Post-independence India was one of the classic cases of dirigiste – i.e., state-directed – economic development. Not only was the state highly interventionist, but the economy came to acquire a sizable public sector, especially in areas of infrastructure and basic industries. The “mixed” economy that thus came into being, together with the fact that the polity was characterized by multiparty parliamentary democracy with a largely free press and significant freedom of expression, invested the Indian experiment with a novelty and uniqueness, which attracted worldwide attention and gave rise to a vast theoretical literature. Not only did a rich literature on development planning take shape within India, starting with the celebrated plan models of Professor P.C. Mahalanobis, who was a pioneer theoretician of Indian planning (Mahalanobis 1985; Chakravarty 1987, 1993; Byres 1998), but the class nature of the Indian state, the class character of Indian planning, etc., became matters of intense debate, especially in Marxist and radical circles, both within the country as well as internationally (Lange 1970; Bettelheim 1968; Kalecki 1972; Kurian 1975; Mitra 1977).

India's transition in 1991 to a program of “structural adjustment,” which entails a regime of “liberal imports,” a progressive removal of administrative controls, including a move to “free markets” in foodgrains and a whittling down of food subsidies, a strictly limited role for public investment, the privatization of publicly owned assets over a wide field, an invitation to multinational corporations (MNCs) to undertake investment in infrastructure under a guaranteed rate of return, and financial liberalization that would do away with all priority sector lending and subsidized credit, is an event therefore of great historical significance.