I am returning from a discussion from a think tank based in Lutyens Delhi, and thought to write this piece quickly before my memory fades away. I started my journey in law with a specialisation called competition law – which regulates companies to create a level playing field for the market economy, and allows consumer freer market choices, and businesses freer trade. In my law school days and up until now, I think this ideal scenario, upon fairer and fuller implementation of ideals of competition law can make our society and economy a better place to live in. It is not about shallow parameters of ease of doing business, or ease of living etc. but an ideal way to conduct business, without engaging in unfair trade practice, without creating monopolies, without misappropriating profits, etc. – so ideal right. But, reality starts where idealism ends. Lately, I have started thinking about alternate models of economic structures that India can opt in.<\/p>\n
A fair competition law promotes and propagates a level playing field but it does not promote, at any level, that state should own enterprises\/companies. And that is the reason, I oppose socialism and communism, both evils of the same workshop. To understand why India cannot\u2014and should not\u2014return to a pre-1991 socialist framework, one must look at the scars of the “License Raj,” the reality of global integration, and the evolving aspirations of 1.4 billion people.<\/p>\n
For nearly four decades after independence, India followed a model of democratic socialism characterized by state control over the “commanding heights” of the economy. While the intentions were noble\u2014poverty alleviation and self-reliance\u2014the results were often stifling. India was trapped in what economists mockingly called the “Hindu Rate of Growth,” stagnating at around 3.5% for decades. The “License Raj” meant that an entrepreneur needed government permission for everything: what to produce, how much to produce, and where to sell it. This bred systemic corruption and killed innovation. By 1991, the socialist experiment had brought India to the brink of bankruptcy. With foreign exchange reserves barely enough to pay for two weeks of imports, the nation was forced to airlift its gold to London as collateral. Returning to this state-heavy model would mean re-introducing the very inefficiencies that once crippled the Indian tiger.<\/p>\n
A common argument for returning to socialism is the need for social justice. However, there is a vital distinction between a Socialist State and a Welfare State. Modern India has transitioned into a “Welfare State” powered by “Capitalist Growth.” The massive social schemes of the last decade\u2014PM Kisan, Ayushman Bharat, and the Jan Dhan-Aadhaar-Mobile (JAM) trinity\u2014are funded by the tax revenues generated by a thriving private sector. The policies of the government of the day are clearly neither socialist nor communist.
\nIn a globalized world, capital is cowardly; it goes where it is welcomed and stays where it is protected. A return to socialist policies like high wealth taxes or nationalization would trigger an immediate exodus of investors. India is now a global hub for SaaS (Software as a Service) and Fintech. These industries thrive on risk, venture capital, and intellectual property\u2014concepts that are often at odds with traditional socialist central planning.<\/p>\n
The government must continue to exit businesses where it has no “business” being, such as manufacturing or hospitality. Instead of owning the means of production, the state should be a world-class regulator, ensuring fair play and preventing monopolies.By building physical and digital infrastructure, the state enables the private sector to reach the “last mile.”
\nThe call to “never go back” is not an endorsement of inequality; it is a recognition of reality. The socialism of the 20th century was a response to colonial exploitation, but it became a cage for Indian potential.<\/p>\n
Today, India’s strength lies in its aspirational class\u2014the street vendor using a QR code, the small-town girl coding for a Silicon Valley firm, and the farmer accessing global crop prices on a smartphone. These individuals do not want a state that dictates their limits; they want a state that empowers their possibilities. Returning to socialism would mean closing the doors we only just managed to pry open.
\nThe ghost of 1991 should serve as a reminder: we tried that path, and it led to a dead end. The future of India is not in the hands of the planners in Delhi, but in the dreams of millions of decentralized actors in a free, regulated market.<\/p>\n
(The author is President, Arth Vidhi and Advocate, Delhi High Court)<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" I am returning from a discussion from a think tank based in Lutyens Delhi, and thought to write this piece quickly before my memory fades away. I started my journey in law with a specialisation called competition law – which regulates companies to create a level playing field for the market economy, and allows consumer […]<\/p>\n","protected":false},"author":106,"featured_media":290415,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[131,153,3],"tags":[],"class_list":["post-290414","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-131","category-153","category-3"],"yoast_head":"\n