Reforms, Gradually and by Stealth
Policy changes can often only be made gradually. Montek Singh Ahluwalia makes this point via two excellent examples in his book, Backstage . The first one was about how cement prices were deregulated. He starts by explaining the problem. Even in the early 1980’s, cement prices were set by the government. The Center even controlled who got how much cement! Such a system led to cement makers feeling that they could make a lot more if only the market could decide prices, private buyers never knowing whether they could get enough cement, all of which then fuelled corruption and black markets. What finally caused a change of heart? AR Antulay, Maharashtra CM, was caught in a scandal where he was siphoning off cement allocated to state projects to be sold to private buyers in return for kickbacks. Much worse (politically speaking) was that he’d used Indira Gandhi’s name in his dealings. She was furious and that opened the window to do something to prevent such things fro...