Introduction

India's shift to a market-oriented development strategy during the 1990s was made possible by the political skill of elites operating within established, yet flexible, state and non-state institutions. This often showcased the less democratic elements of the liberal parliamentary tradition – what has been called ‘reform by stealth’. Underhanded tactics, aided by propitious international circumstances during most of the 1990s, may well have sufficed to promote the initial stages of India's process of marketization. But by the end of the decade, the continued deployment of unsavoury dissent-management tactics had revealed themselves as insufficient to the task of consolidating, politically, India's second-generation reform agenda. The new phase represented an attempt to move beyond macro-economic stability and deregulation to the creation of durable structures to mediate state–market interaction – a much more demanding brief.

This chapter argues that second-generation reforms will require not just institutional adaptability, but also for ideas about the market to embed themselves within India's unique ideological context, where a range of political traditions – backed by powerful organizational expressions – appear within the public arena. When politics is examined as more than a machine for processing actor preferences, it becomes visible as a site where fluctuating yet stable relations among competing ideological traditions are also established. This is because the form and legitimacy of markets depend ultimately on the political cultures in which they are embedded.