The study of India's economy from free market perspective deserves a careful attention. Since 1946, the year of India's political independence, Indian economists have been debating about the most suitable economic system for the country. The three major contenders were the Gandhian model, the Bombay Plan, and the Nehruvian model.
The Gandhian model is based on "village economy" and "trusteeship". The Bombay plan is interventionist. And finally, the Nehruvian model is socialistic. Nehruvian model won and reigned over the next 40 years.
The Indian crisis of the 1990s was simply a product of Nehruvian model. Among many Indian economists, only Bellikoth Ragunath Shenoy saw the destructive destination taken by his country. Shenoy was a student of F. A. Hayek (who was formerly a socialist but changed his mind after studying the writings of Ludwig von Mises) and a member of the prestigious international forum in the tradition of classical liberalism, the Mont Pelerin Society.
At present, the free market ideas of Shenoy such as liberalization and economic globalization are being used by India, which have resulted to two decades of economic growth. Unfortunately, Shenoy remains an economic prophet who hasn't received the honor that is due him from his own people.
This is the summary of the article written by Chandrasekaran Balakrishnan last July 5, 2011.