Economic policy of liberalisation envisaged interalia deregulation, delicensing, expanded share of private sector in the economy, privatisation of public sector enterprises leading to their disinvestment, freedom to large businesshouses to expand and to diversify and be on par with other business units leading to amendment of MRTP Act, FERA changes enabling MNCs to have majority share in the equity capital and to FII to invest in stock markets, reductions in direct and indirect taxes especially in import tariffs coupled with easing of non-tariff barriers. Chidambaram under the UF government went far ahead in pushing up economic reforms and integrating Indian economy with the global economy when import tariffs were slashed to the range of 20 per cent to 30 per cent and non-tariff barriers (NTBs) were considerably removed by bringing large number of products under OGL.

Economic policy statements show that the new BJP led regime is not opposed to liberalisation, in fact it has reconciled if not resigned to the existing economic policy with some adjustments. It is true that slashing of import tariffs and easing of non-tariff barriers have adversely affected some industries which include consumer goods and capital goods.

Some of theindustries affected by liberalisation are chemicals, capital goods, pharmaceuticals, electronics and rubber. Pharmaceuticals industry in India faced not only competitive business environment of MNCs but also dumping of bulk drugs from countries like China. Some industries on the other hand have been affected adversely by recession that is engineering, iron & steel, cement, automobiles specially heavy commercial vehicles. A clear distinction between industries hit by recession and those adversely affected by liberalisation has to be clearly drawn. It is the later type of industries that the term `swadeshi' has some relevance and the new government may come out with policy measures to provide relief to them.

India being a member of WTO can not afford to violate its charter by enhancing import tariffs and putting quantitative barriers on imports.

However, within the provisions of WTO, it may be examined whether this country could have done with higher import tariff and non-tariff barriers. There is nodenying the fact that such an approach was feasible.

Assocham's contention that import tariffs has been brought down well below WTO binding rates is worth considering and it is in such cases that a review of existing tariff structure is warranted. Such a review would not only provide relief to home industries faced with competition by MNCs but would also revive the stock market. Prices of shares of Indian companies affected by MNC competition have reached lowest ebb but prices of MNCs shares have increased several folds while liberalisation has contributed to widening of trade deficit, it has also accelerated forex inflows into India to enable her to meet its chronic trade deficit and debt-servicing obligations. Impact of liberalisation on foreign trade sector can be gauged from the fact that while oil import bill has declined by about $1.4 billion during 1997-98 following fall in the international oil prices, non-oil imports have increased by over $3.0 billion widening trade deficit during the period.

Total trade deficit in 1997-98 is estimated at $7.5 billion as against about $6.0 billion in 1996-97 and $8.95 billion in 1995-96. In view of the turmoil in SE Asian countries which has affected India's exports, declining exportable surpluses due to rapidly rising population in India, stiff competition from India's main rivals, fall in international prices in general, prospects of improved export performance in future are bleak.

Imports on the other hand continue to show an upward trend following a cut in tariff and non-tariff barriers. Import compression within the provisions of WTO can be attempted to contain rising imports. `Swadeshi' policy of BJP led government would be relevant in the present economic environment if it meant import compression within the permissible range of WTO rather than restricting imports in non-core sector indiscriminately.