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Good intentioned government intervention in the markets by licensing of production, has always resulted in long term damage. All that it has done is to create unwanted market distortions and crony economies.

The Telengana government is attempting to license and control agricultural production and is intervening in markets by trying to become the market maker and the market.

The intentions of the Telengana government are good. But we all know what the license permit raj ultimately results in. There is no reason to believe that the results will be different for agriculture. 

Sure, we can be fooled by excellent results for 2-4 years. And then, the system will rapidly start showing its damaging nature. It’s a communist style, command and control, centralised approach and is doomed to fail.


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