The Political Necessity of the Licence-Permit Raj

“In contemporary popular imagination, the ‘license-permit-quota raj’ symbolises everything wrong with state regulation and intervention in ‘socialist’ India…. 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. Industrial licencing emerged out of the nationalist discourse on development, and was one of the key instruments in establishing and legitimising the sovereignty of the post-colonial Indian state. It was not initiated to give effect to any one coherent political ideology, but rather, to consolidate the eminent domain of the state in matters of industrial governance so that the state could pursue any political and economic goal it identified. Fundamentally a political project, industrial licencing cannot be analysed only in economic terms. It must be contextualised in the wider political and legal imagination of a post-colonial India.”