Licence Raj

Licence Raj ( to German " license rule ") is a derisive term for the complicated web of state permits, regulations and bureaucracy, the Indian economy has undergone in the years 1947-1990.

India was then a directed economy. The whole of the economy subject to state control. Who wanted to open and run a business, required government approval. If a private company, following requests to up to 80 authorities finally allowed to start production, then this was under state control. Also imports required a license and were also inhibited by high tariffs.

This system stifled the initiative, promoted the corruption, caused the Indian economy to stagnate and brought India several times to the brink of bankruptcy.

Since the inauguration of Prime Minister Rajiv Gandhi in 1984, but especially from 1991, when the current Prime Minister Manmohan Singh served as Minister of Finance, the socialist economic system of India is once been deregulated noticeably more or less. This has led to an economic miracle with high growth rates. Nevertheless, India's economy is still heavily regulated compared to other more market-oriented countries.

The term "Licence Raj " was coined by the Indian politicians C. Rajagopalachari, the central planning, nationalization and monopolization of the Indian economy and the foreclosure of the Indian market fought with his Swatantra Party.