Licence Raj

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Licence Raj

A term used to describe the regulation of the private sector in India between 1947 and the early 1990s. In India at that time, one needed the approval of numerous agencies in order to set up a business legally. Manufacturing in particular was heavily regulated. The Licence Raj was the result of a mixed economy that used a government planning commission established after India's independence. The Licence Raj was largely successful in the 1950s and after, but eventually led to low rates of growth and investment. India began to liberalize its economy in the 1980s, ending the Licence Raj.
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He was a visionary leader who oversaw major economic transformations of the Indian economy and dismantling of the License Raj. His contributions to the nation shall always be etched in our memory," the Congress tweeted six hours after Modi's tweet.
Even though the days of the license raj are supposedly behind us, the powers in Islamabad behave in the same old-fashioned way.
After all, he ran on a platform of "minimum government, maximum governance," promising to dismantle the relics of the License Raj that had turned India into the economic basket case of the world.
For close to a century leading up to its independence in 1947, India operated under a system of British governance known as the Raj, taken from a Sanskrit word meaning "kingdom" or "rule." Then, more or less until the introduction of economic liberalisation in 1991, the country stagnated under a planned economy whose overwhelming regulatory demands were described as the License Raj.
India used to have License Raj, where bureaucratic obstacles were immense and that has not gone away completely but enormously reduced.
This is for good reason, given that India's private sector still bears the stigma of having been midwifed under the pre-1990s "License Raj" - an era remembered for its red tape and corruption.
Now, why this sudden shift from digital India, Start-up India to the age-old paper-based Offline India, from ease-of-doing business to the License Raj? By the way, if someone is found to be using or depicting a wrong map of the country, the person may land in jail for seven years and that too after parting with a whopping one billion bucks as maximum fine!
Banks were nationalised, incentives were blunted, free enterprise was throttled, license raj prevailed and growth stagnated.
Worse, India's business community, trapped in insularity and the lazy convenience of a License Raj, lost touch with best practices in world manufacturing and market expansion, sabotaging India's ability to lift the people from the curse of poverty.
If the external environment is predictable and relatively resistant to change (as it was during the License Raj in India), traditional means of work, which emphasize division of labour and efficiencies arising out of economies of scale, should be the way to go.
Empowered by Singh's reform of the interventionist "license raj" that had long stifled business, a half-dozen chief ministers have built especially impressive track records since the mid-'90s.