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{{short description|Extensive system of licensing and regulation in India from about 1947 to 1990}}
{{Lead rewrite|date=August 2021}}
{{Use Indian English|date=April 2025}}
{{Use dmy dates|date=April 2025}}

The '''Licence Raj''' or '''Permit Raj''' (''rāj'', meaning "rule" in [[Hindi]])<ref>Oxford English Dictionary, 2nd edition, 1989: from [[Sanskrit|Skr.]]  ''rāj'': to reign, rule; cognate with [[Latin|L.]] ''rēx'', ''rēg-is'', [[Old Irish|OIr.]] ''rī'', ''rīg'' king (see RICH).</ref> is a term coined by Indian independence activist and statesman [[C. Rajagopalachari]] for the system of strict government control and regulation of the [[Indian economy]]. This economic system, a form of [[State capitalism]], was in place from the 1950s to the early 1990s. Under this system, businesses in India were required to obtain licences from the government in order to operate, and these licences were often difficult to obtain.<ref>{{Cite book|last=Mathew|first=George Eby|url=https://www.worldcat.org/oclc/867050270|title=India's Innovation Blueprint: How the Largest Democracy is Becoming an innovation Super Power|publisher=Chandos Publishing|year=2010|isbn=978-1-78063-224-7|location=Oxford|pages=13&nbsp;ff|oclc=867050270}}</ref><ref>{{Cite book|url=https://www.worldcat.org/oclc/913733544|title=Economic Reforms in India: Achievements and Challenges|publisher=MJP Publisher|year=2019|isbn=978-81-8094-251-8|editor-last=Nehru|editor-first=S.|location=Chennai|pages=271|oclc=913733544}}</ref><ref>[http://www.swaminomics.org/articles/20011125_streethawking.htm Street Hawking Promise Jobs in Future] {{webarchive |url=https://web.archive.org/web/20080329023451/http://www.swaminomics.org/articles/20011125_streethawking.htm |date=29 March 2008 }}, ''[[The Times of India]]'', 25 November 2001</ref>

The Licence Raj was intended to [[Protectionism|protect]] Indian industry, promote self-reliance and ensure regional equality.<ref>{{Cite journal |last1=Aghion |first1=Philippe |last2=Burgess |first2=Robin |last3=Redding |first3=Stephen |last4=Zilibotti |first4=F. |date=2005 |title=The Unequal Effects of Liberalization: Evidence fromDismantling the License Raj in India |url=https://ideas.repec.org//p/cep/stidep/45.html |journal=STICERD - Development Economics Papers - from 2008 This Series Has Been Superseded by Economic Organisation and Public Policy Discussion Papers |language=en}}</ref> Up to 80 government agencies had to be satisfied before private companies could produce something and, if granted, the government would regulate production.<ref name="bbcindia1998">{{cite news|year=1998|title=India: the economy|publisher=BBC|url=http://news.bbc.co.uk/2/hi/south_asia/55427.stm}}</ref>

The term "Licence Raj" is a play on the "[[British Raj]]" which refers to the period of British rule in India. [[C. Rajagopalachari|Chakravarti Rajagopalachari]]’s criticism of the License Raj stemmed from his opposition to the system of strict government control and regulation of the economy. Rajagopalachari believed that the Licence Raj had the potential for political corruption and economic stagnation, and founded the Swatantra Party to oppose these practices.<ref>{{cite book|title=The Swatantra Party and Indian Conservatism|publisher=[[Cambridge University Press]]|year=2007|isbn=978-0-521-04980-1|page=131}}</ref>

[[Economic liberalisation in India|Reforms started in 1991]] have significantly reduced regulation. However, Indian labour laws continue to protect workers in the formal sector from being laid off by employers and place significant restrictions on the ability of businesses to reduce their workforce without incurring significant costs and burdens. This is viewed by some as a barrier to economic growth and development as it may create a disincentive for businesses to hire workers and can make it difficult for them to respond to changing market conditions or economic challenges.<ref>{{Cite web |last= |first= |url=http://www.ideasforindia.in/topics/macroeconomics/impact-of-labour-regulations-on-indian-manufacturing-sector.html |title= Impact of labour regulations on Indian manufacturing sector |access-date=20 March 2022 |website=www.ideasforindia.in |language=en}}</ref> It is also to be noted that a majority of Indian workers are employed in the informal sector, where many of the labour protections do not apply.<ref>{{Cite web |title=India's Unorganised Sector Is Being Engulfed, Further Marginalised |url=https://thewire.in/economy/indias-unorganised-sector-is-being-engulfed-further-marginalised |access-date=23 April 2023 |website=The Wire}}</ref><ref>{{Cite web |title=Informal economy in South Asia (ILO in India) |url=https://www.ilo.org/newdelhi/areasofwork/informal-economy/lang--en/index.htm |access-date=23 April 2023 |website=www.ilo.org |language=en}}</ref>

==History==
{{See also|Nehruism}}

Following the [[Russian Revolution]], [[Socialism in India|socialist thinkers in India]] began drawing parallels between the pre-revolution Russian [[proletariat]] and the Indian masses under colonial rule, seeing socialism as a way to empower poor Indian farmers.<ref>{{cite journal |last1=Saxena |first1=Chandni |title=Emergence of Socialism in Early 20 |journal=Proceedings of the Indian History Congress |date=2011 |volume=72 |pages=1515–1516 |jstor=44145782 }}</ref> Following [[Indian independence movement|Indian independence]] these socialist factions, most importantly [[Jawaharlal Nehru|Jawaharlal Nehru's]] conception of democratic socialism, influenced the policies of the Licence Raj.<ref>{{cite journal |last1=Kaushik |first1=P.D. |title=Economic Creed of the Post Independence Congress: The Nehru-Indira Phase |journal=The Indian Journal of Political Science |date=1985 |volume=46 |issue=4 |pages=474–486 |jstor=41855200 }}</ref>

Nehru studied at Trinity College, Cambridge and was exposed to socialist ideas during his time there. He also visited the Soviet Union in 1927, and this experience may have further influenced his views on socialism. However, Nehru's own political views and the policies he implemented as Prime Minister were often more pragmatic and centrist than strictly socialist. He believed in the need for a strong, centralised government and a planned economy, but he also recognised the importance of private enterprise and the market in driving economic growth and development.<ref>{{cite journal |last1=Sharma |first1=Brij Kishore |title=Jawaharlal Nehru's Model of Development |journal=Proceedings of the Indian History Congress |date=2012 |volume=73 |pages=1292–1302 |jstor=44156330 }}</ref> Nehru also believed that protecting domestic industries would help to promote industrialisation and economic development in India, and he implemented a number of protectionist policies during his time in office.<ref>{{Cite web |last=Singh |first=Kuldip |title=Nehru's Model of Economic Growth and Globalisation of the Indian Economy |url=https://core.ac.uk/download/pdf/19918818.pdf}}</ref>

He saw such government intervention as a way to modernise the Indian economy which had been left impoverished by decades of [[Colonial India|colonial rule]].<ref>{{cite journal |last1=Ahanger |first1=Javid Ahmad |title=Revisiting Nehru: The politics of nonalignment and secularism |journal=World Affairs: The Journal of International Issues |date=2018 |volume=22 |issue=2 |pages=24–33 |jstor=48520062 }}</ref> However, Nehru did not seek to eliminate the [[private sector]] entirely, as was the case in the Soviet Union. Rather, he pursued a policy of creating a mixed economy in India, with strategic industries under state control and [[public sector]] corporations guiding investment, while also allowing for a significant role for the private sector and market forces.<ref>{{cite journal |last1=Thakur |first1=Ramesh |title=Restoring India's economic health |journal=Third World Quarterly |date=January 1993 |volume=14 |issue=1 |pages=137–157 |doi=10.1080/01436599308420317 |jstor=3992587 }}</ref>

The economic centralisation and controls required for the war effort during [[World War II]] helped create the bureaucratic and manufacturing infrastructure necessary to institute Nehru's plans,<ref>{{cite journal |last1=Kamtekar |first1=Indivar |title=The Wartime Paternity of India's 'Licence-Permit Raj' |journal=Proceedings of the Indian History Congress |date=2016 |volume=77 |pages=403–409 |jstor=26552665 }}</ref> and so following independence and his election as prime minister, he had the opportunity to put his ideas into action. In his [[Tryst with Destiny|speech]] to the [[Constituent Assembly of India]], he declared, "The service of India means the service of the millions who suffer. It means the ending of poverty and ignorance and disease and inequality of opportunity."<ref>{{Cite web|title=Jawaharlal Nehru - Freedom at Midnight (Tryst with Destiny) Speech to the Assembly of India|url=https://www.americanrhetoric.com/speeches/jawaharlalnehrutrystwithdestiny.htm|access-date=1 November 2020|website=www.americanrhetoric.com}}</ref>

By the late 1950s, the [[Swatantra Party]], the country's first market-friendly political party, had formed in opposition to Nehru's policies. This party, which was made up of ex-landlords, businessmen, and rich peasants, argued that Nehru's centralised economic policies were incompatible with democracy. In a memorandum to party officials, they claimed that "the best guarantee of speed in progress is a maximum of individual freedom and a minimum of governmental interference." They argued that Nehru's policies were stifling individual initiative and freedom and slowing economic progress.<ref>{{cite journal |last1=Balasubramanian |first1=Aditya |title=Contesting 'Permit-and-Licence Raj ': Economic Conservatism and the Idea of Democracy in 1950s India |journal=Past & Present |date=26 April 2021 |issue=251 |pages=189–227 |doi=10.1093/pastj/gtaa013 }}</ref>

[[Chakravarti Rajagopalachari]], a founder of the [[Swatantra Party]], coined the term “Permit-Licence Raj” to encapsulate the party's frustrations with Nehru's policies, writing in his right-wing magazine [[Swarajya (magazine)|''Swarajya'']]:<ref>{{Cite news|last=Katiyar|first=Prerna|title=ET@50: Entrepreneurship no longer an aberration|work=The Economic Times|url=https://economictimes.indiatimes.com/et50-entrepreneurship-no-longer-an-aberration/articleshow/5906233.cms|access-date=1 November 2020}}</ref>

{{blockquote|I want the corruptions of the Permit/Licence Raj to go... I want real, equal opportunities for all and no private monopolies created by the Permit/Licence Raj.|author=|title=|source=}}

== Characteristics ==
A key characteristic of the Licence Raj was a [[Planning Commission (India)|Planning Commission]] that centrally administered the economy of the country. Like a [[command economy]], India had [[Five-year plans of India|Five-Year Plans]] on the lines of the [[Five-year plans of the Soviet Union|five-year plans]] in the [[Soviet Union]]. However, unlike Soviet Union, private sector also played a significant role. The Planning Commission was set up in 1950 to survey the available resources in the country and formulate plans to raise the standard of living.<ref>{{Cite web|last=Bhawan|first=Yojana|date=19 October 2019|title=Government of India Planning Commission: History|url=https://niti.gov.in/planningcommission.gov.in/docs/aboutus/history/index.php?about=aboutbdy.htm|access-date=1 November 2020}}</ref>

Planning Commission enacted the First Five Year Plan in 1951, aimed at developing the agricultural sector amid severe food shortages and an influx of refugees from the [[Partition of India|Partition]], and that plan led to a 4% increase in GDP, higher than the projected 2%.<ref>{{Cite web|last=Krishnan|first=Revathi|date=9 July 2020|title=All about the First Five-Year Plan that was presented by Nehru nearly 70 years ago today|url=https://theprint.in/india/all-about-the-first-five-year-plan-that-was-presented-by-nehru-nearly-70-years-ago-today/457511/|access-date=2 November 2020|website=ThePrint|language=en-US}}</ref> Nehru's government hoped to build on the success of the First Five Year Plan with their more ambitious Second Five Year Plan aimed at continuing agricultural and infrastructure investment while developing heavy industry and increasing employment.<ref name="TYSON1958">{{cite journal |last1=TYSON |first1=GEOFFREY |title=The Second Indian Five Year Plan |journal=Journal of the Royal Society of Arts |date=1958 |volume=106 |issue=5024 |pages=609–621 |jstor=41368676 }}</ref> But this plan failed to reach its goal of 5% growth<ref name="Growth statistics">{{cite book|author=L. N. Dash|url=https://books.google.com/books?id=rRWDxpHcBHoC&q=sixth+five+year+plan+of+india+growth+actual+5.6&pg=PA114|title=World bank and economic development of India|publisher=APH Publishing|year=2000|isbn=81-7648-121-1|page=375}}</ref> and the heavy spending in the plan depleted the country's foreign currency reserves as the country did not have sufficient domestic resources to fund these projects and therefore had to rely on imported capital and technology.<ref name="TYSON1958" />

Another main characteristic of the Licence Raj was heavy regulation on industry. Legislation to regulate industry started with the Industrial Development Regulation Act of 1951, which laid out [[Licensing|licensing restrictions]] on industries it designated as Schedule I which included industrial machinery, telecommunications, and chemical manufacturing.<ref>{{cite web|url=http://legislative.gov.in/sites/default/files/A1951-65.pdf |title=THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951 |date= 31 October 1951 |publisher=New Delhi: Parliament of India}}</ref> Next, the Industrial Policy Resolution of 1956 extended these restrictions by designating certain industries known as Schedule A to be exclusively under state control, and certain other industries under Schedule B to be majority state-owned.<ref>{{Cite journal|last=Sivadasan|first=Jagadeesh|date=2006|title=Regulatory Regime in India: 1947 to 1998|url=http://webuser.bus.umich.edu/jagadees/other/indmfg_data/Reg_history_india.pdf|journal=The B.E. Journal of Economic Analysis & Policy|volume=9|via=University of Michigan|access-date=28 September 2020|archive-date=24 November 2020|archive-url=https://web.archive.org/web/20201124112442/http://webuser.bus.umich.edu/jagadees/other/indmfg_data/Reg_history_india.pdf|url-status=dead}}</ref> Industries in Schedule A included defence production, metallurgy, mining, and transportation.<ref>{{Cite web|title=Archived copy|url=http://eaindustry.nic.in/handbk/chap001.pdf|url-status=dead|archive-url=https://web.archive.org/web/20150528135133/http://eaindustry.nic.in/handbk/chap001.pdf|archive-date=28 May 2015|access-date=29 March 2013}}</ref>

During the 1960s, the Indian banking sector came under criticism for being controlled by a few big industrialists in large cities, and thus failing to meet the needs of rural Indians and small-scale industry. In response, the government of [[Indira Gandhi]] began pursuing "social control" of banking institutions, with Deputy Prime Minister [[Morarji Desai]] spearheading the Banking Laws (Amendment) Bill in 1968 to regulate the commercial banks' leadership. The bill stipulated that at least 51% of the directors should not be directly connected monopolies and big business, that industrialist chairmen had to be replaced by professional bankers, and that banks could not form relationships with companies tied to their own directors. Additionally, Desai forged the National Credit Council (NCC) to regulate credit allocations in order to bring more credit to rural areas and small industry.<ref>{{cite journal |last1=Torri |first1=Michelguglielmo |title=Factional Politics and Economic Policy: The Case of India's Bank Nationalization |journal=Asian Survey |date=1 December 1975 |volume=15 |issue=12 |pages=1077–1096 |doi=10.2307/2643585 |jstor=2643585 }}</ref><ref>Central Office, Reserve Bank of India. (2005). [https://rbidocs.rbi.org.in/rdocs/content/PDFs/90070.pdf Chapter 2: Banking Expands]. In ''The Reserve Bank of India, 1967-1981'' (pp. 54–59).</ref> However, many of these changes were rendered moot when Indira Gandhi decided to fully nationalise 14 major banks in 1969, with 6 additional banks coming under state control in 1980.<ref>{{cite journal |last1=Ketkar |first1=Kusum W. |last2=Ketkar |first2=Suhas L. |title=Bank Nationalization, Financial Savings, and Economic Development: A Case Study of India |journal=The Journal of Developing Areas |date=1992 |volume=27 |issue=1 |pages=69–84 |jstor=4192167 }}</ref>

Indian [[capital control]]s started as wartime restrictions imposed by the British on cross-border transactions during World War II, eventually growing into a complex framework of restrictions on the [[Current account (balance of payments)|current account]] and [[capital account]].<ref>{{cite journal |last1=PATNAIK |first1=ILA |last2=SHAH |first2=AJAY |title=POLICY CORNER: Did the Indian Capital Controls Work as a Tool of Macroeconomic Policy? |journal=IMF Economic Review |date=2012 |volume=60 |issue=3 |pages=439–464 |doi=10.1057/imfer.2012.16 |jstor=23279077 |s2cid=17865492 }}</ref> After independence the Indian government introduced restrictions on the flow of [[foreign exchange reserves]], and following a [[balance of payments crisis]] from 1956 to 1957, the government became more concerned with carefully allocating foreign exchange between different sectors of the economy.<ref>{{cite book |last1=Panagariya |first1=Arvind |chapter=India's Trade Reform |pages=1–68 |chapter-url=https://books.google.com/books?id=DN3YydGo7EsC&pg=PA1 |editor1-last=Bery |editor1-first=Suman |editor2-last=Bosworth |editor2-first=Barry P. |editor3-last=Panagariya |editor3-first=Arvind |title=The India Policy Forum 2004: Volume 1 |date=2004 |publisher=Brookings Institution Press |isbn=978-0-8157-9762-3 }}</ref> After a failed attempt at liberalisation in 1966, the Foreign Investments Board was established in 1968 to scrutinise companies investing in India with more than 40% foreign equity participation. Foreign investment that did not involve technology transfers was severely restricted, and foreign collaboration with local companies was conditioned on export quotas.<ref>{{cite journal |last1=Mukherji |first1=Rahul |title=India's Aborted Liberalization-1966 |journal=Pacific Affairs |date=2000 |volume=73 |issue=3 |pages=375–392 |doi=10.2307/2672025 |jstor=2672025 }}</ref> This tight control over foreign investment became a core part of a broader policy of [[import substitution industrialisation]], the belief that countries like India needed to rely on internal markets for development, not international trade. To achieve this goal, the Indian government erected strict import restrictions and a complex system of tariffs that featured high rates which varied by industry.<ref>{{cite journal |last1=Callen |first1=Timothy |last2=Cashin |first2=Paul |title=Capital controls, capital flows and external crises: evidence from India |journal=The Journal of International Trade & Economic Development |date=January 2002 |volume=11 |issue=1 |pages=77–98 |doi=10.1080/09638190110093172 |s2cid=154055604 }}</ref>

One consequence of the Licence Raj was that it benefited large corporations at the expense of smaller businesses. Because large corporations were often better able to navigate the complex bureaucracy of the Licence Raj and secure the necessary licences, they were able to dominate many sectors of the economy. This made it difficult for small businesses to compete, and contributed to a concentration of economic power in the hands of a few large corporations.<ref>{{Cite journal |last=Kapparashetty |first=Sri B. V. |date=1 April 2018 |title=Impact of MRTP Act for Development of Nation- A Study |url=https://papers.ssrn.com/abstract=3690822 |journal=International Journal of Research and Analytical Reviews |language=en |location=Rochester, NY |ssrn=3690822}}</ref>

Another criticism of the licensing system in India was that it was prone to corruption, as businesses and individuals had to navigate a complex bureaucracy in order to obtain licences and permissions, and may have had to pay bribes or engage in other forms of corruption in order to obtain the necessary approvals.This corruption was fuelled by a broader environment of corruption in India, which was characterised by a lack of transparency and accountability in the government, a weak legal system, and a culture of corruption that had been allowed to persist for many years.<ref>{{Cite web |last=Jordan |first=Joshua |date=24 January 2022 |title=From the Permit Raj to the Billionaire Raj: Corruption, Liberalization, and Income Inequality in India |url=https://globalanticorruptionblog.com/2022/01/24/from-the-permit-raj-to-the-billionaire-raj-corruption-liberalization-and-income-inequality-in-india/ |access-date=6 January 2023 |website=GAB {{!}} The Global Anticorruption Blog |language=en}}</ref>

==Fall of the Licence Raj==
{{see also|Economic liberalisation in India}}

The Licence Raj system was in place for four decades. Many members of the [[Indian National Congress|Congress]], including Prime Minister [[P.V. Narasimha Rao]] and Finance Minister [[Manmohan Singh]], were strong supporters of liberalisation and played key roles in implementing these changes. In 1991, Prime Minister Narasimha Rao, who was also the Minister of Industries, initiated a policy of liberalisation in India. This policy aimed to reduce government intervention in the economy and promote market-based solutions to economic problems.<ref>[http://www.ficci.com/media-room/speeches-presentations/2005/nov/nov17-saarc-somak.htm Address by Mr. Somak Ghosh] {{webarchive|url=https://web.archive.org/web/20060519124909/http://www.ficci.com/media-room/speeches-presentations/2005/nov/nov17-saarc-somak.htm|date=19 May 2006}}</ref>

The Licence Raj was believed by some to be hindering economic growth and preventing the Indian economy from reaching its full potential. This belief was based on the idea that the government's heavy intervention in the market was stifling economic activity and hampering the ability of the economy to grow and develop.<ref>{{cite journal |last1=Das |first1=Gurcharan |title=The India Model |journal=Foreign Affairs |date=2006 |volume=85 |issue=4 |pages=2–16 |doi=10.2307/20032037 |jstor=20032037 }}</ref>

Liberalisation resulted in substantial growth in the Indian economy, which continues today.<ref>{{Cite web|url = http://www.firstpost.com/business/25-years-of-liberalisation-a-glimpse-of-indias-growth-in-14-charts-2877654.html|title = 25 years of liberalisation: A glimpse of India's growth in 14 charts|date = 7 July 2016}}</ref> The Licence Raj is considered to have been significantly reduced in 1991 when India had only two weeks of foreign reserves left. In return for an [[International Monetary Fund|IMF]] bailout, India transferred [[gold bullion]] to London as collateral, devalued the rupee and accepted economic reforms.<ref name="astaire">{{cite web |url=http://www.ukibc.com/ukindia2/files/India60.pdf |title=India Report |publisher=Astaire Research |archive-url=https://web.archive.org/web/20090824103426/http://www.ukibc.com/ukindia2/files/India60.pdf |archive-date=24 August 2009}}</ref> The federal government, with [[Manmohan Singh]] as finance minister, reduced licensing regulations; lowered tariffs, duties and taxes and opened up to international trade and investment.<ref name="astaire"/>

The reform policies introduced after 1991 removed many economic restrictions. Industrial licensing was abolished for almost all product categories, except for alcohol, tobacco, hazardous chemicals, industrial explosives, electronics, aerospace and pharmaceuticals.

Arguing that the Planning Commission had outlived its utility, the [[Modi government]] disbanded it in 2014.<ref>{{cite news|last1=Choudhury|first1=Chandrahas|date=29 August 2014|title=India's central planning gets its eulogy|work=livemint.com/|url=https://www.livemint.com/Opinion/RFFvvK2KIsZ8lzUdgLNP0K/Indias-central-planning-gets-its-eulogy.html|access-date=11 April 2018}}</ref> On 6 August 2014, the Indian Parliament raised the limit on [[foreign direct investment]] in the defence sector to 49%<ref>{{Cite web|url=http://articles.economictimes.indiatimes.com/2014-08-07/news/52555932_1_defence-sector-cent-fdi-railways-sector|title=Business News Today: Read Latest Business news, India Business News Live, Share Market & Economy News|access-date=31 August 2014|archive-date=7 August 2015|archive-url=https://web.archive.org/web/20150807044440/http://articles.economictimes.indiatimes.com/2014-08-07/news/52555932_1_defence-sector-cent-fdi-railways-sector|url-status=dead}}</ref> and removed the limit for certain classes of infrastructure projects: high speed railways, including construction, operation and maintenance of high-speed train projects;<ref>{{Cite web|url=http://indianexpress.com/article/business/business-others/govt-notifies-fdi-cap-relaxation-in-railways/|title = Govt notifies FDI cap relaxation in Railways|date = 28 August 2014}}</ref> suburban corridor projects through PPP; dedicated freight lines; rolling stock including train sets; locomotives manufacturing and maintenance facilities; railway electrification and signalling systems; freight and passenger terminals; infrastructure in industrial parks pertaining to railway lines and mass rapid transport systems.

== Consequences of the fall of Licence Raj ==
{{See also|Economic liberalisation in India#Criticisms|1991 Indian economic crisis#Aftermath}}
The fall of the Licence Raj and the implementation of [[economic liberalisation]] policies have contributed to increased regional inequality in India. Some experts argue that these policies benefited certain regions of the country, such as the major cities and industrial centers, at the expense of others, leading to a widening gap between rural and urban areas.<ref name=":0">{{Cite web |title=The Unequal Effects of Liberalization: Evidence from Dismantling the License Raj in India |url=https://sticerd.lse.ac.uk/dps/de/DEDPS45.pdf}}</ref>

It has contributed to mass migration from rural areas to cities, as people sought to take advantage of new economic opportunities and improved living standards in urban areas. This mass migration can place a burden on cities, as they may struggle to accommodate the influx of new residents and provide them with adequate housing, education, and other basic services. Slums in India are a common sight in many cities and are often found in areas that are vulnerable to flooding or other natural disasters. They are often home to marginalised communities, including migrant workers, informal sector workers, and other groups that may be excluded from mainstream society.<ref>{{Cite web |last=Colmer |first=Jonathan |title=Urbanisation, Growth, and Development: Evidence from India |url=https://www.shram.org/uploadFiles/20180110111049.pdf}}</ref>

The scaling back of public sector enterprises may also have led to a reduction in the ability of the government to direct investment and resources towards priority areas and to protect the interests of workers, minorities and other stakeholders.<ref name=":0" />

==See also==
* [[Economic history of India]]
* [[Mafia Raj]]
* [[Planned economy]]
* [[Socialism in India]]
* [[Swadeshi movement]]

==References==
{{reflist|30em}}

{{Economy of India}}
{{Socialism by state}}
{{Socialism}}

[[Category:Political corruption in India]]
[[Category:Economic history of India (1947–present)]]
[[Category:Legal history of India]]
[[Category:Licenses]]
[[Category:Political history of India]]
[[Category:Bureaucratic organization]]
[[Category:1990 in Indian economy]]
[[Category:Planned economies]]
[[Category:Socialism in India]]
[[Category:History of socialism]]
[[Category:Mixed economies]]