Licence Raj

Common card · No. 343666

Licence Raj, Permit Raj, Permit-Licence Raj, or Quota-Permit-License Raj (rāj, meaning "rule" in Hindi) is a term coined by Indian independence activist and statesman C. Rajagopalachari for the system of strict government control and regulation of the Indian economy. Under the system, which rested on the Industries (Development and Regulation) Act in 1951, and lasted until the early 1990s, businesses needed government licences to set up, expand, or change production, and these were often difficult to obtain. Licence Raj was intended to protect Indian industry, promote economic self-reliance, and ensure regional equality. Up to 80 government agencies had to grant approval before a private company could produce something and, if granted, the government regulated the production. Economists including Jagdish Bhagwati, Padma Desai, and Anne Osborn Krueger have argued that the system misallocated resources, restricted competition, and created large rents for those who secured licences. Real economic...

Read on Wikipedia