The Political Necessity of the Licence-Permit Raj https://www.theindiaforum.in/history/political-necessity-licence-permit-raj Rashmi Venkatesan May 09, 2023
While the logic of market reforms is repeated often to justify the disbandment of licencing in the wake of the 1991 reforms, much of the commentary overlooks the rationale and history of licencing.
Industries (Development and Regulation) Act, 1951 (IDRA) was enacted by the post-colonial state to put India on the path to industrial modernity and ‘catch up’ with the West. For the first time the government identified ‘key industries’ for national development, and brought them under central control.
industrial regulation and control was not intended as an attack on private industries or an attempt to keep their growth in check. Quite to the contrary, the purpose of industrial control was justified as industrial growth and development. Its stated objective was to ensure that such development occurred in accordance with Plan priorities, prevent the concentration of wealth, protect small-scale industries from unfair competition, promote new industries, ensure regional distribution of industries, and advance technological and economic improvements (Hazari 1986:340).
Licencing was, above all, a political project that was instrumental in establishing the sovereignty and jurisdiction of the post-colonial state over the economy.