4 SOCIAL SCIENTIST unational corporations, state investment in key infrastructure sectors: all these were directly essential for the domestic bourgeoisie embarking upon accelerated capitalist development. To be sure, the contours of state intervention varied across countries, depending upon the class-configuration within each country. While in some countries, eg., in Pakistan, as indeed in Japan in an earlier period, a policy was pursued of handing over enterprises bpiltup through state investment to the private capitalists, in others eg., India, where working class and petty-bourgeois opinion prevented such a course, state investment gave rise to the formation of a public sector, or a state capitalist sector. That the state capitalism, enjoying a degree of relative autonomy vis-a-vis imperialism, was widely recognised; there were no doubt a few who mistook this process of relatively autonomous capitalist development for an advance along a socialist course, but discerning observers on the Left generally avoided this trap. The more prevalent misconception lay elsewhere. Just as the adoption of Keyne-sian demand management created the illusion even among .sections of the Left that capitalism was rendered crisis-free, that however morally abhorrent capitalism might be as a system it had acquired thfe ability to manipulate its inner contradictions, like-wise large-scale state intervention and regulation of Ac economy in an underdeveloped country like India created the impression that the system no matter how inadequate for solving the pressing social problems, possessed a degree of stability here too. Even an economist as outstanding as Kalecki, in formulating his theory of^intermediate regimes", perceived such regimes as possessing a substantial degree of stability and durability.' Kalecki's characterisation of such regimes has been much controverted; what is even more important however, and has received less attention, is the prognostication about such regimes. The fact that the pursuit of relatively autonomous capitalist development under the impetus of growing investments in the state capitalist sector mayi run into crisis resulting in a change in economic regime in favour oP'liberalisation", of "opening up" of the economy to multinational corporations and banks, was not, and perhaps even to this day is not, adequately appreciated. Previous cases of such transition, eg*, Egypt, Indonesia and Brazil, were treated as sui generis, incapable of sustaining any theoretical generalisations. The political economy of "liberalisation" which is the subject of the present paper must begin therefore by looking at the contradictions which propel the economy towards such a change of regime. Imperialist pressures against the economic regime created, and the economic strategy pursued, in India for a relatively aut6nomous course of capitalist industrialisation have been strong, persistent, and well-documented. There were specific instances of such pressures: eg. the World Bank's efforts to coerce the Government of India to accommodate the oil multinationals; the sustained drive, again spearheaded by the World Bank, to throw open the fertiliser industry for multinational capital, the feet-dragging by the advanced capitalist countries over collaboration for the steel industry which reached its limit with American intransigence over Bokaro, etc. The