Capitalism in India: Out of Nehru's Shadow?

India’s development journey began in the 1950s under the watch of its Fabian socialist prime minister Pandit Jawaharlal Nehru. The planned development model had some crucial elements: importance to the public sector, a policy of exclusion of private sector from strategic areas of operation, centralized economic planning to steer the economy, socialist economic philosophy, neglect of the external sector, and state-led industrialization and modernization. These policy items were in sharp contrast to the one generally advocated in a free-market capitalism that gives more space to individual freedom and risk taking by individuals. However, since 1991 India’s development strategy has witnessed a dramatic change with the adoption capitalistic economic reforms. The private sector has now become the major driver of economic growth and social transformation. India is now a large recipient of foreign capital. The capitalistic philosophy views economic freedom as a prerequisite for sustained economic transformation and enhanced global power. The intellectual influence of Nehruvian socialism however continues to this day among policymakers and the intelligentsia.