The making and unmaking of the Dabhol project
In 1991, a minority Congress government, applauded by the ringmasters of the neo-liberal circus, embarked on the wholesale liberalisation of the Indian economy. In many respects it was a wholesale enterprise in the literal sense of the term, as the managers of the political-economy hawked public assets and prospects to private promoters on terms and through procedures that, in any realistic assessment, call to mind the bargains of middle-men with no interest in the merchandise after the profit has been fetched.
If the pre-liberalisation period was the time of crony capital, the decade of liberalisation saw the emergence of the crony state. The announcement of economic deregulation, ostensibly in the interest of attracting greater private, particularly foreign, participation in the economy, and, by extension, of introducing market efficiency, was followed by a series of clandestine measures by the custodians of this crony state that, to the detriment of both productive investment and efficient markets, simply rearranged the country to the convenience of corporations.
Much of what transpired was a breach of mandated procedures and responsibilities, sound judgement, and the established proprieties of the public sphere. Good faith concerned only the secretive parties to the transaction — the 'divesting' state and the 'investing' corporate — to the exclusion of the general public. And while this loot of public property and the exchequer was going on, glorified town criers sermonised about fiscal discipline, the regulatory role of the state, the efficient virtues of private capital and miscellaneous market truths. Intellectuals stampeding across the policy divide echoed the refrain and sustained a crescendo that drowned dissent. Given the secrecies of the process, why things transpired the way they did must, for the moment, remain an imponderable. But how they did happen is best illustrated by a simple recapitulation of Enron's success in undermining both the state and market in India.