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(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com .)

When GoI raised custom duties on a number of products in December 2017, as an eternal optimist, I took the view that this had been done for revenue reasons. But increases in duties on a long list of products ranging from kites and footwear to cellular mobiles phones and motor vehicles in Budget 2018 have ended that optimism.Indeed, revenue secretary Hasmukh Adhia has explicitly stated that the duties have been levied, not to raise revenue, but to provide protection to micro, small and medium enterprises (MSMEs). Adhia adds, “We have a phased manufacturing programme in electronic manufacture industry for which increasingly we will be putting more duty on the final product, then on second level of spare part and third level of spare part.”The clear message from the revenue secretary: stay tuned, more tariff hikes are on the way.For those of us old enough to remember the India of the 1960s to the 1980s, this is déjà vu. Thanks to ultra-high protection and tight internal regulation, India was condemned to per-capita growth rate of less than 2% during 1950-51 to 1990-91. Imports as a proportion of the GDP, which did not even once touch the 10% mark during the four decades, fell to as low as 4.1% in 1969-70. Exports were consistently lower yet.It was not until 1991 that a new generation of political leadership, which appreciated the damage protection and regulation had done, came along. Supported by an enlightened bureaucracy, this leadership went on to systematically liberalise the economy.With substantial liberalisation under Prime Ministers P V Narasimha Rao and Atal Bihari Vajpayee , India became the first democracy to achieve 8%-plus growth for nine years beginning in 2003-04. The top industrial tariff rate fell from 355% in 1990-91 to 10% in 2007-08 and imports and as proportion of the GDP expanded to 30% and exports to 24% by 2011-12.Sadly, a new generation of bureaucrats seems to have now replaced its more enlightened predecessor. It is on course to erect the wall of protection all over again.French economist Frédéric Bastiat wrote as far back as 1845 that protectionism appeals to many because its favourable effect on the output of the protected sector is immediately visible while the damage it does is spread throughout the economy and requires deeper probing.Consider, for example, the steel industry. We have come to its rescue through anti-dumping duties, tariffs and pressure on railways to buy steel domestically, preferably from public sector units. There is little doubt that these policies give fillip to our steel industry. But they also raise the price of steel, which undermines the pace of expansion of railways and hurts consumers of products using steel such as kitchen utensils, cutlery, refrigerators, bicycles, motorcycles, farm machinery and automobiles. The higher costs also lead to job losses in these products.The same goes for increased protection to mobile phones. It helps local mobile producers, but raises the price that consumers pay. Some consumers are entirely priced out, undermining progress towards digital India. American philosopher George Santayana wrote in his 1905 book, Reason in Common Sense, “Those who cannot remember the past, are condemned to repeat it.” We had pursued with vigour the phased manufacturing programme (PMP) during the heydays of licence-permit raj.Under it, investment licence to a firm was granted only on the conditionthat it would progressively replace imported components with domestically sourced ones. Once the agreed deadline for indigenisation passed, the firm would not be given import licence for the components. The policy was a total failure and the New Industrial Policy, 1991, relegated it to the dustbin of history.The argument that protection would help the MSMEs also needs to be carefully scrutinised. Did we not do nearly everything to promote our small-scale enterprises in the past? Until 2001, we had a near ban on the imports of most products produced by them. The enterprises also had the exclusive lock on the production of most of the items they produced via the small-scale industries (SSI) reservation. We followed these policies for 50 years and yet produced no notable success. In the end, both import ban and SSI reservation were ended as a part of our reform programme.When our producers of even the most labour-intensive products such as garments, footwear and furniture, and wholly traditional items such as kites and rakhis are unable to outcompete foreign suppliers on our own soil, there has to be something seriously wrong with our domestic regulatory policies. Unless we work on a direct removal of these hurdles, we would keep hurting our own consumers through higher tariffs without preparing our entrepreneurs to challenge the competitors in the global marketplace, which is what is ultimately needed to build the New India Defenders of the revival of protection would probably argue that this time it is different, because the economic environment today is not the same as that under licence-permit raj in the 1970s and 1980s. But haven’t we heard this before? Didn’t our bureaucrats tirelessly tell us prior to 1991 that the experience of Singapore, South Korea and Taiwan didn’t apply to us because we are different?The writer is former vice-chairman, NITI Aayog