LIFE AFTER LIBERALISATION

Summary

The 26th A.D. Shroff Memorial Lecture, delivered by Dr. Ashok S. Ganguly — then Director of Unilever in London and formerly Chairman of Hindustan Lever — on 24 December 1991 in Bombay and published as a Forum of Free Enterprise pamphlet on 15 January 1992. Ganguly speaks in the immediate aftermath of two epochal ruptures, the collapse of Soviet socialism and the Narasimha Rao government’s launch of economic reforms, and uses the platform to think aloud about what daily life, work and political expectation will look like in an India that has formally turned away from the developmental settlement of 1947.

The address opens with the observation that the “half-life of innovations” is collapsing — from a decade in the 1960s to perhaps two years by century’s end — and reads the global moment through that lens. Gorbachev’s perestroika unleashed forces that the reformers themselves could not control; the collapse of the Comecon bloc has left newly liberated states without trusted institutions; suppressed ethnic and religious conflicts have reopened wounds fifty years closed. Against the hope that markets will rescue moribund economies on their own, Ganguly insists that life after liberalisation can be built only by blood, toil and tears, not by political rhetoric or by pretending that laissez-faire is an easy route.

Turning to India, Ganguly diagnoses the inherited developmental formula — central planning, suspicion of foreign capital, anti-concentration controls, self-reliance and nationalisation of economic flows — as an obsolete “mantra” that trapped Indian society and that his own pre-1947 generation believed in too long. India’s real strengths, he argues, are its people, its transport and communication infrastructure, its abundant natural endowments, and the modern economic philosophy produced by figures like Amartya Sen and Jagdish Bhagwati. He warns of the vast gap between “liberalisation on paper” and “liberalisation in practice”, criticises the scientific establishment for resisting modernisation in order to keep using taxpayer money, and insists employment and dignified livelihoods cannot be legislated into existence — only sustainable growth can deliver them.

The closing “Post Script” frames liberalisation as irreversible. Ganguly invokes the late Rajiv Gandhi’s reform impulse, defends Indians who emigrated and remitted skills back, and tells “the midnight’s children and their offsprings” that they need no longer justify the failures of the past. The lecture closes with the prediction — printed alongside a back-cover epigraph from Eugene Black that private enterprise must be embraced as an “affirmative good” — that life after liberalisation will be thrilling, if somewhat awe-inspiring, and for a time very painful.

Key points

• The 26th A.D. Shroff Memorial Lecture, delivered in Bombay on 24 December 1991 by Ganguly, then Director of Unilever London and formerly Chairman of Hindustan Lever.

• Reads the post-1989 global moment through the metaphor of a collapsing ‘half-life of innovations’ — from ten years in the 1960s to perhaps two by the turn of the century.

• Argues there is no proven model for transitioning from centralised planning to a market economy; Hong Kong, Guangdong, Taiwan and the two Koreas provide only partial parallels.

• Diagnoses the Nehruvian formula — central planning, suspicion of foreign capital, anti-concentration controls, self-reliance and nationalisation — as an ‘incontrovertible mantra’ with disastrous consequences.

• Identifies Amartya Sen and Jagdish Bhagwati as founders of modern economic philosophy relevant to the realities of the poorest of the poor.

• Warns of a ‘vast difference between liberalisation on paper and liberalisation in practice’, with state-level plans still asserting strengths and resources individually rather than as a federal whole.

• Insists employment and dignified livelihoods cannot be created artificially or by legislation — only sustained economic growth can deliver them.

• Frames the post-liberalisation transition as irreversible, painful in the short run but ultimately thrilling, invoking the late Rajiv Gandhi’s reform aspirations.