Hop, skip, but no jump.

"It was mounted on the scale of another tryst with destiny (Jawaharlal Nehru on 14 August, 1947), the 1991 shift of our 'mixed economy' in favour of the free market," wrote an editorial in the Mint. "Scarcity amid poverty all around should have flagged failure, if not chunky overpriced cars sold as privilege, but it took a couple of shocks to shift our economic strategy. The prospect of vehicles going without fuel, after a Gulf-war oil flare-up exhausted our dollar stash for imports, had exposed self- sufficiency as a flawed policy, even as the Soviet cave-in bared the weak-incentive jinx and low-efficiency trap of an over-centralized economy." Known as the balance of payments crisis, India had enough foreign exchange for just 3 weeks of imports and was in danger of defaulting on its debts in 1991, when the Reserve Bank (RBI) had to pledge 67 tons of gold to get an emergency loan of $2.2 billion from the IMF, wikipedia. This led to the famous reforms by the then Prime Minister Narasimha Rao and Finance Minister Manmohan Singh which ended the Licence-Permit Raj, devalued the rupee by 19% and allowed foreign investment into India, wikipedia. Today is the 30th anniversary of the budget which started the process, so there are a spate of articles by the architects of those reforms and by an assortment of pundits analysing the effects on India's economy since then. "Over the last three decades, successive governments have followed the path of economic reforms to catapult India into a $3 trillion economy and into the league of the world's economies but the road ahead is even more daunting than the 1991 crisis, former Prime Minister Manmohan Singh said on Friday," Times of India (TOI). "He said the country had made tremendous progress in the last three decades due to the economic reforms ushered in by the Congress Party in 1991." "The whole process of abolishing import controls and moving to market-based methods of allocating imports, with an ultimate shift to a market-based exchange rate, was done in the space of eight hours," said Montek Singh Ahluwalia, TOI. The devaluation of the rupee was done in two stages by the RBI and "The code word for the exercise was 'Hop, skip and jump'," said C Rangarajan, TOI. How droll! But while they may have seen it as funny, Indians suffered an enormous erosion of wealth. The rupee went from an average of Rs 18 to the dollar in 1990-91 to Rs 24.5 to one dollar in 19991-92 to around Rs 31 against one dollar in 1992-93, wikipedia. This is not a devaluation of 19% but an erosion in value of nearly 73% in two years, which means cost of imported goods, including oil, would have soared and foreign travel would have become exorbitant for Indian businessmen. Are we, the ordinary citizens of India, better off? Per capita income has gone up so poverty has decreased but inequality has increased, wrote Prof Jayati Ghosh. "This increased inequality was not just an unfortunate by product of the reform process, it was embedded in its very framework." "This Faustian pact with the devil is reaching its apotheosis in the extreme crony capitalism of the current phase of Indian development, as a major public health crisis and catastrophic increases in poverty and hunger occur along with incredible increases in wealth and income of a tiny handful." "It was not done in a big bang, but gradually, and gradualism also meant that its benefits flowed in over a period of time. However, there is little doubt that benefits did flow," defended Ahluwalia. The growth of the middle class was supposed to transform society but, even as higher education has expanded tenfold "a professional who has paid a premium price for his credentials while receiving a poor quality education will not only cut corners to recover that investment but will also have little regard for professional norms and ethics since his education did little to impart him with any professional values," wrote Prof Devesh Kapur, TOI. "If there is one phrase that suitably captures the impact of three decades of economic liberalization after 24 July 1991, it is the explosion of choice in India," wrote Vivek Kaul. However, high unemployment and low labor force participation means that a large number of youngsters are missing out on economic growth. Hopping and jumping on the same spot. What's the use?