Planning and Markets in Indian Development Process

This paper traces the rationale for the post-1991 shift in the Indian development strategy from a public sector dominated, autarchic industrialization to a market driven industrialization based on private initiative and greater integration with the international economy. It is argued that this shift was primarily made in order to put the Indian Economy on a rapid growth path that has proved to be a powerful instrument for making a durable dent on the longstanding problem of absolute poverty. The shift was also necessitated by the unworkability of the pre-1991 direct discretionary control regime that had to accept an uneasy and often overhearing presence of the functioning markets and private ownership of means of production that was an inevitable consequence of the democratic political framework accepted at the time of independence.