Role of law and legal institutions in emerging economy: the Indian perspective

Jeet Bhatt (Gujarat National Law University))

Abstract

Role of Law and Legal Institutions is very crucial in the Economic sphere of the State. I will discuss the changes in Law which brought the changes in the economic policy and the changes in the economic policies which brought changes in the Law to highlight the inter-relation of the Law and Economics in the Development of the Indian State. I will examine the process of legislation through which the highly centralized inward-looking economic policies of India came to be transformed into liberalized, outward looking policies. I will show how the country moved towards globalization, liberalization, deregulation and privatization and what were its effects on the economic sphere. What I want to conclude is that in the Government sphere as in the market sphere there is an invisible hand, but operating in the opposite direction from Adam Smiths; an Institution who intents only to serve the public interest by fostering interventions in the economy is led by an invisible hand to promote private interest which was no part of his intention. This concept has been accepted by the Planning Commission of India and that is why it changed its policies by way of the 8th Five year plan and the Role of the Indian State in the private sphere was withdrawn and the private sector was given much wider space to carry on its activities without many interventions, regulations and restrictions.

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