Mumbai: When India became independent in 1947, the country hardly had the capacity to manufacture safety pins. And how things have changed; today we are sending rockets to space.

The industrialisation of India began when Jawaharlal Nehru (remember him?) conceived the proposal of setting up public sector enterprises (PSEs), which would be the pride of the nation and control the "commanding heights of the economy."

PSEs may not be necessary today but they were very much a necessity then. Suppose you wanted to start a steel plant in the fifties and suppose the cost of the plant was Rs 500 crore, where will the money come from? There was hardly a capital market and no foreign investments worth its name. The only solution was for the government to set up such industries.

That led to the passing of the Industrial Policy Resolution during the second five year plan, which saw steel plants being set up in Bhilai, Rourkela, Bokaro and other places. The second five-year plan was a tremendous success, but later the evils that accompany all such central planning endeavours started creeping in. The main problem was that too much power was concentrated in one hand.

The private sector could hardly start any enterprise without the permission of the government. Thus emerged the licence-permit raj. A nexus developed between the industrialists, ministers and the government babus. One group of industrialists was able to corner all the licences, thereby preventing any other entity to enter their field.

The result of all this was monopolies and lack of competition. With lack of competition, the products developed in the country were shoddy and much below the world standards; the Indian consumer had no other choice but to grin and bear it.

That is not all. Excessive government control and the licence-permit raj paved the way for corruption, which has developed deep inroads in our community. The bribe-giver and the bribe-taker talk openly about it and not much can be done by anybody to stop it or punish the guilty. Nothing more needs to be said about it except that the country's president in his pre-Independence Day address to the nation had to speak about it.

The Bhakra Nangal and many other projects were set up to develop agriculture and benefit the farmers. Till the late sixties India is to consistently depend on food aid especially from the US Public Law 480, which entailed providing food for deprived and destitute nations. That was what we were - a beggar nation.

The Bhakra Nangal and other such projects along with Professor M S Swaminathan's high-yielding rice varieties changed the scene dramatically. By 1967, we became a food-sufficient nation and today we are a food-surplus nation.

But who really benefited from the Green Revolution? The high-yielding rice varieties can increase the food production only if a farmer has a holding of over, say, 12 acres of land. The small and the marginal farmer could not take advantage of the Green Revolution.

Take the case of other schemes for the rural poor. If a 250-bird poultry unit for the rural poor was set up, all the birds died within days. No poultry unit is viable unless it is more than a 5,000-bird unit and no rural poor has the capacity to sustain a 5,000-bird unit.

All these schemes were sanctioned for people living in the rural areas but you will find that people having farmhouses are engaging in activities meant for the rural poor - and no one is complaining.

This is how we plodded along up to the mid-eighties, clocking a growth rate of 4 per cent, which one eminent Indian economist described as the "Hindu growth rate." It looked as if India could not look beyond her nose.

Things started changing slowly from the time Rajeev Gandhi became the prime minister. He recognised that the old socialistic pattern had not worked and will not work. He changed the mindsets of the people by introducing computers and making the janata realise that profit is not a dirty word.

The reforms of Dr Manmohan Singh were the first official step towards liberalisation of the economy. The licence permit raj was dismantled, and this encouraged more and more entrepreneurs to set up businesses.

Keeping with the globalisation trends, the currency was gradually being freed to suit business requirements. Running of PSEs is now not a viable proposition and so those PSEs that are not of defence or strategic importance are being sold out and the monies are being deployed to meet the country's fiscal deficit.

Thanks to the reforms, today the growth rate is more than 6 per cent and the government is targeting a 10-per cent growth rate in the coming years - an achievable figure considering the fact China has achieved it. If we continue at this rate, we will become an economic super power by the year 2020.

All that is fine but what about the plight of the small and marginal farmers and the landless labourers? Have they benefited from the fruits of liberalisation? The answer is a resounding NO.

And nothing will happen in this front, unless measures like land reforms, agricultural tax and value added tax are introduced. Introducing these measures requires political will and barring the states of West Bengal and Kerala, no other state seems to have that quality.