Meaning of Public Policy

“Public Policies are the action part of the government.” It is what the governments
actually do. This is the most accepted and recognized definition of public policy.
Modern states are welfare states; the degree of welfarianism may vary from state to
state. In a welfare state, governments have a lot of responsibilities to fulfill. The
responsibilities require planning. By the means of planning, the actions of
government are decided. And the actions of the government require policies. Since
the planning is done by the government and the policies are framed by the
government, these policies are called Public Policies.

The existence of public policies has been quite long. They are as old as
governments. The form of government may differ, but public policies have been
always formulated and implemented. Policies are thus, those plans of action that
are made in order to achieve an objective or a particular goal.

The area of public policy is very extensive. It is used in specific areas like
environment, foreign affairs, public health, social welfare, education, etc.
Basically, whatever government does in public interest is termed as public policy.
It may be in terms of government schemes, programs, laws, legislations, etc.
By all these, the meaning of public policy can be derived as-

• A declaration of goals and objectives of the government.

• A declaration of courses of action.
• A declaration of social values.

Characteristic Features of Public Policy [yksd uhfr dh fo”ks’krk,a]:-

1. Public policy is subjectively defined by an observer

2. It consists of a series of patterns of related decisions.
3. The process of policy-making involves several sub-processes and may
extend over a considerable period of tim
4. It has a purpose which may change over time, and in some cases, may be
defined only retrospectively.
5. Public policy involves action as well as inaction of the governmentA
public policy involves many participants- the stakeholders in public policy
comprise the policy makers, those affected by the decisions like the public,
and other interest groups and all those interested in public policies like the
experts and media
History and Origin of Public Policies

According to James O. Dunn, the earliest example of public policy in ancient times
was the Code of Hammurabi that dates back to 18 th century BC. It consisted of
282 laws that suggested ways to establish a just public life. It is said that this code
was given to King Hammurabi by a Babylonian God.

Even in ancient India, policy advices had existed. The kings used to receive
advices from their near ministers and sages.

Machiavelli (1469-1527) and Francis Bacon (1561-1626), have also contributed to

the development of policy advices. They were of the view that the Prince or the
King must receive advices from the advisors.

So, in ancient times, the policies were in the form of laws, in medieval times, these
were in the form of advices.

Later, Thomas Hobbes, John Locke, Jeremy Bentham and J.S.Mill advocated for
policies that should made in public interest and shall ensure ‘the greatest happiness
of the greatest number’. These were the first form of social welfare policies.
However, till this period policy sciences were not systematic. The policy advices
that were provided to the king were personalized and biased. The advisors wanted
to please the king and seek favors from him by telling him what he wanted to hear.

Even in 17th century, policies were not formulated systematically. They addressed
social problems, but they did not attempt to carry on researches.

Changes occurred in policy sciences after the publication of the works of certain
writers- Adam Smith (Wealth of Nations, 1776), David Ricardo (Agriculture
and Free Trade Policies) and Woodrow Wilson (The Study of Public
Administration, 1887). These publications developed insights into policy process
and advocated for statistical analysis through economics.

Later, the theory of pragmatism was adopted in 19th century. The theory that states
that political problems must be met with practical solutions is known as the theory
of pragmatism. The supporters of this theory are- Charles Pierce, John Dewey and
William James.
Policy sciences as an important social science discipline emerged with the
publication of Harold Lasswell’s essay- ‘The Policy Orientation’, published in the
Policy Sciences magazine in 1951.
In 20th century, public policy provided a platform for social scientists to involve
themselves for the betterment of the society. Policy sciences became more popular
since 1960s, when a number of social welfare programs were made.

The Need to Study Public Policy:-

1. Public policies help to understand the causes and consequences of policy

decisions and improve our knowledge of society.
2. Public policies are also a mirror to the society. The policies are framed based
on the various socio-economic conditions and political systems of a society.
3. Public policies can also be viewed as an independent variable, where we
study the impact that it has on the society and political system.
4. Through public policy study, we can gain practical solutions to problems.
Policies provide professional advices to certain problems. The experiences
gained through certain policies serve as guidance to others, who face similar
problems.
5. Policy studies help in political discussions. The discussions help in
improving the quality of public policies and also help in advancing
awareness among the public.

Types of Public Policy:-

There are various types of public policies that can be seen. They are:-
1. Substantive Public Policy:- These policies are mostly related to general
welfare and general development of the society. It includes policies for-
provision of education, employment opportunities, law and order
enforcement, anti-pollution programmes. These policies must be framed in
respect to chief characteristic features of the Constitution and socio-
economic factors of the society. These policies are mostly designed in the
third world countries.
2. Regulatory Public Policy:- These policies are designed to establish
regulations and are implemented by the use of force. Concerned with the
regulation of trade, business, safety measures, public utility, etc. Usually
regulations are carried out by autonomous organization’s on behalf of the
government. For eg.- LIC, RBI, Sate Transport Corporation, etc.
3. Distributive Public Policy:- Related to a specific segment of the population
and with the distribution of goods and resources in a society. Also includes
the grants like goods, welfare and health services. It includes all policies that
fall under the welfare programmes.
4. Redistributive Public Policy:- Rearrangement of policies that bring about
basic social and economic changes in the society.
 5. Capitalization Public Policy:- It is concerned with different levels of
government. It includes the financial subsidies given by union to state and
local governments.

Public Policy Process

Public policy process is the process through which policy ideas are translated into
actual policies. Policy ideas are the solutions to existing problems. These policies
are then implemented and fetch results.

There is an environment within which the policy making occurs, which is known as
policy environment. Public policies cannot be made in isolation; both the
environment and policies have an influence on each other. The demands for
policies emerge within the environment. Environment limits the areas and put
some constraints on what can be done by policy makers.

There are certain environmental factors that have an influence on policy making
i. Political Culture]: It widely held beliefs, values and attitudes concerning
governmental policies and actions. Political culture means the views of the
public, how people see the various actions taken by the government.
ii. Socio-economic Conditions: These include the prevailing social and
economic conditions in a society. It includes the facts

that whether a country is developed or developing, its economy is stable or

unstable, the society where the policies are to be made is liberal or
conservative. All these factors affect the making of public policies.
iii. Levels of Economic Development: It includes the level of technological
development and the availability and allocation of resources.
This makes it clear that why some decisions are taken in a society whereas those
decisions are difficult to reach at certain societies.

Public Policy Process :-

Public policies are initiatives taken by the government to solve particular problems.
They can be in the form of programs, projects and even budget allocations.

According to Thomas R. Dye, there are six stages in public policy process:
1. Problem Identification- identifying the problems that exist in a society.
 2. Agenda Setting- deciding which public problem is more important and shall
be taken care of at priority basis. It also means what government aims to do
and what solution to provide to the problem.
3. Policy Formulation- designing policy proposals to solve the problem and
deciding the goals and objectives of the policy.
4. Policy Legitimisation- selection of a proposal, development of political
support for it, and enacting it into a law or program.
5. Policy Implementation- transforming a policy into effect.
6. Policy Evaluation- evaluating and analyzing the results and effects of the
policy.

In broad context, the public policy process is classified into three categories
 Policy Formulation
 Policy Implementation
 Policy Evaluation]
Policy Formulation [नीति तनमावण]:-

This is the most important stage in the formulation of public policy. The demands
and problems are transformed into policies in this stage only.

Policy formulation can be divided into four stages

Identifying public problems- certain problems exist in society. Some are solved
mutually, that means that they do not require laws or policies. Whereas some are
more serious and critical. The problems that can be solved mutually are non-issues
in the language of public policy, whereas the problems that require action are
issues that needed to be solved by the government. So this stage includes
separating issues from non-issues.
Putting public problems on policy agenda- it includes bringing the problems
infront of the government. It can be done through the political leaders, various
NGOs, and other groups, social movements or public demands and with the help of
media.
i. Formulating policy proposals to deal with the problem- policy proposals are
prepared by certain ministries of the governments who specialize in their
fields. Sometimes commissions are set up to provide recommendations.
ii. Making policy decisions- policy formulation is finally done by the
executive, legislature, administration and judiciary. All of them affect
policy formulation in some form or the other.
Different actors play different role in policy formulation Official policy-makers:
these include legislators, executives, administrators and judges.

➢ Unofficial participants- interest groups, political parties and individual

citizens.
There are certain challenges that policy makers face, while formulating public
policies. They are-

a. Absence of political environment, political support and lack of public

support.
Technical problems that can be seen in terms that there are problems in
understanding the actual cause of the problem and then accordingly providing
solutions. For e.g.- everyone is aware that the main cause of global warming is the
carbon and greenhouse gases emissions, but there are no practical solutions that
can be employed without causing socio-economic disruptions.
b. Lack of basic infrastructures.
Policy Implementation :-

Implementation is the task of putting formulated policies into practice. Policy

implementation is done by-

➢ Executives (political and non-political)

➢ Legislature (keeping a check through parliamentary discussions)
➢ Judiciary (law enforcement and review of actions)
➢ Political parties (by putting pressure to either implement certain policies or
prevent them)
➢ Civil society groups or NGOs (by spreading awareness about the policies)

There arise certain problems in implementation: -

i. Poor policy design

ii. Absence of financial resources
iii. Lack of cooperation between various branches
iv. Public unawareness
v. Politicization and centralization
Policy Evaluation:-

In this stage, the effectiveness of a public policy in terms of its results is assessed.
It also contributes in evaluating the mismanagement of policies and therefore
providing an opportunity to solve the problem again.
Public Policy Cycle

Agenda
setting

Formulat
Feedback
ion

Evaluatio
Adoption
n

Impleme
ntation

Policy Analysis

Since independence, Government of India have been framing certain policies to

achieve various objectives, mainly of development and welfare. There were many
problems that existed during independence and in order to solve those problems,
the government framed certain policies.

But even after so many years we have not achieved the expected results. There are
various reasons behind it. And in this context comes the importance of Policy
Analysis. Policy Analysis acts as a tool to determine how the policies are framed
and how they should be framed in order to gain the best and effective results.

Any government has to work under the constraint of limited and finite resources.
The issues and problems, whereas, that it faces are numerous. Also, the
government has to keep in mind the socio-economic and political environment. It is
in this situation that the government is expected to come out with policies which
address problems and issues arising out of these realities. Problems arise out of
socio-economic and political realities and to solve them we need public policies.

The main function of policy analysis is to help the policy makers in answering the
question-“what should be done?” In this regard, it is seen as-

i. Policy analysis informs us as to how policies have been developed and what
is the content and purpose of the policy. It discusses about the process
through which problem was identified, objective that was decide and also
deals with content and the purpose of the policy.
ii. It is also used as a tool to suggest the policymakers about what policy would
be better to adopt in order to solve the problem at that time.

In this way, policy analysis is both descriptive and prescriptive. It is descriptive in

the sense that it tells about-

• What policies are adopted and why

• By what means have they been framed
• What problems do they seek to solve (goals and objectives)

It is prescriptive because it-

• Suggests the best and efficient method to solve the problems

• Provides suggestions to certain problems
The development of the science of policy analysis is very new. Public policies in
earlier phases were just a part of study of political science. It dealt with the
institutions that were involved in solving problems. Later, when political science
involved the study of political behaviors, public policy began including the study
of processes involved. When the study of public policy formally began, it was felt
that the framing of policies is most important.

➢ The problem identification, formulation and implementation were given

more importance.
➢ It was felt that once policies are made and implemented, they will solve all
the problems.
➢ But certain problems arose and this gave the need to even evaluate the
policies.
➢ Thus, the concept of policy analysis emerged.

Why is policy analysis important?

There are three main reasons about why we must analyze the policies-
 i. Scientific reasons:- Studying about public policy improves our knowledge
of the society. Public policy, as a dependent variable, tells about the
socioeconomic and political conditions. And public policy as an
independent variable, tells us about the impact that it has on society and the
political system.
ii. Professional reasons:- Public policies help us to apply knowledge of social
science to the practical problems. It requires factual knowledge as well as
they provide professional advice.
iii. Political reasons:- It is the responsibility of political scientists to provide
solutions to social and political crisis. And also spread political awareness
and encourage political discussions.

What questions can be asked in policy analysis?

➢ Description of public policy (what government is doing)
➢ Inquiry about the causes or determinants of public policy- effects of
environment on public policy and what is the need for such policies. ➢
Inquire about the consequences or impacts of public policy.

Difference between Policy Analysis and Policy Advocacy:-

Policy analysis explains the causes and consequences of various policies and it
studies about what governments do and what are its consequences and effects on
the society.

Whereas, policy advocacy prescribes what policies must be pursued. It tells about
what governments ought to do and it tries to bring change in what they actually do.
It also deals with what the government does through discussions, persuasion,
organizations and activism. Public policy involves:-

1. A primary concern with explanation rather than prescription. Public policy

involves description and analysis of the policy before giving any
prescription or recommendation.
2. A search for the causes and consequences of public policies.
3. It tries to develop general theories about public policy that are reliable and
can be applied to different governmental agencies and policy areas.

Problems in Policy Analysis

Policy analysis provides solutions to problems. But various arguments are given as
to why policy analysis is not able to provide solutions.

1. It is not clear if the government policies can actually cure the evils of
society. Governments are restricted by many powerful environmental forces,
such as cultures, traditions and religious practices. These forces cannot be
controlled by the government.
2. Policy analysis cannot offer solutions to problems when there isn’t general
agreement on what the problems are. The standard of defining problems
according to every individual is different.
3. Policy analysis deals with very subjective topics and must rely upon
interpretation of results. The description of the causes and consequences of
the policies are explained subjectively by different individuals. The results
are also interpreted differently.
4. There are limitations in the methods of social science research. It is not
possible to conduct controlled experiments on human beings.
5. Problems related to society are very complex. Due to this, social scientists
are unable to make accurate predictions about the impact of policies. Social
scientists do not know enough about individual and group behaviors to be
able to give reliable advice to policy makers. Most of the social problems are
shaped by many variables and thus providing one solution is not possible.

Types of Policy Analysis

Policy analysis can be classified as:-

1. Empirical, Evaluative or Normative Policy Analysis:- Three types of

questions are put forward for argument in this type of analysis:-
• What happened to the problem that existed earlier before the
implementation of the policy?
• Were the objectives of the policy met?
• What should be done for the future courses of action?
Empirical Policy Analysis:- It is based on an interpretation of the past policies.
This approach is concerned with analyzing the causes and effects of given public
policy and attempts to answer about what steps have been taken with regard to the
problem earlier. For example, analyzing the government expenditure on education
over a period of time.
Evaluative Policy Analysis:- The evaluative approach focuses on policy or
programme evaluation. It deals with questions such as- did the implemented policy
achieve its objective, and it also evaluates the results and impacts.

Normative Policy Analysis:- it primarily concerns with recommending future

courses of action for given problems. It tries to seek answers to questions like-
what should be done for future course of action, and provides recommendations
and suggestions accordingly.

2. Retrospective or Prospective Policy Analysis:- Retrospective policy

analysis refers to the historical analysis and interpretation of past policies. It
analyses the major aspects of historical policy research available on the
problem under consideration. It also deals with what researches have already
been done and what options or solutions have been provided and
implemented. It is also termed as ex-post or post-hoc policy analysis.
Prospective policy analysis focuses on the outcomes of any proposed policy.
Out of all available options, it tries to analyze or prospect the outcome of
those policies or options. The policy analyst attempts to predict the future
status of results from the policy option available to them. It is also termed as
pre-hoc or anticipatory policy analysis.
Retrospective analysis produces information for the decision makers,
whereas prospective analysis often creates a large gap between solutions
provided and practical efforts made.
3. Predictive, Prescriptive and Descriptive Policy Analysis:- Predictive
policy analysis refers to the forecasting of future results of the
implementation of particular policy alternatives. They recommend actions
that result in particular outcome. They also predict the outcomes of
recommended actions.
When the policy analysts are not sure about the nature of solutions to a
problem, they may opt for prescriptive analysis. Only prescriptions are
provided for solving a particular problem. The policy maker’s attitudes,
beliefs and preferences may influence the selection of an option.
Descriptive policy analysis refers to historical analysis of past policies. It
also evaluates new policies as it is implemented. Here policy analysis is
conducted after policy implementation. The primary concern is to
understand the problem rather than to solve it. The descriptive public
policies are often incorporated with prospective policy analysis. The
implemented policies are monitored and evaluated to decide on whether to
continue or modify the earlier policy. The information, thus gathered, will
help in solving future problems.
Methods in Policy Analysis

The team that analyses the policy consists of those analysts who use different
methods and techniques to put forward policy alternatives. The methods can be
expressed by graphs, diagrams, tables, decisions or mathematical equations.

The methods that are popularly used are-

i. Cost-benefit analysis
ii. Planning- programming- budgeting system
iii. Experimental method iv. Survey method.

These methods are both qualitative as well quantitative.

Process of Policy Analysis

According to Patton & Sawicki, policy analysis involves six steps:-

i. Verify, define and detail the problem

ii. Establish evaluation criteria
iii. Identify alternative policies
iv. Evaluate alternative policies
v. Display and distinguish among alternative policies
vi. Monitor the implemented policy

We will be discussing all the steps in detail.

1. Verify, Define and Detail the Problem: - It involves checking and gaining
all the details of the problem. Sometimes, there are larger problems that are
hidden. Therefore, clearly studying about the problem in detail is important.
The parties involved or the stakeholders must be clearly asked about what
they anticipate from the outcomes of the policies. It must be checked if the
data collected or available is enough or more data needs to be collected.
2. Establish Evaluation Criteria: - In order to measure, compare and select
among alternatives, relevant evaluation criteria must be established. Criteria
for evaluation at both stages include- evaluation of the alternatives and
evaluation of the implemented policies. The things that needs to be
considered are:-
• Cost, net benefit, effectiveness, efficiency, equity, administrative ease,
legality, political acceptability.
• Economic benefits and costs must be considered
• Whether the policies harm or benefit in general and with context to a
particular group.
• The impacts, influences and changes.
3. Identify Alternative Policies: - After defining the problems, it is now time
to search for such alternatives that will solve the problems. The alternatives
can be to do nothing or to search such policies that will benefit the outcome.
Sometimes, search for alternatives, gives a new definition to problems that
were not thought of earlier.
4. Evaluate Alternative Policies: - All the alternatives are studies deeply. It is
evaluated as to how each alternative policy will outcome and what will be
their effect. If required, more data will be collected. All possible social,
economic and political influences of the alternatives will be evaluated. All
 the alternative policies, their effects, their costs and their possible outcomes
will be evaluated.
5. Display and Distinguish Among Alternative Policies: - The results of the
evaluation of all the possible alternatives are presented at this stage for
decision making. The better options are selected from amongst them,
keeping in view their technical superiority, political feasibility, time and cost
benefits and side effects.
6. Monitoring the Implemented Policy: - The analyst is not involved in
implementation of a policy. However, he must be involved in the
maintenance, monitoring and evaluation of the implemented policy.

By far, whatever we discussed, we can derive one major but simple definition of
policy analysis- “The systematic evaluation of the policy process, policy
alternatives and policy outcomes can be termed as policy analysis.”

Policy analysis contains these three things:-

i. Policy process
ii. Policy alternatives
iii. Policy outcome

When these three are evaluated, it is called the policy analysis.

Policy Analysis: Summary

By far we have discussed the meaning of public policy and an introduction of

policy analysis has already been provided. In this series, we will be summarizing
the concept of policy analysis.

Moving on to the meaning of public policy analysis, we will try to understand it by

isolating the terms. Barret and Fudge have provided the meaning of public, when
they argue that public policy is conceived when a policy emanates from the public
sector, including both the institutions of the central, local governments and
statecreated agencies such as water or health authorities, commissions and
corporations. Therefore, according to their definition, public represents
governmental bodies and officials. The notion of policy can be appropriately
captured in the words of Sharkansky as, “a proposal, an on-going programme, and
other goals of a programme, major decisions or the refusal to make certain
decisions.”
Robert and Edwards mention that a policy is a set of decisions taken by a political
actor concerning the selection of goals and the method of attaining them relating to
a specified situation. The concern of policy is in the making of decisions regarding
a course of action to be followed by government in dealing with a problem or
matter of concern.

Consequently, public policy is a set of inter-related decisions by a political actor or

group of actors concerning the selection of goals and the means of achieving them
within a specified situation where those decisions should, in principle, be within
the power of those actors to achieve.

Public policy is a tool of resource allocation channeled through meeting

governmental goals and objectives. Thus, Roberts and Clark submit that public
policy is a series of steps taken by a government to solve problems, make
decisions, allocate resources or values, implement policies and, in general, do
things expected of them by their constituencies.

When we have been talking about the decision making by the government, it
becomes important to discuss about the public policy process here. The policy
process starts with the formulation of public policy. In formulation, the most
important step involves the agenda setting.

Agendas are a set of issues that are found in a society. There are certain problems
that exist in a society, and government has to decide what problems it wants to
solve first. Choosing the most relevant problems that need attention and putting
them in its priority list is called agenda setting. There are certain approaches to
agenda setting given by different philosophers. These approaches are based on-

• On what basis agenda is set

• What determines the agenda
• Influences on agenda
Schattschneider talks about the politics of agenda setting. He mentions that
problems are result of politics. According to him, problems or conflicts are created
by politics. Issues go up and down the agenda list according to the interests of the
politicians. Policies and opinions are mobilized to ensure that conflict is managed
and contained. Political organizations exploit some kinds of conflict and suppress
others. Some issues are organized into politics, while others are organized out.

Cobb and Elder talk about the expansion and control of agenda. According to them,
issues depend on some triggering devices. Triggers can be both, internal and
external. Internal triggers are natural or unanticipated human events such as
technological changes. Whereas external triggers include international conflict,
patterns of world system and alignment of war. They also mention that agenda
building can be both in form of expansion and containment. Expansion means
expansion of an issue from a specific interest group to an attentive public and
finally to the general public. Containment of any issue is done in order to contain
any issue that can yield negative results both for society and politics. Certain
agents play an important role in agenda setting:-

➢ Mass media
➢ Civil society organizations
➢ NGOs

Agenda setting can also be seen from various approaches:-

i. Institutional approach: - It deals with various institutions that play important

role in setting up of problems into agendas.
ii. Group approach:- Involvement and influences of groups on the agenda
setting
iii. Elites: - What role do elites play in agenda setting. iv. Maximum benefits: -
It deals with setting up of those agendas that can bring maximum benefit and
social gain.
v. Public opinion: - it studies those agendas that are shaped by parties, media, etc.

There are various problems that can be seen in agenda setting. These problems can
be listed as-

• Shaping general agreement

• Avoiding violence during agenda setting
• Appropriate role plays are not seen
• Politicization of media and other institutions.
Apart from agenda setting, public policies also involve decision making. Decision
making means choosing one course of action over the other. Decisions are of two
types- programmed and non-programmed. Programmed decisions are routine and
repetitive, based on standard procedures, well-structured and are made through
programmed procedures. Non-programmed decisions are no routine decisions and
are unique decisions. They are made to solve ill-structured problems. These types
of decisions are non-repetitive and are made in emergency situations.

However, it is not only decisions of government that constitute public policy

option. In this sense, Thomas Dye defines public policy as whatever government
chooses to do or not to do. It is important to bear in mind that inaction is also an
action; thus, failure to make decisions is a public policy in itself since the resultant
effect of government’s inaction or refusal to make certain decisions is felt by the
public.
Policy analysis simply aims at generating detailed knowledge about proposed or
actual policies. According to Shafritz, policy analysis is a set of techniques that
seeks to answer the question of what the probable effect of a policy will be before
it actually occurs. This is known as “before-the-fact-analysis”. The utility of this
kind of analysis is that any negative probable effect, identified before the policy is
implemented, gives room for early policy modification. Any policy analysis
undertaken when a policy is under implementation or has already been executed is
termed “after-the-fact-analysis or programme evaluation.
George Kant refers to policy analysis as a systematic, analytical and creative study
whose primary purpose is to produce well-supported recommendations for actions
in dealing with creative political problems. The Rand Corporation concept of
policy analysis mentions that policy analysis is an enquiry, the purpose of which is
to assist decision-makers in choosing a preferred course of action from among
complex alternatives under certain conditions. E. S. Quade says that policy analysis
is any kind of analysis that generates and presents information in such a way to
improve the basis for policy makers to exercise their judgments.

What emerges from these various definitions is that political or policy actors are
daily confronted with the dilemma of complexities of alternatives, judgments, and
they must take care that decision-making must be based on logical rules or reasons
rather than sentiments.

Summarizing in the words of Roberts and Edwards, we can say that policy analysis
is concerned with the study of the formulation, implementation and evaluation of
public policy, the values of policy-makers, and the environment of the
policymaking system, the cost of policy alternatives and by the study of policies
for improving policy-making.

Theories of State

The different theories of state mention about the establishment of a state, its
structure, its nature and its purpose. We will be dealing with them one by one and
we will also see how the policies are formulated in these states.
Pluralist Theory of the State:-
The pluralist theory of the state believes that the society is made up of several
plural groups that are socio-economically, politically, religiously distinct and are
caste and class based. The pluralist theory is opposed to the Marxist and elitist
theory.

This theory portrays the state as a mechanism designed to serve the interests of
various groups simultaneously. A pluralist state refuses the existence of a single
centre of power in society. It is characterized by multiple centres of power. Such a
state does not hold supreme power. It must act as an impartial arbitrator between
the claims of several social groups for the allocation of the scarce resources of the
community. It must also justify its authority by proving to be the guardian of
justice in society. Only a democratic state, which provides the right to freedom of
association to its citizens, would be capable of evolving into a pluralist state. This
right would enable the citizens to form independent associations for pursuing their
specific interests as well as their common interest.

Structure and Nature of a Pluralist State:-

• State is neutral in nature, which means, that it is not supportive of any

particular group or class, as is claimed by the Marxists and Elitists.
• There are various influences that affect the state. State is vulnerable to
various influences from various groups in the society.
• Modern state is a framework where the interests of the society can be
reunited. And since the state is neutral, it will have to keep in mind the
interests of all groups.
• Powers are not concentrated in the hands of the few, but are heavily
dispersed among a variety of groups and actors.
• There can be various sources of political power. A single group cannot have
monopoly over the political power.
• The role of the state is to reconcile the diverse interests in the society. The
process of decision-making is just the outcome between different groups,
with government institutions acting as a mediator.
• The main exponents of this theory were- Harold Laski, J.N. Figgis, Ernest
Barker, G.D.H. Cole, A.D. Lindsay, Duguit, MacIver.

The public policies according to pluralist theory of state will be:-

i. As reconciliation between the diverse interests of the society, in the

form of compromises. A society has certain groups with varying
interests. Public policies will be the final compromises made between
the varying interests of these groups.
 ii. The policy formulation will have influences of certain groups that exist
in the society. Every group tries to fulfill its own interests and therefore
will try to create an influence on the policy formulation.
iii. Policy implementation and the success of the policies will depend on
the influences of the various groups. What affect a certain policy will
have upon a particular group will depend on how much that group can
create an influence upon the policy implementation.
iv. The state policies are based on the concerns and interest of society. They
reflect public opinions and demands.
v. The policies in such states are often neutral in the view that they are
compromises between the demands of various groups, and often make
sure that even the weakest groups are heard.

Neo-Pluralist Theory of State:-

Neo-pluralism came as a challenge and critique to the theory of pluralism. It views
the state as an autonomous actor that looks after its own interests and it no longer
acts as a mediator. It talks about an uneven distribution of socio-economic power.

Public policies in a neo-pluralist state:-

i. Neo-pluralism views that there are multiple pressure groups that compete for
fulfilling their interests, the political agenda is, however, biased towards the
corporate powers.
ii. The powerful multinational interests and dominant states play an important
role in determining policies in international realm.
iii. State policies are influences by groups whose relative strength is caused by
huge investments, like that of corporates, business and industrial houses. iv.
States many a time bows down and misuses its powers.
v. Public policy in such states is influenced by these groups and many a times
goes against the majority will.
Theories of State:-
Marxist Theory of State:-
This theory views state neither as a natural institution nor as an ethical institution.
It treats the state as an artificial device. It treats the state neither as a manifestation
of the will of the people, nor as an instrument of reconciliation of conflicting
interests.
Marxist theory of state was given as opposed to the liberal theory of state. Major
exponents of this theory were Marx and Engels.
According to Marxist theory of state, the State comes into existence when society
is divided into two classes, who were opposed to each other. The emergence of
‘private property’ led to the rise of two classes- owner and labours.
Marxist theory views State as-
a) State as an instrument of dominant class- The society, after the emergence of
private property, got divided into two classes- dominant and the dependent
classes. The dominant class in order to maintain its economic power designs a
new form of power- the political power.
b) State as an instrument of class exploitation- The dominant class uses the
machinery of the state to serve its own interests, that involve the exploitation
of the dependent class. State is an instrument of oppression and exploitation. It
also suppresses any class conflict. Policies in a Marxist State:-
1. Policies are made to serve the interests of few people, mainly the dominant
class.
2. Policies are usually coercive towards the lower and backward classes.
3. The policies will help in the development of particular classes.
4. The implementation of policies will require force.
5. Demands of lower classes will be suppressed, if necessary even by the use of
force.

Neo-Marxist Theory of State:-

It can be seen as a modification in some of the aspects of Marxism. The major
exponent of this theory was Antonio Gramsci.
This theory believed that it was not only the state that the bourgeoisie classes used
for the fulfillment of their interests, but also other aspects of ideologies, such as
education, religion and culture, etc., to propagate their own interests. All these,
ideologies, religion, culture, were designed and explained in such a way that they
fulfilled the interests of the bourgeoisie class.
The policies in such states try to take care of religion, culture, education, etc., to
fulfill the interests of the bourgeoisie class. The public policies are such designed
that all these spheres only create an influence of the dominant class and fulfill the
interests of bourgeoisie class.

Contemporary Marxist:-
Miliband and Poulantzan challenge the two class model of Marx. They stated that
even the bourgeoisie class consisted of different levels. And beyond the class
distinction of bourgeoisie and proletariats, there are further divisions also, like-
white-collar jobs, grey-collar jobs, blue-collar jobs and pink-collar jobs.
So they criticized the theory of Marxism.
The policies in such type of state-
i. Will serve the interests of business class, will also serve the vulnerable
sections, but only under the guidance of business class.
ii. Policies will keep in view the benefits of both opposing factors. This means
that the policies will be such designed that they will take care of the
interests of both the dominant class and the vulnerable class
iii. However, in reality, the policies in such states will only be nominally
formulated for the vulnerable sections, but under such policies also, the
benefit of business class will be kept in mind.

Political Economy and Policy

Political economy is the interaction of politics and economics. Politics, as we
know, deals with how decisions are made, by whom, on what basis and who has an
influence on those decisions.
Whereas, economics is that branch of social science, that deals with the ownership
and control over the means of production- land, labour and capital.
Political economy analysis helps us to understand the behaviour of the State. It tries
to explore the interaction of political and economic processes within a society. It
tries to find answers to questions such as, how policy makers acquire power, the
implications that they have for policy making, how economic aspects influence
policy making.
Political economy also deals with the fact that how economic outcomes affect the
relative wealth of different groups, with implications for the distribution of
political power and direction of policy in the future. The economic outcomes affect
the relative wealth of different groups. This influences the share of political power,
and having political power will affect the directions of the policy in future.
Political economy is concerned with how political forces influence the economy
and economic outcomes. Political economy has interest in both the political forces
and economic forces. It is economic activity that generates the resources that are
required to sustain political activity, eg., election campaigns. A policy can lead to
generation of benefits for certain economic activity and therefore can create a
particular constituency, who wants to maintain the economic activity because it is
beneficial.
Political economists very interested in who gains and who loses from a particular
policy. This provides important clues about which group wants the policies to be
continued and which group wants to withdraw the policies.
With the help of political economy analysis, it also uses the economic tools to
examine political phenomena. Using economic tools to examine political
phenomena.
Economics sees the individual as both self-seeking and rational. It is the study
about how rational individuals use the resources that are available to them- capital,
land, labour, etc, to maximize some utility function (eg.- maximizing functions
include earning profit, income and consumption) by producing goods and services
and participating in markets.
Political economy examines how such individuals maximize their utility by
participating in political activity. In it, they have capital and labour at their disposal
and how they influence political processes so as to generate policy outcomes that
benefit them.
There are many factors that shape the political behaviour-
1. Interests:- Those who have the ability to influence policies do so in such a
way as to further their own economic or political interests. Those who
influence the policies from outside, may have economic interests. Those who
influence the policies from inside, may have their own private economic
interests or political interests, mostly to remain in power.
2. Ideas:- Ideology also plays an important role in influencing the policies,
alongside the economic and political interests. When there are conclusions
relating to the policy options, as they are available, ideology and beliefs at as
the guiding light. It also shows that all policies are not made for self interest,
but there are some genuine policies that are framed.
3. Institutions:- They are the formal or informal rules of the game that shape
the human behaviour. The formal political rules are the constitutionally
validated rules, that define matters such as how leaders are chosen and how a
 new policy can be introduced. In informal sense, it’s is the practice about
how things are done in order to shape the outcomes.
Levels and Choices:-
The tools of political economy analysis are relevant to three levels-
• Micro level or country analysis:- this political economy analysis takes place
at the national level. It studies about how the big decisions are made and
who has the most influence on those decisions. For example, selection of
political leaders or allocation of budget. The most powerful interest groups-
whether industrial, social, ethnic, etc- have or are seen influencing or trying
to influence the decisions. The role of the interest groups in decision making
at the national level is seen.
• Sector level analysis:- this examines in depth the forces shaping policy
formation and decision making at the level of individual sector or industry.
The more prominent sector within an economy, will have British influence
on the decision making within the sector. In this form of analysis, questions
such as- who are the key stakeholders in the sector, to what extent is the
power vested in the hands of specific individual or groups, are asked. Which
sector has more influences on the policy decisions and how is that sector
having an impact on the economy, such questions are raised.
• Problem driven analysis:- this is a practical approach that starts from
vertically problem that needs solutions and proceeds to examine all forces
(actors and interests, ideas and institutions) that have bearing on it. The
World bank developed this approach to understand the situation was such
policies that were made in order to remove or reduce poverty seems to be
continually blocked.
Theories of State
Liberal Theory of State:-
Liberal theory talks about the freedom of individual and treats state as a necessary
evil. It believes that state shall be minimal, that means, the state shall have least
interference in the lives of individuals. It supports ‘laisse-faire individualism'.
Characteristics of the liberal theory of state:-
• State is not superior to other institutions.
• State’s role is to establish proper principles and not to interfere much.
• State’s power must be split and distributed and not concentrated and
centralized.
• State maintains neutrality.
Policies in a liberal state:-
i. People present their demands and state accordingly makes policies. ii. Policies
made are neutral, that is, that are not favorable to any particular group or
community.
iii. Policies are made only to facilitate and not to regulate. iv.
Policies must ensure equality.
v. Policy formulation includes all areas- developmental and non-developmental.

Neo-Liberal Theory of State:-

It talks about- rolling back of the State, limited State and also of a State that
facilitates liberalization, privatization and globalisation.
Policies in a Neo-Liberal state:-
i. Policies will facilitate the process of globalisation (free flow of goods, free
trade policies).
ii. Policies to facilitate privatization.
iii. Policies also to conserve one’s society and national development. iv.
Policies for economic development and economic protection.

Welfare Theory of State:-

It talks about the welfare state. It provides protection to the vulnerable sections and
work for their upliftment of these backward sections.
Policies in a welfare state:-
i. Policies provide solutions to social problems.
 ii. Policies provide protection to vulnerable sections.
iii. Policies are made to provide social security, social justice and equity, as
well as economic protection.
iv. It provides equality of opportunity.
v. Policies are based on collective demands and address the problems of
urbanization, environment, health and education.

Post-Colonial Theory of State:-

These were the new states that were created or established as free States from the
Colonial rule. Many problems existed in such states, like, underdevelopment,
poverty, unemployment, etc. The priority of the state was to solve these problems.
Policies in these states:-
i. Designed to facilitate the development of the state.
ii. Removal of inequalities. iii. Social welfare
policies. iv. Policies for particular groups.

Feminist State:-
It talks about equality of men and women, and about ending of all forms of
exploitation and oppression.
Policies in such states:-
i. Gender impartial policies. ii.
Promote equality
iii. Policies for women development and emancipation.
iv. Women specific policies, like policies for protection of rights, safety of
women.
v. Policies for girl child protection.

Policies in different Types of States:-

• Minimalist State:- State has a regulatory and non-developmental role. Public
policies in these states are facilitating with minimal regulations.
• Developmental State:- It allows private players in public sphere. State is
proactive in developmental activities. Public-private partnership is seen.
Public policies are detailed with clear explanation.
• Social Democratic State:- State focuses on equity instead of economy and
democratic methods are used to achieve it. Public policies are socially
oriented.
 • Collectivised State:- Private sector is side-lined in such states. Economic
planning and development is centralised and in State’s hand. Public policies
are largely centralised.
• Totalitarian State:- Every aspect of society is centralised and controlled by
the State like education, culture, religion, etc. Public policies are completely
made by the state and state performs all functions alone.

Interest Groups:-
Interest groups are an association of individuals or an organisation that are formally
organised on the basis of one or more shared concerns and those who attempt to
influence public policies and its favour. Interest groups share a desire to affect
government policies to benefit themselves or their causes. The goal of interest
groups is to demand for such a policy that exclusively benefits the group members
or any one segment of society or a policy that advances a broader public purpose.
The attempt to achieve its goal is made through the system of lobbying. It is an
attempt to bring pressure upon the policy makers to gain policy outcomes in the
favour.
Narrow outgrowth of communities having similar interests exist in all societies.
And accordingly there are narrow groups and broader groups found in a society.
Interest groups exist at all political systems, be it democratic, authoritarian or
totalitarian, etc., because interests are almost everywhere. Interest groups exist at
all levels of government- national, state, provincial and local and also at
international levels. Their forms and lobbying strategies may vary, but they exist in
all societies.

Types of interest groups:-

Interest groups can be categorised into five broad categories:-
1. Economic interest groups (business, labour, farmers, professionals)
2. Cause groups (for a cause, value-based, religious, veterans group, rights of
disabled, animal protection)
3. Public interest groups (issues of general public concern like environmental
protection, human rights, consumer rights)
4. Private and public institutional interest groups
5. Non associational groups (lack of formal organisation, spontaneous protest
movements in reaction to a particular policy or event)
Characteristics and importance of interest groups:-
1. Developed to promote programs or disseminate information, and not for
political purposes.
2. Activities are not political in nature.
3. Aggregating and representing the interests of groups of individuals. They
facilitate the government by providing policymakers wise information that is
essential for making laws and educating the members on issues.
4. Sometimes they provide financial support to election campaigns.
The various factors that shape interest groups include the environment of the state,
i.e., the socio economic development, political system and political culture.

Interest groups and public policies:-

Steven Lukes in his article, “Power: A Radical View” (1974), has mentioned about
three faces of power-
• Power through decision making (who takes the decision)
• Power through agenda setting (who sets the agenda)
• Power through domination (who manipulates the decisions)
The policy process involves all these three stages. In policy process, the decisions
are made, agenda is set and the preferences of individuals are shaped. All these
require the use of power, because power is the capacity to influence others. And
interest groups try to have an influence on policy process in all these three areas-
• They try to influence the decision making
• They influence the agenda setting of the government, and see to it what
issues must be included in government agenda.
• They try to shape the preferences of others and manipulate them to adopt
and agree to some views.
Therefore interest groups have an important role to play in public policy process.

Social Movements:-
A social movement may be defined as an organized effort by a large number of
people to bring about or impede social, political, economic, or cultural change.
Defined in this way, social movements might sound similar to special-interest
groups, and they do have some things in common. But a major difference between
social movements and special-interest groups lies in the nature of their actions.
Special-interest groups normally work within the system via conventional political
activities such as lobbying and election campaigning. In contrast, social
movements often work outside the system by engaging in various kinds of protest,
including demonstrations, picket lines, sit-ins, and sometimes outright violence.
Types of Social Movements:-
Several types of social movements can be identified according to the nature and
extent of the change they seek. This typology helps us to understand the differences
among the many kinds of social movements that existed in the past and continue to
exist today.
One of the most common and important types of social movements is the reform
movement, which seeks limited, though still significant, changes in some aspect of
a nation’s political, economic, or social systems. It does not try to overthrow the
existing government but rather works to improve conditions within the existing
regime. Some of the most important social movements in U.S. history have been
reform movements. These include the abolitionist movement preceding the Civil
War, the women’s suffrage movement that followed the Civil War, the labor
movement, the Southern civil rights movement, the Vietnam era’s antiwar
movement, the contemporary women’s movement, the gay rights movement, and
the environmental movement.
A revolutionary movement goes one large step further than a reform movement in
seeking to overthrow the existing government and to bring about a new one and
even a new way of life. Revolutionary movements were common in the past and
were responsible for the world’s great revolutions in Russia, China, and several
other nations. Reform and revolutionary movements are often referred to as
political movements because the changes they seek are political in nature.
Another type of political movement is the reactionary movement, so named
because it tries to block social change or to reverse social changes that have
already been achieved.
For social movements to arise, certain political, economic, or other problems must
first exist that prompt people to be dissatisfied enough to begin and join a social
movement. These problems might include a degrading economy, lack of political
freedom, certain foreign policies carried out by a government, or discrimination
based on gender, race and ethnicity, or sexual orientation.
Whatever the condition may be, the dissatisfaction it generates leads to shared
discontent (also called shared grievances) among some or most of the population
that then may give rise to a social movement. This discontent arises in part because
people feel deprived relative to some other group or to some ideal state they have
not reached.
Summary: Political Economy and
Policy
Interest Groups and Public Policy:-
Interest groups have a close relationship with public policy. These groups exercise
influence on the policy makers to formulate such policies from which they get
maximum benefit. Whatever be the nature of State- totalitarian, dictatorial or
democratic- the interest groups role in public policy cannot be minimized. The
efforts of these groups are directed towards limited values, goals and objectives. In
order to support their viewpoints, the groups collect and provide data to the
policymakers. On the basis of the information provided, the policy formulators, if
they feel convinced, go ahead. In India, as in most other third world countries,
government has a crucial role in social and economic development. And therefore,
public policy has the most pervasive influence in the formulation of development
goals and priorities.
The principal concern of interest groups is to influence the governmental process in
order to ensure public policy-making in keeping with their special interests.

Interest Groups and Policy Making:-

Interest groups occupy a place of significance in the process of policy making.
These play an important role in every political set-up. The present age is an age of
competition and number of interest groups are in operation in different
environments. For getting the desired ends, which strengthen their base, the interest
groups cannot take the issues at hand in a non-serious manner. They actively make
efforts in the directions they have kept before them. An organized interest group
claims to represent not only those who are potentially it’s members, but also all
those who by virtue of some common characteristics ho along with the ends
pursued by the groups.
The evolution of India’s political economy has mobilised various interest groups
and led to complexities of connections between the mobilised groups and the
mainstream political parties. The nature and dimension of electoral politics we
have in India, emphasize the need for both mobilisation of funds and local votes by
the political parties for winning. The support of the interest groups is necessary in
both the endeavours. Such support has recently been felt very important in view of
the fact that most of the mainstream political parties have ceased to have active
grassroots organizational limbs, and moreover, election expenses have increased
enormously.
Some of the interest groups such as chambers of commerce, provide the bulk of
finance for the major political parties, while groups like farmers’, associations
mobilise local electoral support for the parties. In return, these groups assert their
role in public policy-making. While, on the one hand, new political elites have
emerged in the rural areas in the wake of the agricultural growth several important
urban lobbies, such as the industrial capitalists and public bureaucracies, have
significantly influenced public policy-making. State policies increasingly “have
come to reflect the interests of the dominant classes”. In the early years all the
major interest groups prospered in the process of economic growth. The new rural
elites have set up significant interest groups in various parts of the country. There
are several such agricultural interest groups, the most conspicious of which are in
Punjab, Uttar Pradesh, Maharashtra and Karnataka.

Social Movements and Policy Making:-

• Social movements do have an impact on the public policy process. The
impact can be direct or indirect.
• Social movements highlight the urgency of a public policy issue.
• The most important and significant contribution is to the political field, by
bringing together a large number of people to speak up on one issue, and
demand an immediate resolution to the problem at hand.
• Social movements take place in order to bring changes or to avoid changes
and maintain the status quo. They organize and formulate public opinions
and mobilise people and put pressure upon the Government to formulate
certain public policies. They can either be for particular group or for the
society as a whole.
• Social movements are a better way to put forward the issues before the
government that are of urgent nature and require immediate action.
• Since social movements mobilise a large group of people, they have an
impact on policy-makers, as the demands are highlighted and draw attention
of a larger mass towards the issues.
• For eg., The environmental social movements help in drawing the attention
of the government towards the crucial and critical environmental issues, and
there are certain environmental policies that have taken shape after these
social movements took place.
Economic Liberalization:-
Economic liberalisation encompasses the process, including government policies,
that promote free trade, deregulation, elimination of subsidies, price controls and
rationing systems, and often, the downsizing or privatization of public services.
The process of economic liberalisation in India was started with the presentation of
union budget on 24th July, 1991. It was done through the New Economic Policy.
New Economic Policy refers to economic liberalisation or relaxation in the import
tariffs, deregulation of markets or opening the markets for private and foreign
players, and reduction of taxes to expand the economic wings of the country.
Former Prime Minister Manmohan Singh is considered to be the father of New
Economic Policy (NEP) of India. Manmohan Singh introduced the NEP on July
24,1991.
Main Objectives of New Economic Policy, 1991
The main objectives behind the launching of the New Economic policy (NEP) in
1991 by the union Finance Minister Dr. Manmohan Singh are stated as follows:
1. The main objective was to plunge Indian Economy in to the arena of
globalization and to give it a new thrust on market orientation.
2. The NEP intended to bring down the rate of inflation.
3. It intended to move towards higher economic growth rate and to build
sufficient foreign exchange reserves.
4. It wanted to achieve economic stabilization and to convert the economy into
a market economy by removing all kinds of un-necessary restrictions.
5. It wanted to permit the international flow of goods, services, capital, human
resources and technology, without many restrictions.
6. It wanted to increase the participation of private players in the all sectors of
the economy. That is why the reserved numbers of sectors for government
were reduced.
Beginning with mid-1991, the govt. has made some radical changes in its policies
related to foreign trade, Foreign Direct Investment, exchange rate, industry, fiscal
discipline etc. The various elements, when put together, constitute an economic
policy which marks a big departure from what has gone before.
The thrust of the New Economic Policy has been towards creating a more
competitive environment in the economy as a means to improving the productivity
and efficiency of the system. This was to be achieved by removing the barriers to
entry and the restrictions on the growth of firms.
The seven important features of new economic policies under economic reforms of
1991 are:-
(1) Liberalisation, (2) Privatisation, (3) Globalisation of the Economy, (4) New
Public Sector Policy, (5) Modernisation, (6) Financial Reforms, and (7) Fiscal
Reforms.
1. Liberalisation: The new economic policy has made provision for liberalizing
the economy against unnecessary controls and regulations. Here the
Liberalisation simply indicates liberating the trade and industry from
unwanted restrictions. In order to liberalize the economy and to bring
transparency in the policy, the New Industrial Policy, 1991 has abolished the
system of industrial licensing for all industrial undertaking, irrespective of
the level of investment, except for a short list of 18 industries related to
security and strategic concern, social reasons, hazardous chemicals and
overriding environmental concerns and items of elitist consumption.
The New Industrial Policy has liberalized the industries in the following
manner:
a. All other industries, excepting 18 industries, are delicensed and allowed
to set up and sell shares without any restriction;
b. Industries are allowed to expand their capacity freely as per the needs of
the market;
c. Producers are allowed to produce any commodity or diversify their
output as per the demand in the market
d. MRTP companies (having investment beyond Rs. 100 crore) are now no
longer required to go for pre-entry of investment decisions and they are
now allowed to expand their size.
e. In 1996-97, the policy of industrial reforms has enhanced the investment
ceilings in plant and machinery for small scale industries (SSI) and
ancillary units from Rs. 60 lakh and Rs. 75 lakh respectively to Rs. 3
crore and that for the tiny sector has also been raised from Rs. 5 lakh to
Rs. 25 lakh;
f. Industries have been set free to buy foreign exchange from open market
and also to make necessary imports. The aforesaid measures have
liberalized the industries to take prompt decisions so as to raise their
efficiency in production and to face open competition in the market.

2. Privatization: Another important feature of New Economic Policy is the

promotion of the policy of privatisation. Here the word privatisation means
introduction of private ownership in publicly owned and managed
enterprises and also signifies introduction of private control and
management in public sector enterprises. Under the policy of economic
 reforms private sector has been allowed to play a major role in respect of
economic activities.
The privatisation programme of the economic reforms includes:
a. Reducing the number of industries reserved for the public sector from
17 to 8;
b. Raising the share of private sector to total investment to 55 per cent at
the end of Eighth Plan;
c. Selling the government equity holdings of public sector enterprises
among the workers and public for greater participation of private
individuals;
d. Institutional credit support, to private sector enterprises from the
national financial institutions. Thus this privatisation move is
expected to raise the efficiency and productivity of the private sector.
3. Globalisation of the Economy: By the term globalisation we mean
opening up of the economy for world market by attaining international
competitiveness. Thus the globalisation of the economy simply indicates
interaction of the country relating to production, trading and financial
transactions with the developed industrialized countries of the world.
Globalisation of the economy offers both challenges and opportunities to the
developing countries. While facing the trend of globalisation, the developing
countries are preparing themselves to face the challenge of international
competitiveness. With the introduction of new economic policy, Indian
economy has accepted the challenge of facing globalisation of the economy.
Globalisation of the Indian economy has made the following changes:
a. New Economic Policy (1991) has prepared a specified list of high
technology and high investment priority industries (Annexure III) in
which automatic permission will be available for foreign direct
investment up to 51 per cent of foreign equity.
b. In respect of foreign technology agreements, automatic permission is
provided in high priority industry up to a sum of Rs. 1 crore. No
permission is now required for hiring foreign technicians or for testing
indigenously developed technology abroad.
c. In order to make international adjustment of Indian currency, rupee
was devalued in July 1991 by nearly 20 per cent which also stimulated
exports, discouraged imports and raised the influx of foreign capital.
d. In order to make an inevitable move for the expeditious integration of
Indian economy with that of the world, the Union Budget 1992-93 has
made Indian rupee partially convertible and then the rupee was made
fully convertible in 1993-94 budget. Accordingly, in March 1993, the
Government introduced a fully unified market determined exchange
rate system. Thus a major step towards current account convertibility
 was taken by India in March 1993 when the foreign exchange budget
was abolished, the exchange rate was unified and transactions on trade
account were freed from exchange control. Capital account
convertibility is now being targeted.
e. A new five year export-import policy, 1992-97 was announced by the
Government on March 31, 1992. The main objectives of the new
policy are to establish the framework of globalisation of India’s
foreign trade, to promote productivity, modernisation and
competitiveness of Indian industry and thereby to enhance its export
capabilities and also to simplify and streamline the procedures
governing exports and imports.
f. The policy removed all restrictions and controls on the external trade
and market forces are allowed to play a greater role in respect of
exports and imports. Again on August 31, 2002, a new Foreign Trade
Policy 2004-09 was announced which has simplified the trade
practices further for improving our competitiveness in the global
market.
g. In order to bring the Indian economy within the ambit of global
competition, the government has modified the customs duty to a
considerable extent. Accordingly, the peak rate of customs duty has
been reduced from 250 per cent to 10.0 per cent in 2007-2008 budget.
h. In order to increase the flow of foreign investment and technology the
Government has taken several measures like:
I. Granting foreign technical collaborations of high priority industries,
II. Freedom to import foreign technology by private entrepreneurs and
also to test indigenous technology abroad,
III. Establishing Foreign Investment Promotion Board (FIPB) for
finalizing foreign investment and collaboration proposals and IV.
Offering concessions to FERA/FEMA companies.
In order to meet the international competitiveness, the Government has taken
various steps for correcting its balance of payments deficit and also to increase the
share of India in international trade.
Although India is possessing a large domestic market, broad based industrial and
infrastructural sectors, abundant supply of cheap labour, a huge number of
educated and trained manpower and adequate natural resources to attain
competitiveness but the country remains far behind many other Asian countries like
Singapore, Malaysia, Korea, Hong Kong, Indonesia, Taiwan and Thailand. India’s
share in the world market is as poor as 0.6 per cent.
In order to achieve success in the path of globalisation. Indian producers should
improve there competitiveness. This requires attainment of higher growth in
productivity, improved quality products and innovations in products and process
technology. In order to attain international competitiveness, companies will have to
enter into strategic alliances and collaborations in order to bring in state-of-the-art
technology for reducing cost, improve efficiency and to penetrate and capture
global markets with joint efforts.
4. New Public Sector Policy: Another important feature of new economic
policy is its change in public sector policy. The new policy has shifted its
emphasis from public to private sector.
The Industrial Policy has undertaken the following four major policy decisions in
respect of public sector:
• Reduction in the list of industries reserved for the public sector from 17
to 8 and introducing selective competition in the reserved areas.
• Disinvestment of shares in PSEs to raise resources and encourage wider
participation of general public and workers in the ownership of PSEs.
• Policy for sick PSEs be designed at par with that of the private sector.
Sick PSEs which are unlikely to turn around will be referred to BIFR for
formulation of revival schemes.
• Improving performance through the performance
contract or Memorandum of Understanding (MOU) system by
which Managements are to be granted greater autonomy and held
accountable for results.
5. Modernisation: The New Economic Policy has been providing high priority
to the introduction of modern techniques in production system. The policy
facilitates the growth of sunrise industries, i.e. electronics and computers. In
order to introduce better and improved technology, the government is
permitting all foreign collaboration proposals related to the import of high
technology.
The 1999-2000 Budget also made special provision of tax initiatives to facilitate
corporate mergers and collaborations to face the new challenges ahead. Private
entrepreneurs are now free to finalise the terms of such collaborations in their own
term. Development of indigenous technology is also being encouraged. Private
companies are also encouraged to develop their own Research and Development
(R&D) centres through tax concessions.
Steps have also been taken for the modernisation of the age-old steel, textile, jute,
sugar, leather industries having rich potential. This is important for attaining self
reliance and also for cost reduction and the production of high quality goods
required for both internal consumption and exports. Steps have also been taken for
the revival and modernisation of sick industrial units established both under public
and private sectors.
 6. Financial Reforms: As per the recommendations of the Narasimham
Committee the Government has undertaken various measures for the reform
of the financial sector.
These include:
(i) Reduction in liquidity ratio,
(ii) Abolition of direct credit programmes,
(iii) Free determination of interest rates,
(iv) Necessary improvement in the banking accounting system,
(v) Making provision for Non-performing assets (NPAs),
(vi) Establishing speedy recovery of loans by special tribunals,
(vii) Reconstitution of banking system for the establishment of a few banks of
international standard, national banks, local banks, rural banks, private
sector banks etc.,
(viii) Liberal treatment to foreign banks;
(ix) Abolition of branch licensing system,
(x) Giving more freedom to banks and ending dual control of RBI and
Finance Ministry
(xi) Reform of the financial institutions consisting financing companies,
merchant banks, mutual funds etc. and (xii) Introducing capital market
reforms.

7. Fiscal Reforms: Another important feature of New Economic Policy is to

introduce fiscal policy reforms. The Government initiated various fiscal
measures in order to reduce the fiscal deficit from 8.4 per cent of GDP in
1990-91 to 5.0 per cent in 1996-97 and then to 4.4 per cent in 1999- 2000.
In order to achieve the target the Government has introduced various
controls over public expenditure and took initiative to raise its both tax.
Seven Elements of Economic Policy of Liberalization:-
The seven major elements of economic policy of Liberalisation in India. The
elements are: 1. Deregulation of Industries 2. Amendments in MRTP Act 3.
Reforms in Foreign Exchange Management 4. Financial Sector Liberalization 5.
Foreign Investment 6. Foreign Technology 7. Public Sector Policy.
Deregulation of Industries: The government removed the industrial licensing
requirement from all industries except for a short list of 18 industries. Except for
these 18 industries mentioned in the list, all other industries, irrespective of how
big investment is involved, have been freed from the provisions of compulsory
licensing.
The exemption from licensing will be particularly helpful to many dynamic small
and medium entrepreneurs; who have been unnecessarily hampered by the
licensing system.
Amendments in MRTP (Monopolies and Restrictive Trade Practices) Act:
With a view to ensuring higher productivity and competitive advantage in the
international market; the interference of the Government through MRTP was
restricted.
There would now be no need for the firms covered under MRTP, to obtain prior
approval of the government for establishment of new undertakings, mergers and
amalgamations, expansion of operations and appointment of certain directors. In
fact, the new industrial policy unshackled many of the provisions which acted as
brakes on the growth of large private corporate sector.
The Central Government has enacted a new law, the Competition Act, 2002, for
upholding competition in the Indian market.
Reforms in Foreign Exchange Management:
The Central Government has abolished FERA (Foreign Exchange Regulation Act)
and enacted FEMA (Foreign Exchange Management Act). Under the liberalized
exchange management system, value of rupee is determined by the market forces
of demand and supply.
Exporters are free to sell their foreign currency in the open market; while the
importers can freely buy it from the market. This is called free convertibility of
rupee.
Financial Sector Liberalization:
Some of the measures indicating financial sector liberalisation are:
(i) Restrictions on operations of foreign banks were eased and new ones
were allowed to enter.
(ii) There has been liberalisation of the regulations with respect to listing of
companies on the stock exchanges.
(iii) New private banks were allowed operations, infusing competition into
the financial system.
(iv) Case reserve ratio and statutory liquidity ratio have been brought down in
stages, giving the bank an increased capacity to create credit.
(v) Banks and non-banking financial companies have been permitted to enter
the insurance business.
(vi) Liberalisation of rates of interest i.e. these are to be determined by the
free play of the forces of demand and supply, and not by the decision of
the RBI (Reserve Bank of India).
Foreign Investment:
Earlier maximum limit of foreign equity participation was 40% for industrial units
open to foreign investment.
Under the new economic liberalisation policy, the following concessions were
allowed:
(i) Foreign equity participation was raised to 51% for 34 high priority
industries.
(ii) Government also added another list of 9 industries for which automatic
approval up to 74% would be allowed.
(iii) 100% foreign equity is permitted in cases of mining; projects for
electricity generation, transmission and distribution; ports; harbours; oil
refining; all manufacturing activities in SEZs (Special Economic Zones)
and some activities in telecom sector.

The UPA Government on 31st August, 2004 announced a new scheme to establish
Free Trade and Warehousing Zones (FTWZs); wherein 100% FDI is permitted for
establishment of zones and their infrastructural facilities.
Foreign Technology:
Before 1991, technology agreements by an Indian company with foreign parties for
import of technology required advance clearance from the government. However,
the Government realized that in the fast changing world of technology, the
relationship between suppliers and users of technology must be a continuous one.
The Government will provide automatic approval for technology agreements
related to high priority industries within specified parameters. Indian companies
will be free to negotiate the terms of technology transfer with their foreign
counterparts, according to their own commercial judgement.
Public Sector Policy:
Public sector has shown a very low rate of return on capital invested. Most of
public sector enterprises have become a burden rather than being an asset to the
nation. New industrial policy, 1991, has classified public sector units into three
categories:
(i) Those which fall in the reserved area of operation or are in the high
priority areas or are generating good profits. These units should be
strengthened.
 (ii) Those which may be faltering (becoming weaker) at present but are
potentially viable; must be reconstructed.
(iii) Those which are chronically sick and incur heavy losses must be closed
down or their ownership passed on to the private sector.
Conclusion:-
The liberalisation was aimed at ending the licence-permit raj by decreasing the
government intervention in the business, thereby pushing economic growth
through reforms. The policy opened up the country to global economy. It
discouraged public sector monopoly and paved the way for competition in the
market.
The policy, which met with wide opposition from within the Congress and even the
domestic industry, was seen as the only way out for India after the balance of
payments crisis that brought the country to its knees. However, after the Congress
government under PV Narasimha Rao managed to overcome all the opposition and
push through the reforms, successive governments too devised similar policies to
slowly and surely shed a Nehruvian legacy. The critical analysis of economic
liberalisation:-
1. Gross domestic product: The size of the economy can often give the first
impression of the might of a country. GDP gives the total worth of the goods and
services produced in a country in one particular year. India’s GDP stood at Rs
5,86,212 crore in 1991. About 25 years later, it stands at Rs 1,35,76,086 crore, up
2216 percent. In dollar terms, India’s GDP crossed the $2 trillion mark in 2015-16.
Currently, the country is ranked ninth in the world in terms of nominal GDP. India
is tipped to be the second largest economy in the world by 2050.Once admonished
for its low rate of economic growth, post-reforms, India remained the second
fastest growing economy in the world, behind China until 2015. Especially,
between 2005 and 2008, the economy clocked the 9% mark annually. With the
NDA government revising the GDP growth figures and China slowing down, India
is now being billed as the fastest growing major economy in the world, with a
growth rate of 7.6% in 2015-16.
2. Foreign direct investment: Before 1991, foreign investment was negligible.
The first year of reform saw a total foreign investment of only $74 million.
However, investments have steadily risen since then, except for occasional blips
between 1997 and 2000 and 2008 and 2012 – owing to the global economic
slowdown. As of 31 March 2016, the country had received total FDI of $371
billion, since 1991. The year 2008 recorded the highest FDI inflow of $43.40
billion. The biggest spurt in inflow was between 2005 and 2006 – 175.54%. As of
March 2016, India had attracted $10.55 billion worth of FDI. In 2015, India
received $63 billion (nearly Rs 4.19 lakh crore) and replaced China as the top FDI
destination, according to The Financial Times.
3. Foreign exchange reserves (Forex): It was India’s dismal state of forex
reserves that forced the government to bring in economic reforms. Now, 25 years
later, forex reserves are at a record high. In 1991, it stood at just $5.8 billion. As of
24 June, the country’s forex reserves are at $360.8 billion. Usually, import
coverage of 7-8 months is considered sufficient. The biggest jump in reserves was
witnessed between 2007 and 2008 when the forex grew to 55% to hit $309.2
billion.
4. External debt: As the economy expanded so did the country’s external debt
as companies started borrowing from the overseas markets to fund their growth. In
1991, the country’s external debt stood at $83.8 billion. The rise has been steady
with the figure in December 2015 hitting $480.2 billion. Though the figure looks
huge, as a percentage of GDP the external debt has declined. In 1991-92, external
debt as a percentage of GDP stood at 38%. The corresponding figure in 2015 is just
about 24%. Between 2007 and 2008, external debt rose by more than 30% which is
the steepest rise in the last 25 years.
5. Foreign institutional investment: Unlike FDI, FII investment is not for long
term and is sensitive to domestic and international volatility. FII inflows and
outflows may often reflect a nation’s economic and political stability. In 1992-93,
FII inflow stood at a meagre $4.2 million. By 1994-95, the figure had risen to
$2.43 billion. However, there was a net outflow of $386 million for the first time in
199899. The reason for this may be the political instability and the Kargil War.
Another major outflow was recorded in 2008-09 – $9.83 billion – during the global
financial crisis. FII inflow rose to $45.69 billion in 2014-15 from $8.87 billion in
2013-14, a 414 percent spike in just one year. In 2015-16, however, there was a net
FII outflow of $2.53 billion.
6. Sensex: Though only around small fraction of the Indian population plays in
the share market, the ups and downs in the Sensex reflect the prevalent economic
and political scenario in the country. The 30-share index was lingering around the
1000-level in 1991 before crossing the 4,000 mark the next year. However, the
Harshad Mehta scam brought about a downturn, with markets ending 1992-93
below the 4,000 mark. The Sensex reached the high point of 15,644 by the end of
2007-08, but fell 38 percent to 9,708.50 points by the end of 2008-09. Since then,
the Sensex has risen steadily to reach 25,341.86 points by the end of FY 16.
7. Per capita income: Per capita income is the average income of every citizen
arrived at by dividing the GDP by the country’s population. Though purely a
statistical exercise which may not necessarily show the true picture of a country’s
development, nevertheless the data makes for an interesting read. Between 1991
and 2016, per capita income rose from Rs 6,270 to Rs 93,293. This is a whopping
1388 percent jump. However, there’s nothing to be euphoric about the number. As
RBI governor Raghuram Rajan says, with this number we are nowhere near ending
poverty. “...We are still a $1,500 per capita economy. All the way from $1,500 per
capita to $50,000, which is where Singapore is, there is a lot of things to do. We
are still a relatively poor economy and to wipe the tear from every eye, one would
at least want to be middle-income around $6,000-7,000 which, if reasonably
distributed, will have dealt with extreme poverty. And that is two decades worth of
work to be even moderately satisfied,” he said in an interview to The Times of
India.
8. Purchasing power parity: Purchasing power parity (PPP) gives a
comprehensive idea on the standard of living and the cost of living in a particular
country. When per capita income of Indians is calculated in terms of PPP, the
standard of living has improved for sure. However, the cost of living has risen too.
In 1991, per capita PPP was $1,173. In 2014, it rose nearly five-fold to $5,701.
Nevertheless, when compared with developed countries, India’s standard of living
as well as cost of living is quite low.
9. Share of agriculture, industry and services in GDP: The post-reform period
shows the gradual decline in the agriculture sector’s contribution to the Indian
economy. India’s traditional occupation, agriculture now contributes only about
15% to the GDP, down from 29 percent in 1991. The services sector has taken the
lead role in propelling the economy at the global stage. The IT sector has been the
torchbearer of the service sector in India. Currently, it contributes around 53
percent to the national economy. In the meanwhile, the industrial sector has
undergone marginal growth in the last 25 years.
10. Power generation and consumption: Electricity consumption is a proxy for
growth. As a country prospers economically, its power consumption increases too.
This has been the case with developed countries such as the US. Post-reforms,
percapita power consumption in India has increased each year. Cumulatively, there
has been about 162 percent growth between 1990-91 and 2012-13 – from 291.8
KWh to 765 KWh.
11. Labour force and employment: The labour force in India currently stands at
49.7 crores. In 1991, it stood at 33.7 crores. More or less two-fifth of population is
part of the labour force. The most important fact is that the decline in
unemployment rate over the last 25 years is only marginal – from 4.3% in 1991 to
3.6% in 2014. The sectoral composition of labour has witnessed a notable change.
The agriculture sector, which is considered India’s backbone, now employs less
than 50% of the labour force, while industrial and service sectors have marginally
surged ahead.
12. Car sales: With the increase in per capita income, the prosperity of the
middle class has also increased for sure. What else describes the rise in car sales in
the country. In 1991-92, just over 2 lakh cars were sold. The figure rose to 3,
12,000 by March 1995. The sales crossed the one million mark in 2003-04. The
latest figures show that about 20.3 lakh cars were sold by the end of 2015.
13. Telecommunication: The telecom revolution in India can be called the
biggest legacy of the post-1991 economy. Telephone, especially wireless,
subscription has witnessed exponential growth since the dawn of this century.
Telephone connections steadily rose in the initial few years, but could never match
the rapid rise of SIM-based mobile subscriptions. In the last eight years, the
number of telephone connections has been dipping marginally. Mobile phones
have revolutionized the way Indians communicate. In the last 15 years, wireless
subscription has grown by a whopping 28,611 percent. As of March 2016, there are
more than 103 crore mobile subscribers in the country. Currently, India is the
second largest mobile subscribers in the world after China.
Economic reform is a continuing process and not a one-time action. The present
NDA government – which recently opened the defence and aviation sector for 100
percent foreign investment – is carrying forward the legacy of the 1991 reforms.
With China slowing down, US slowly losing its clout, and the EU weakening, the
Indian economy seems better placed to reach new heights.

Recent Developments:-
India is a country full of paradoxes. The elite in the country are forward-looking;
they emphasize the need for reskilling but they conduct all this with
backwardlooking institutions. An acute observer once said: "we want to be a
knowledge economy without reflecting on the demands of a knowledge society. As
a result, we lack the institutions to be systematically innovative and our policies
seem short run and erratic. We are being outfought and out-thought in the realm of
knowledge and policy, while confusing rhetorical victories for real time gains."
In fact, our new regime talks of the demise of the Planning Commission as a
feather in its cap. It conflates the existence of the Planning Commission with the
ideology of the previous regime and treats it merely as a policy issue. Today, our
medical and our environmental policies, for example, are in a shambles, and yet
there are no relevant spaces to debate them. We are a tangled, regulatory society
without being "socialist" in terms of justice, which we set out to be.
Confusion over distinctions
Our knowledge society does not differentiate between information and knowledge.
Knowledge is embodied, epistemic, and has tacit elements. By confusing
information and knowledge, we lack critical thinking. Central to such confusion is
Sam Pitroda's Knowledge Commission report of 2006 which equated the
knowledge revolution to the information revolution and confused technology with
epistemology.
In fact, the elite in India do not realize that of the four revolutions of the 20th
century, in Quantum physics, Genetics, in Linguistics and in Knowledge, the last
two bypassed us. The profound Linguistic revolution had no impact in India
despite the fact that an exceptional linguist like Ferdinand de Saussure was a
professor of Sanskrit at Geneva in the same period. While the footprints of the
Quantum revolution appeared in India well after World War II, the knowledge
revolution led by Gregory Bateson, Thomas Kuhn and Claude Levi Strauss never
excited us.
Contemporary India, in that sense, was never sensitive to the genealogies of
knowledge. We boasted of the Planning Commission and the Knowledge
Commission, of the D.S. Kothari Commission but saw education and knowledge in
instrumental terms. To add to our problems, we misread the managerial revolution
and the debates on governance and democracy. We revamped a few commerce
departments and believed that we had reinvented management. But our Indian
Institutes of Management (IIM) had little research sensitivity. We consumed
knowledge but we rarely added creatively to the stockpile. India became a
consumer of knowledge rather than a translator or an inventor of knowledge
systems.
Knowledge and power
This background is necessary to understand the new relations between knowledge
and power. Linking the two is the field called policy. It also creates two kinds of
intellectuals, the policy intellectual and the public intellectual.
The distinction is critical. The policy intellectual serves as an extension of the state.
He/she is more a product of think tanks, of groups which strictly cater to policy
interests of the state or of corporations. A public intellectual is a figure who
provides a wide-ranging critique of policy, and looks more creatively at the relation
between knowledge and power. A knowledge society needs both sets of
intellectuals. The late Sukhamoy Chakravarty, the economist, was a great policy
intellectual. Ashis Nandy, Rajni Kothari and U.R. Ananthamurthy belong to the
category of public intellectuals. The policy intellectual usually takes his expertise
for granted. The public intellectual questions the nature of expertise, probing
deeper into the ethics and genealogy of ideas. In the post-liberalisation period,
India has had more policy than public intellectuals with think tanks like the Centre
for Policy Research and the Observer Research Foundation dominating the scene.
The think tanks and their attempts to formulate policy raise the whole question of
the relation between knowledge and the public sphere. Policy formulation has not
really articulated the views of the public sphere. In fact, the first challenges to
policy came from the social movements, and from civil society which identified
policy and experts as mere extensions to the state. The movements that grew
around the Bhopal gas tragedy, the Narmada dam; the narratives of displacement
and dispossession raised deep questions about policy and expertise, and about the
public consumption of policy. Governance is now seen no longer as a statist
exercise and the question of governmentality involves civil society articulating new
epistemologies, notions of citizenship, ideas about the democratisation of
knowledge and the assessment of public policy impacts. Governance has become
tied to democracy, with the public sphere becoming crucial and public policy a
critical field.
Field of the future
Public policy is not its impoverished, mechanistic cousin, Public Administration.
Jawaharlal Nehru started the Indian Institute of Public Administration on the basis
of the Paul Appleby report. Public policy became that empty space between
management and public administration. It had a different texture and different
requirements. Management schools in India have never succeeded in establishing a
successful school of public policy as all efforts have become annexes of
departments of economics.
Public administration is more a monument to the bureaucratic ego in India than to
administrative reflexivity. As experiments, public policy has never succeeded, and
yet today is a fast growing field with new departments at various institutions and
universities. So far, it is a case of necessity not generating adequate inventiveness
in our institutions. Yet, public policy is one of the fields of the future, linking as it
does, new notions of empowerment in democracy with new ideas of knowledge in
policy.
What makes public policy exciting, protean and potentially inventive is the
contested nature of the public sphere. It is anchored in a diversity of perspectives
which challenges the dominance of one subject. For example, economics, which
was almost a canonical discipline, now realises that it confronts a new commons of
social sciences which sees its sense of measure as inadequate to understand
freedom or suffering. The new developments in feminism, cultural studies, future
studies and science studies have added an increasing plurality to the fields of
knowledge. Today, the relation between the 'expert' and the 'citizen' has changed
and new forms of knowledge have to be considered. One sees this particularly in
the development of ecological policy.
Nature which was once taken for granted or seen as passive in the realm of
knowledge is now becoming a part of the social contract. The problems of climate
change, and the energy crisis have revealed that science and economics are
inadequate to answer questions related to ecology. Revolutions in ecology show
that panarchy, complexity and risk had created a non-Promethean science where
policy is merely prudent and precautionary. The subject of ethics has made a big
return into the making of these disciplines. A subject-wise understanding in terms
of the old hierarchies of knowledge is inadequate for policy. We are looking for
new modes of knowledge which are intercultural, interdisciplinary and holistic.
The emphasis is now on emergence rather than certainty.
New demands of democracy
These revolutions in knowledge have been catalysed by the new demands of
democracy. Democracy is no more a passive exercise of citizenship reduced only to
the exercise of periodic elections. Today, democracy is more proactive. The citizen
knows more and demands more. She is ready to challenge the dominance of the
expert. She senses that her active role is required to sustain a society. The public
sphere today is more dynamic and contested.
One senses the excitement and the choices before India in the issues confronting
us.
In the 1950s, India treated nuclear energy as sacrosanct. Today, the fishermen of
Kudankulam in Tamil Nadu, and the tribals and villagers in Maharashtra, Rajasthan
and Gujarat are challenging the location of nuclear plants and even the feasibility
of nuclear energy.
One sees similar debate on the future of biotechnology, for example on the need for
Genetically Modified (GM) crops. For the first time, one saw an Environment
Minister invite all stakeholders to a debate when in 2010, Mr. Jairam Ramesh of
the Congress called for public consultations on the release of Bt brinjal. It was
wonderful to watch the public sphere debating public policy on biotechnology.
The recent debates around growth, development and the fate of forests and the
future of mining have also raised issues that public policy must answer. The new
generation has to ask itself whether nature has rights: for example does a mountain
have legal standing? When a tribal says that when a mountain dies, a myth dies,
how does one translate his language into the dialects of policy? Recently, there was
a report on the death of a waterfall. How does one analyse the death of a 'myth'
through costs and benefits? Is a waterfall only about cusecs of water?
Similarly, the city raises its own seedbed of questions around the informal
economy, the future of waste, issues of violence — all of which confront the
policymaker. Ethics, science, suffering and philosophy cannot be ignored in any
debate today. A student has to reach into the best of the academe to answer the new
challenges to citizenship. One has to dream of futures in realistic terms going
beyond the simplicity of smart cities to ask what urban space and urban
imagination are.
Today, at a time when the university is in crisis, and the relevance of academics is
in question, subjects such as public policy can revitalise the university, intensify
the debates around intellectual life and show that the life of the public mind has
new challenges. A subject like public policy is an invitation to construct a feasible
future. It will be interesting to see how many Indians accept its challenge and
construct the dream of a different India.

Ideology and Policy: Nehruvian Vision,

Economic Liberalization and Recent
Developments
Ideology and Policy Making:-
• Policy preferences keep on changing over time. They change in response to
problems and issues that arise.
• Problems arise and new concerns emerge, the policy preferences change.
And this helped the government and political parties to craft new policy
agendas
• But the party is in power differ in the ideologies. The problem and concern
can be common and general for all, but the way of dealing with the problems
and how the problems are addressed is different for all political parties.
• Difference in approaches towards solving a problem is due to the differences
in ideologies.
• These ideological differences provide us the types of policies that we notice
are being made during the reigns of different political parties.

Nehruvian vision to policy making:-

Jawaharlal Nehru is well known for his economic strategies and foreign policy
strategies, that he adopted since independence. India's economic policy reflects the
clear vision of ultimate goal, its social and economic colour and content, and the
path to be followed in reaching the goal. The ultimate goal of the socialist pattern
of society had been adopted since independence on the insistence of Nehru. There
are enough evidences in Pandit Nehru’s speeches and writings to show his
attachment towards socialism. And this even reflected in his policy making. The
biggest contribution of Nehru to economic strategy and his important policymaking
strategy and vision can be seen in committing the nation to a policy of planned
economic development.
There have been 5 principal pillars of Nehru’s legacy to India- nation building,
democratic institution building, secularism, democratic socialist economics, and an
ethical foreign policy, still form the cardinal values of India.
However, some sections criticize Nehru’s policies for being responsible for India’s
strategic failures as well as domestic problems like the Kashmir dispute. In this
context, it is essential to understand the contribution of Nehru in the right context
and its relevance for India today.

Contribution of Nehru
Institutionalization of Democracy:
• Nehru was committed to the establishment of a strong Indian nation where
the concept of equal rights of citizens would override all societal divisions. •
Nehru’s ideals envisioned in ‘Objective Resolution’, steered the Constituent
Assembly to draw up a working constitution. • It gave a tremendous leg up
to the country’s historically discriminated sections like Dalits and religious
minorities.
• It was he who established the robust tradition of parliamentary supremacy
over the military that prevented India from becoming another junta-ruled
Third World autocracy.
• The nature of the Nehruvian way of politics (debate and deliberation) led to
development of respect for parliamentary procedures, abiding faith in the
constitutional system.
Ideal of Secularism:
• Nehru believed that India belonged to all who had contributed to its history
and civilization, and that the majority community had a special obligation to
protect the rights, and promote the well-being, of the minorities.
• This helped in building the narrative of ‘Unity in Diversity’. Welfare State:
• Through the planned economy approach, Nehru envisaged that in a land of
extreme poverty and inequality, the objective of government policy must be
the welfare of the poorest, most deprived and most marginalized of the
people.
 • This notion drives the policy of successive governments that poverty and
inequality in India cannot be tackled only by the market.
• It can be reflected in creation of a framework of rights, including the right to
work, the right to food, the right to education and the right to fair
compensation for land, all of which have empowered the poorest of people
in India.
Establishing Institutions of Excellence:
• It was Nehru who built the scientific base for India’s space and engineering
triumphs today.
• With the establishment of what is now the Indian Space Research
Organisation (ISRO), India has achieved the status of Space power today.
• With the Indian Institutes of Technology (IITs) established in his tenure,
Indians have a worldwide reputation for engineering excellence.
• Also, he laid the foundations of a dual-track nuclear programme due to
which India achieved nuclear-capable status.
• Also, the economic policies of investing in heavy industries and protecting
the nascent manufacturing sector, helped India to substitute imports to a
certain extent.
Foreign Policy:
• For Nehru, Non-alignment (NAM) was the response to the bipolar divisions
of the Cold War era.
• After two centuries of British rule, Nehru was determined to protect the
country’s strategic autonomy without compromising independence by
aligning itself to either superpower in the Cold War.
• This policy of NAM, made India one of the most distinguished leaders of
Third World solidarity, reached out to the rest of the colonized world, and
forged a joint front against colonialism and a reinvented imperialism.
• Nehru was also a skilled exponent of soft power, much before the term was
even coined.
• He developed a role for India in the world based entirely on its civilizational
history and its moral standing, as the voice of the oppressed and the
marginalized against the hegemony of the day.
• This gave India global reputation and prestige across the world for years, and
strengthened our self-respect as we stood, proud and independent, on the
global stage.
All of these visions and principles reflect his policy making strategy.