Liberalisation sandboxes can break deadlock

Used well, they could become living demonstrations of the govt’s reform vision—global models of sustainable, rules-based urban and economic governance

- VARDAAN AHLUWALIA

INDIA HAS BECOME boldly ambitious in what it wants to build but remains less so in how to achieve it.

Reforms over the past decade have been a pattern of incrementalism at best—not because they lack democratic legitimacy or policy nuance, but because they were limited by politically safe measures that ultimately failed to deliver commensurate results. For every step forward, a chorus of special interests and federal complexities often pulls another step back. The costs are substantial—the stalling of land acquisition reform alone has left land-related disputes holding up investment projects greater than $200 billion. Initiatives such as special economic zones (SEZs) and the production-linked incentive scheme also follow an incrementalist approach by relying on financial incentives to offset structural bottlenecks rather than addressing them.

Effective reform is a public good, one that requires deliberate effort in diverse democracies. As James Madison and BR Ambedkar cautioned, democratic systems are distorted when formally empowered governments are unable to act because of narrow special interests.

This raises the question of whether alternative reform pathways exist that can demonstrate outcomes to help build consensus. One possibility lies in using existing constitutional space more creatively—by reimagining Union Territories (UTs) not as administrative afterthoughts or strategic outposts but as liberalisation sandboxes—controlled reform environments. Drawing on experience from Guangdong’s reform enclaves, Estonia’s e-governance architecture, and Singapore’s financial regulatory design, such frameworks could be tested locally in UTs before being scaled nationally.