Social Scientist. v 24, no. 272-74 (Jan-Mar 1996) p. 44.

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New Economic Policy: Indian State and Bureaucracy

The new economy policy of the Narasimha Rao government is situated on a perspective which is fundamentally different from the model of \ economic development of Jawaharlal Nehru and Mrs Indira Gandhi. Any basic shift in the path and strategies of economic development of a country deserves serious analysis because any break With the past cannot be attributed to the subjective feelings of the public policy makers. It is also essential to keep in mind that the Narasimha Rao government did not receive any electoral or popular mandate for the package of new economic policies. The Lok Sabha elections of 1991 were not contested by the Congress party on its economic programme. The political and economic developments of India of the 1990s may be contextualised by linking the domestic scene with global political and economic developments of the post-cold War phase of the 1990s. It deserves to be mentioned that every major global development exercises a direct impact on the functionaries of the Indian state and many a time the distinction between the global and the domestic gets' blurred. The Rao government's policies of global integration of the Indian economy have consciously permitted the global decision-makers to exercise a direct impact on the policy making state apparatuses of India. The very first step of the Rao government in July 1991 was to invite advanced industrial countries to resolve the so-called Balance of Payments crisis of India. The quid-pro-quo between the Rao government and the .advanced industrial countries was that India will open its market to the foreign investors for the resolution of the so-called economic crisis of the 1990s. The Nehru model of economic development of India was based on relative self-reliance, import substitution industrialisation and bargaining with powerful industrial countries on terms and conditions* for foreign assistance in India's economic development. The Nehru model was based on the principle of the

*Centre for Political Studies, Jawaharlal Nehru University, New Delhi.

Social Scientist, Vol. 24, Nos. 1-3, January-March 1996

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