The Development of the System of Economic Policy

India’s system of government and economy displays features so singular that it hardly seems possible to classify it among the categories in current usage. In the political economy of developing countries, India has given occasion to coin new terms characterizing systems of this type. What terms like “mixed economy”, “intermediate regime” (Kalecki), or “soft state” (Myrdal) have in common is that they raise their hybrid character to the level of a defining characteristic. In India, the following constellations are likely to have been responsible for this impression: – India’s independence in 1947 meant the emergence of the world’s most populous democracy. This form of government presupposes theoretically a certain degree of homogeneity of the population forming the state, and this population should feel bound through certain fundamental inalienable values. Yet India’s populace, strongly segmented across linguistic and cultural lines, by no means meets this requirement.77 Its federalist organization into 23 states and 8 union territories, basically in keeping with linguistic criteria, may do justice to these disparities. The federal element of India’s constitution is, however, largely counteracted by a strongly centralist administration.