Liberalisation, privatisation and globalisation have transformed the nature of development administration." Discuss.

Pre-Liberalisation Development Administration (Before 1991)

Prior to 1991, development administration in India was largely characterized by a strong state presence. The Planning Commission (established in 1950) played a central role in formulating five-year plans, directing resource allocation, and overseeing development projects. The administrative system was heavily bureaucratic, with a focus on regulation, control, and public sector dominance. Key features included:

• Import Substitution Industrialisation (ISI): Emphasis on domestic production and protection from foreign competition.
• Public Sector Enterprises (PSEs): Dominance of state-owned enterprises in key sectors like steel, energy, and banking.
• Licence Raj: Extensive licensing requirements for businesses, leading to bureaucratic delays and corruption.
• Welfare State Orientation: Focus on social welfare programs and poverty alleviation.

The LPG Reforms and their Impact

The economic crisis of 1991 prompted the Indian government to undertake sweeping economic reforms, commonly known as LPG. These reforms had a profound impact on development administration:

Liberalisation

Liberalisation involved dismantling regulatory controls, reducing tariffs, and easing restrictions on foreign investment. This led to:

• Deregulation: Reduction in the number of industries requiring licenses.
• Trade Liberalisation: Lowering of import tariffs and removal of export restrictions.
• Increased Competition: Entry of private players into various sectors.

Privatisation

Privatisation involved transferring ownership and control of PSEs to the private sector. This aimed to improve efficiency, reduce fiscal burden, and promote competition. Methods included:

• Disinvestment: Selling of government equity in PSEs.
• Strategic Sale: Transfer of management control to private investors.
• Closure: Winding up of loss-making PSEs.

Globalisation

Globalisation involved integrating the Indian economy with the global market. This led to:

• Foreign Direct Investment (FDI): Increased inflow of foreign capital.
• International Trade: Expansion of exports and imports.
• Technological Transfer: Adoption of new technologies from abroad.

Transformation in Development Administration

The LPG reforms triggered a significant transformation in development administration:

• Shift in Role: From a direct provider of goods and services to a facilitator and regulator.
• Emphasis on Efficiency: Focus on cost-effectiveness, performance measurement, and accountability.
• Decentralisation: Transfer of powers and responsibilities to lower levels of government (73rd and 74th Constitutional Amendment Acts, 1992-93).
• Public-Private Partnerships (PPPs): Increased collaboration between the public and private sectors in infrastructure development and service delivery.
• E-Governance: Adoption of information and communication technology (ICT) to improve transparency, efficiency, and citizen participation. (National e-Governance Plan launched in 2006)

Sectoral Impacts

The impact of LPG varied across different sectors:

Sector	Pre-LPG	Post-LPG
Telecom	State monopoly (BSNL)	Private sector participation, increased competition, mobile revolution
Banking	Dominance of public sector banks	Entry of private banks, financial sector reforms, improved efficiency
Infrastructure	Public sector investment	PPP models, private sector investment, increased capacity

Challenges and Concerns

Despite the benefits, the LPG reforms also posed challenges:

• Increased Inequality: Widening gap between the rich and the poor.
• Job Losses: Restructuring of PSEs led to unemployment.
• Regional Disparities: Uneven distribution of benefits across different regions.
• Corruption: Increased opportunities for corruption in the private sector.
• Erosion of Welfare State: Reduced emphasis on social welfare programs.