Licence Raj

The Licence Raj or Permit Raj (rāj, meaning "rule" in Hindi) was the elaborate system of licences, regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990.

The Licence Raj was a result of India's decision to have a planned economy where all aspects of the economy are controlled by the state and licences are given to a select few. Up to 80 government agencies had to be satisfied before private companies could produce something and, if granted, the government would regulate production.

Reforms since the mid-1980s have significantly reduced regulation, but Indian labour laws still prevent manufacturers from reducing their workforce without prohibitive burdens.

Term

The term plays off "British Raj", the period of British rule in India. It was coined by Indian statesman Chakravarthi Rajagopalachari, who firmly opposed it for its potential for political corruption and economic stagnation and founded the Swatantra Party to oppose these practices.