The ForEx Crisis of 1966

Guess what I learned in history today? India began the process of liberalization in 1991, but it could as well have happened in 1966. Many of the circumstances that led to loosening the controls on private industry and domestic markets existed in 1966 too. India was experiencing a ForEx crisis, with insufficient funds (post foreign aid commitment) to import food grains to meet even half the nation's demand for the year. So the currency was devalued. But socialism was still high on the Government's agenda. And increased import barriers, export subsidies, and taxes marked the aftermath. In a world where 60+% tax slabs existed in Europe, and socialism was quite popular, India was only following suit.

Thanks to Indira Gandhi's leftist inclinations and the Nehru legacy she had to support, a generation lost the chance to see a India take up the classical definition of development. The US-backed WB/IMF just couldn't do in 1966, what they did in 1991. India might have missed the entire semiconductor revolution, but luckily for the private sector the timing matched the IT/telecom revolution.

More than properity, it's about trust. It's about the Government giving people the space to think, and the opportunity to decide what's best for themselves. Collective wisdom, should always perform better than a few self-proclaimed experts deciding a country's future.