Liberalisation and Indian industry

Since the 1990s, liberalisation has changed Indian industry:

• Private and foreign firms may now enter areas once kept for the government, such as telecom, aviation and power.
• Companies no longer need licences to set up or expand most industries.

Multinationals bought up Indian firms. Coca Cola bought Parle's soft drinks (Thums Up, Limca). Coca Cola's advertising budget alone (about ₹400 crore) was bigger than Parle's entire turnover (about ₹250 crore): Indian firms could not compete with such money.

Disinvestment means the government selling its shares in public-sector companies. When Modern Foods (the maker of Modern Bread) was sold to a private company, about 60 per cent of its workers were made to retire within five years.

Outsourcing: big companies increasingly give work to small firms and even to workers in their homes. This keeps wages low, because small units and home workers are hard to protect with labour laws. Contract labour (hired through a contractor, without job security) has risen, and it is much harder for trade unions to organise scattered workers, so unions have weakened.

Land acquisition: new industries and special economic zones need land, so governments acquire it from farmers, often at low prices. Many are displaced. Adivasis make up about 40 per cent of those displaced by such projects, far more than their share of the population.

Liberalisation has brought growth, but with more insecurity for many workers.