Socio-economic Dimensions of Globalization in India

Introduction: After Independence, the managers of the Indian economy took very cautious steps. They found the world sharply divided into two blocs: the one led by the capitalist economies (the US in particular) and other led by the communist economies, primarily the then USSR. There was a cold war between these two blocs. Lessdeveloped economies had no option than to join either of the two and invite the ire of the opposite bloc. Especially those economies that were under the British Empire and won freedom in the near past faced a difficult choice. India chose to keep a safe distance from both the blocs by inventing the idea of a mixed economy. In doing so, India invited as much favor as suspicion from both the blocs. Some economists hold the opinion that the Indian economy was pro-capitalism in its core that wore the façade of a socialistic economy. The state-managed economic endeavors facilitated capital formation in the private sector, often at the cost of the public sector and resources, preparing for a smooth transition to open capitalism in future when the conditions were ripe for such a transition. Bardhan (1984) has given a vivid picture of this possibility. Nevertheless, the officially proclaimed management policy of the national economy of India was modeled on the socialistic pattern, primarily that of the USSR.