Has the Indian governmental system responded adequately to the demands of Liberalization, Privatization and Globalization started in 1991? What can the government do to be responsive to this important change?

The 1991 reforms redefined the state's role from controller to facilitator; the governmental system has responded substantially, though incompletely.

Adequate responses

• Dismantling of industrial licensing and the MRTP regime; FERA replaced by the liberal FEMA, 1999.
• An independent regulatory state was built for market governance: SEBI (statutory in 1992), TRAI (1997), IRDAI (1999) and CCI (2003).
• Second-generation reforms deepened the shift: GST (2017), the Insolvency and Bankruptcy Code (2016), and decriminalisation of minor business offences through the Jan Vishwas Act, 2023.
• e-Governance and Digital India — DBT, GeM, faceless tax assessment, the National Single Window System — cut discretion and transaction costs.

Where response lags

• Bureaucratic proceduralism, tenure churn and risk-aversion persist; contract enforcement and commercial dispute resolution remain slow despite dedicated commercial courts.
• Policy unpredictability — retrospective taxation, repealed only in 2021 — and overlapping regulators deter investment.
• Factor markets — land, labour (codes yet to be fully operationalised) and agriculture — are under-reformed, and administrative capacity varies widely across states.

Way forward

• Regulatory impact assessment and sunset clauses for new rules; sustained, time-bound deregulation drives at both Union and state levels.
• Civil service capacity through Mission Karmayogi, lateral entry and outcome-based performance norms; deeper cooperative federalism through state-level ease-of-doing-business competition.

The system has travelled from licence-permit raj to a facilitator state; responsiveness must now shift from liberalising product markets to reforming factor markets, institutions and its own administrative culture.