February 20, 2009

REASON TV: Slumdog Thousandaires—What the celebrated movie can teach Americans about economic stimulus.

Indians were enthusiastic about self-rule, but “the problem was that the Indian political leaders had this very Fabian Socialist idea,” says Shikha Dalmia, a senior analyst at Reason Foundation and native of India. “And that completely thwarted the entrepreneurship of the country.”

For decades would-be entrepreneurs staggered under the weight of corruption and bureaucracy. Want to import a computer for your business? You’d have to get permission from a bureaucrat. Want to sell food from a small cart? You’d need all kinds of licenses.

But in the 1990s, India emerged as a high-tech powerhouse. What changed?

“In the 1990s India started liberalizing its economy,” says Dalmia, “and it did three things: cut taxes, liberalized trade, and deregulated business.”

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