Introduction

India adopted neoliberal policies in 1991 and broke away from its tradition of state interventionist economic planning since independence. India's new journey coincided with the global ideological and economic hegemony of neoliberalism and the collapse of the Soviet Union and East European socialism. Globally, capitalism was freed from the clutches of Keynesianism and reached a new consensus which was captured under the umbrella of the Washington Consensus. The corporate-dominated Indian media hailed India's transformation from Keynesian state interventionism to neoliberalism. India's policy makers agreed to the Washington Consensus and joined the tide of globalization.

This book would like to point out that the neoliberal policy reform was not based on any political and economic consensus. It was launched in India by a minority government led by the then prime minister P. V. Narasimha Rao and finance minister Dr Manmohan Singh, who is now the country's prime minister. Neither did the Congress Party manifesto during the 1991 parliamentary election promise any neoliberal policy reform, nor was any referendum held on the issue of whether India should go ahead with globalization. Ironically, the neoliberal reform was introduced as a compulsion of the loan conditionality of the International Monetary Fund (IMF). While the Indian government time and again explained its compulsion of borrowing from the IMF, it has not explicitly acknowledged the fact that its transition towards neoliberal reform was due to the loan conditionality.