At the beginning of the first period, erstwhile prime minister Jawaharlal Nehru implemented policies based on import substitution industrialisation and advocated a mixed economy where the government-controlled public sector would co-exist with the private sector. He believed that the establishment of basic and heavy industry was fundamental to the development and modernisation of the Indian economy. The government, therefore, directed investment primarily into key public-sector industries—steel, iron, coal, and power—promoting their development with subsidies and protectionist policies. This period was called the Licence Raj, or Permit Raj,Oxford English Dictionary, 2nd edition, 1989: from Skr. rāj: to reign, rule; cognate with L. rēx, rēg-is, OIr. rī, rīg king (see RICH). which was the elaborate system of licences, regulations, and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990.Street Hawking Promise Jobs in Future , The Times of India, 25 November 2001 The Licence Raj was a result of Nehru and his successors' desire to have a planned economy where all aspects of the economy were controlled by the state, and licences were given to a select few. Up to 80 government agencies had to be satisfied before private companies could produce something; and, if the licence were granted, the government would regulate production. The licence raj system continued under Indira Gandhi. In addition, many key sectors such as banking, steel coal, and oil were nationalized. Under Rajiv Gandhi, the trade regime were liberalised with reduction in duties on several import items and incentives to promote exports. Tax rates were reduced and curbs on company assets loosened.
At the beginning of the first period, erstwhile prime minister Jawaharlal Nehru implemented policies based on import substitution industrialisation and advocated a mixed economy where the government-controlled public sector would co-exist with the private sector. He believed that the establishment of basic and heavy industry was fundamental to the development and modernisation of the Indian economy. The ?government, therefore, directed investment primari!ly into key public-sector industries—steel, iron, coal, and power—promoting their development with subsidies and protectionist policies. This period was called the Licence Raj, or Permit Raj,Oxford English Dictionary, 2nd edition, 1989: from Skr. rāj: to reign, rule; cognate with L. rēx, rēg-is, OIr. rī, rīg king (see RICH). which was the elaborate? system of licences, regulations, and accompanying red tape that ,were required to set up and run businesses in India between 1947 and 1990.Street Hawking Promise Jobs in Future , The Times of India, 25 November 2001 The Licence Raj was a result of Nehru and his successors' desire to have a planned economy where all aspects of the economy were controlled by the state, and licences were given to a select few. Up to 80 government agencies had to be satisfied before private companies could produce something; and, if the licence were granted, the government would regulate production. The licence raj system continued under Indira Gandhi. In addition, many key sectors such as banking, steel coal, and oil were nationalized. Under Rajiv Gandhi, the trade regime were liberalised with reduction in duties on several import items and incentives to promote exports. Tax rates were reduced and curbs on company assets loosened.