Smuggling, Exchange Controls and Indian Economy

Economy Sunanda Sen The failure of the governments recent drive to curb smuggling is illustrative of the self-defeating nature of controls in a partially planned economy. This paper argues that smuggling, like other devices to evade government controls, is inherent in the structure of a mixed economy. Attempts to control such evasion through a manipulation of the instruments open to the State in a mixed economy are not likely to meet with much success unless the reforms are extensive enough to change the character of the State itself.