From monopoly power to deregulated markets

Abstract

India’s policymakers justified the introduction of neoliberal economic reforms by advancing one of the main grounds that it would help optimise the performance of state-controlled enterprises. This article argues, on the contrary, that the reform process had an extremely deleterious effect on these enterprises’ operations. Based on a detailed ethno-historical case study of ITI, a large public sector manufacturer of telecommunications equipment, the article highlights the contradictory nature of neoliberalisation. Even as public sector companies were exposed to new rules of competition, they continued to be subjected to a web of bureaucratic constraints. The article then proceeds to contest the official narrative of the transition from a command economy to a market economy as a gradualist and pain-free process. For public sector managers and workers, in fact, the rupture with the past proved to be a precipitous and fairly violent experience. The article concludes by examining a key strategic measure adopted by the ITI management to enable it to adjust to the changed business climate, voluntary retirement and workers’ responses to this scheme.