Government should resist the urge to control everything in a liberalised economy, Finance Minister Arun Jaitley has said.
Delivering Justice Konda Madhva Reddy Memorial lecture, Jaitley also said India did not have the “intellectual honesty” to admit that the previous economic model was at least “partly fraud”.
“If you compare the pre-1991 with the post-1991 situation…there is one lesson as far as the government is concerned. Inherently government has an urge to control. Governments have an urge to regulate. Governments have urge to become overbearing. All this is somewhat inconsistent with the post-1991 environment,” he
“Governments then have to become facilitators. The government’s urge to control has to be restrained,” he said.
“The reforms could have dated at least two decades back. But hopefully the jury on the subject will always be out and it will be matter of historians and analysts to write this,” he said.
When state-owned MTNL and BSNL had monopoly, the telephony reach was just 0.8 percent and opening up of telecom sector took it to 80 percent, he said.
“The state monopoly was considered to be in the larger interest of the public. Telephony is one example where the state monopoly could provide telephony only to less than one percent of the people where you have 50 years of state monopoly,” Jaitley said.
Further, he said expansion of judicial remit too was “inconsistent” with economic reforms.
“Just as there is an urge to control by the government, there is a corresponding urge to expand as far as the judiciary is concerned. And that urge to expand, like the government’s urge to control, is also inconsistent with the idea of more market-centric reforms,” he said.
The whole idea behind the arbitration laws was to allow parties to settle disputes amicably without the judiciary’s intervention, Jaitley said.
“The whole object of arbitration law was that parties choose their own forum and the courts don’t interfere. And that is the practise world over…In liberalised economy the interference itself will be counter-productive to the whole objective of investment,” he said.