Victory for Capitalism in World’s Largest Democracy

by Iain Murray on May 18, 2009

in Deregulate to Stimulate, Economy, International, Zeitgeist

India’s Congress Party was responsible for many mistakes when it turned India into a corrupt socialist state in the 1960s and 70s, but it changed course after a series of electoral defeats, and pro-market reforms were possible in the 1980s and 1990s.. Under Prime Minister Manmohan Singh it has been a champion of free-enterprise capitalism that has turned India into a successful modern state. Despite the global recession, Indians have strongly endorsed Mr Singh’s policies and returned Congress to power. The Communist “Third Force” block, which had boasted that it was going to be the kingmaker in the new Parliament, has suffered major setbacks, including huge losses in its stronghold of West Bengal. Freed from the threat of hindrance by the Marxist-Leninist block, as Swaminthan Anklesaria Aiyar says at Cato@Liberty, the Congress government will be able to press ahead with a number of much-needed liberalizations:

…pension reform, allowing private investment in coal mining, and raising foreign investment limits in insurance, telecom and retail. Victory and stability should also make it politically possible to avoid brazenly protectionist measures advocated by some sections of industry. The new agenda should include education reform—school vouchers to promote choice, liberalized rules for private schools, permission for foreign universities to set up shop in India. India badly needs administrative reforms to make civil servants and the police more accountable to citizens.

All true. If Congress follows through and does not allow itself to get sucked into dynastic politics (the latest scion of the Gandhi-Nehru dynasty has become a major player), then the foundation will have been laid for this century to be the Indian Century, and what was once Anglo-American capitalism may have to be referred to as Anglo-American-Indian capitalism.

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