India's Reform Journey Revisited - K.P. Krishnan, CPR

What is one reform that was overlooked in 1991?

If one were to look back at 1991 and try and describe what we did, my sense is it was a case of creating new markets. I am confining myself primarily to economic policy. So, creating new markets and crafting new institutions and policies to deal with what India then required. Looking back again, what are the significant failures that we now see as we look at it from today? It would be in my opinion in the areas of agriculture, education, social sector, health, women and child development.

Looking at 1991 from the prism of 2023, what I would do differently is the governance paradigm so that the ability to constantly create newer institutions, newer policies that are required to handle current challenges rather than be stuck with institutions and policies that worked at some point in time and that have become dysfunctional today. In that sense, the ability to deal with markets in agriculture, deal with challenges in health, education, deal with land issues, deal with cities which have now become far more ungovernable than they were 25-30 years ago.

The biggest challenge would be the ability of the state to constantly deal with current issues, current problems, but come up with solutions that are contemporary. I think that's one big reform that we missed out on in '91. We handled current questions very competently, but we didn't handle our ability to deal with current questions as they will come along as we go down on this path. This need to constantly renew institutions and policies, which is I think the heart of state capacity.

What is one reform that India needs today?

I would think that's the most needed reform. This question of state versus markets and where we are in this continuum is a question that'll keep recurring. My sense is it will never be a less state, it will always be a different state, a more capable state, a newer state. For instance, look at the current regulation of data question that's coming up.

It's all about creating a new institution in the state that will deal with questions that are identical to what we faced in finance, what we faced in competition, what we faced in telecom at one point in time. The ability of the state to handle that question, which is a new domain but the questions are identical. I think that is in my opinion the biggest challenge then and the biggest challenge now.