Relevance : GS Paper III
Introduction
The economic slowdown has led to demand of more structural reforms from the government.
What does a structural reform mean?
They mean reforms that free the economy from the control of the government and allow markets to allocate resources.
The present circumstances in India
In the last five years, the role of the government in the economy has only increased significantly with measures such as demonetisation and GST.
A minimalist government
- A minimalist or limited government would allow private individuals to own and exploit all economic resources.
- It would allow individuals to freely buy and sell anything they wish at whatever price they deem fit through voluntary trade.
- Such genuine free market competition would ensure that the standard of living of the masses increases many-fold as a result.
- It was through such a drastic cut-down in the role of the government in the economy that countries such as Hong Kong, Singapore, New Zealand and China managed to achieve great economic prosperity.
Ease of Doing Business ranking
- India has improves its performance in the World Bank’s ‘Ease of Doing Business’ ranking.
- But India’s performance in the ‘Index of Economic Freedom’ ranking (129 out of 180 countries), should be of concern.
Conclusion
If genuine structural reforms are to be expected, economic freedom should become the guiding principle of policymaking.
