CONTROLS IN THE INDIAN ECONOMY 35 of GAS loans without prior clearance from the Reserve Bank of India and so on. The third group of changes appears to have a diametrically opposite character and has appeared in the area of the relation between the private corporate sector and the public financial institutions* Viewed together with the relaxation of licensing and MRTP provisions mentioned above, the intention of intensified control through public financial institutions implies that while the government wishes to rely on private initiative and would remove impediments to enterprise, it is certainly in no mood to give up its controlling leverage over the private sector. The indication here is that the current official philosophy is to have a direct control over private industry, while providing it with a permissive environment to choose the kind and scale of its activities the way it wishes to. Fiscal Crisis of the State These three different types of policy changes at first sight seem to be contradicting one another and are thus somewhat confusing. But it is possible to explain their simultaneous emergence as an outcome of the development process through which the country has passed since independence. The important features of our development process relevant to this discussion may be first stated briefly. The economic and political development of the last 35 years is characterised by the fact that even while promoting the development of capitalism in the country, the state has come to acquire a relative autonomy, deriving in particular from the important arbitrating role it plays not only between the rival exploiting classes (e g, capita^ lists and landlords) but also between these classes and the other organised groups like the professionals, the intelligentsia, petty-bourgeois sections and the organised workers. If we leave aside the institutions of coercion of our state, the other groups of institutions which have emerged and developed are essentially for arbitration and have emerged out of situations of conflict, where, in the relevant field, the state of resource use was monopolised by a particular class (or a segment of it) and the claims of other classes were mounting to critical proportions. Our industrial policy resolutions, MRTP Act and its provisions, the attack on and the abolition of the managing agency system, the Agricultural Prices Commission, the social control of banks leading to their nationalisation etc were results of the state's quest for balancing the claims of contending class interests or sectional forces. Through these developments as the state has grown politically stronger and more capable of handling conflicting claims it has also developed an elite stratum of bureaucracy and intelligentsia and led to its strengthening relative to other classes. This entire' development is an outcome of the nature of the class structure of