and debates in India since the early 1990s. Though it has become very common usage, its connotations are, extremely complex, to the extent that they are often confusing and mutually contradictory. Put differently, liberalization means different things to different people. If some consider it a blessing or a welcome development, others think of it as a self-inflicted curse. Nevertheless, it may be safely said that no other policy has revolutionized political thinking and priorities in so short a time as liberalization has. It may sound ironic that it has been able to do so, even though its real form has not yet evolved in practice.

Liberalization became relevant as a matter of compulsion. It was originally seen as a remedy for the crises that followed a phase of high spending and profligacy. The crises had their roots also in such factors as the decline and collapse of the Soviet Union, and the changing political alignments and loyalties worldwide, which followed as a result. The former Soviet Union, as one of India’s major trading partners, had a unique relationship with India. Since much of the trade with that country was in the form of organized barter, currency payments were irrelevant. The oil and military hardware the Soviets gave us, were reciprocated by shiploads of cosmetics and costumes. In whatever little trade, payment of money was involved the currency was often the rupee. There was thus hardly any depletion of precious foreign exchange in India’s trade with the Soviet Union. Since the items of trade and their volumes were fixed bilaterally by the concerned governments, there was no need for aggressive or innovative marketing exercises. India’s external trade of those times, by and large resembled a leisurely cruise in calm waters. Though there were sufficient warnings of stormy weather ahead, they were conveniently ignored by both the government and the general polity alike. The warnings could not even restrain the government from being particularly profligate during that time. Finally, when the warning was too strop ‘ to be ignored, Indian economy was on the verge of collapse, with a distressingly wide trade deficit and a fast depleting foreign exchange reserve.

The crumbling economy gave enough evidence of government incompetence and mistakes, and forced the government to think in terms of liberalization. The government’s belief in the potential of the private sector to share the responsibility of economic development, and its invitation to the private sector to do so, were, in a way, the harbingers of the latest economic liberalization process in India. Though, besides liberalization, the government carried out prescribed practices like devaluation of the currency and borrowing from the International Monetary Fund, to replenish foreign exchange reserves, it is doubtful, after all these years, whether liberalization has succeeding in solving the economic problems of the country.

Doubts about success arise, because India, with its highly complex and rather unique problems, cannot find salvation in mere change or adoption of policies. Policies, as such, contain only ideas and directions. The fate of policies is decided by how their ideas and directions are interpreted and implemented. The need for the present policy of liberalization arose only after the prospect of economic ruin loomed large before the government. But was such a prospect new to the country and to its entire population? Ruin and despair had been familiar prospects for a substantial section of the population for a long time, well before liberalization was thought necessary. Those living below the poverty line would not particularly worry about a depletion in foreign exchange reserves or a balance of payments crisis, if they were to know about it. They are, as such, beset with numerous problems, so that they will not worry more about a couple of new ones. Hence, as long as a substantial section of the population in India is insensitive to these new problems, policies like liberalization cannot be of much significance. Liberalization, thus, can at best claim to be a solution to the problems of people with means; to the problems which those people created themselves. It cannot claim universal relevance that its initiators wish it to.

Liberalization, in the Indian context, has not yet realized progress and development. It has mainly meant the relaxing of various rigid and vague rules that suffocate enterprise and initiative. It is therefore difficult to assess how successful a policy. Liberalization is however, despite doubts about its success, liberalization, since it will mean the participation of a wider cross-section of the people in the development process, and the encouragement of initiative and enterprise, holds out high promise. Some signs, like rise in exports and establishment of industries, if sustained, auger well for wealth creation and all-round prosperity. If greed and insensitivity to public causes can be kept in check, there is no reason why the prosperity which might follow liberalization should not spread to all sections of society. Hopefully, the increased employment opportunities for both skilled and unskilled manpower, which may follow as a result of economic liberalization, shall serve as an effective media for spreading such prosperity.

The litmus test for the success of any social policy is to ascertain whether the results of the policy have favorably affected ‘all’ sections of the society, instead of only the privileged ones. Liberalization deserves to be encouraged if it means that private enterprise generates or creates wealth without jeopardizing ethics and morality, and proffers that wealth for distribution among ‘all’ the constituents of society, for the sake of their all-round welfare.