CHAPTER – 1

INTRODUCTION
Liberalism is an ideology whose central theme is individual liberty, private property and
establishment of a society in which an individual can fulfill his ambitions. Liberalism is the
product of the breakdown of feudalism and in its place the growth of a market or capitalist
society. In its earliest form, classical liberalism tended to attack absolutism and feudal privilege
by advocating constitutionalism. The classical liberalism, in the form of economic liberalism
extolled the virtues of laissez faire. Since the late 19th century onwards, a form of social
liberalism emerged with characteristics of modern liberalism which was inclined more
favourably towards welfare reforms and economic intervention. This form of liberalism is also
known as positive liberalism.
But in the last stage of 20th century, modern liberalism came to halt with the severe
economic crisis. In response to these extraordinary calamities, an entirely new breed of
liberalism i.e. neo-liberalism sought a way forward. It revived old liberalism under the novel
condition of globalization. 1Neo-liberalism is a set of ideas and practices, centered around an
increased role for the free market, flexibility in labour markets and a reconfiguration of state
welfare activities. The ‘rolling-out’ of neo-liberalism as a response to the perceived limitations of
Keynesian or state socialist projects have led to neo-liberalization of ever-increasing aspects of
life in global North, global South and former communist East.2 These countries adjusted their
policies and practices according to neo-liberalism, sometimes voluntarily and sometimes under
compulsive forces.
Neoliberalism is a theory of political economic practices which proposes that human
well-being can best be advanced by liberating individual entrepreneurial freedoms and skills
within an institutional framework. It is characterized by strong private property rights, free
markets, and free trade. The role of the state is to create and preserve an institutional framework
appropriate to such practices. The state has to guarantee the quality and integrity of money. It
must also set up those military, defence, police, and legal structures and functions which are

1
Andrew Heywood, Key Concepts in Politics, Palgrave Macmillan Press Limited, New York,
2000, p. 60.
2
Adrian Smith, Alison Stenning and Katie Willis, Social Justice and Neoliberalism- Global
perspectives, Zed Books, New York, 2008 , p. 1.

1
required to secure private property rights and to guarantee, by force if needed, the proper
functioning of markets. Furthermore, if markets do not exist in areas such as land, water,
education, health care, social security, or environmental pollution, then they must be created, by
state action if necessary. But state should not venture beyond these tasks. State intervention in
markets must be kept to a bare minimum. Deregulation, privatization, and withdrawal of the state
from many areas of social provisions have been all too common.
The advocates of the neoliberalism now occupy positions of considerable influence in
education (the universities and many ‘think tanks’), in the media, in financial institutions, in key
state institutions (treasury departments, the central banks), and also in those international
institutions such as the International Monetary Fund (IMF), the World Bank, and the World
Trade Organization (WTO) that regulate global finance and trade.
Neoliberalism has become hegemonic as a mode of life. It has pervasive effects on ways
of thought at the point where it has become incorporated into the common-sense which many of
us interpret, live in, and understand the world. The process of neo-liberalization has seemingly
entailed much ‘creative destruction’, not only of prior institutional framework and powers (even
challenging traditional forms of state sovereignty) but also of divisions of labour, social
relations, welfare provisions, technological mixes, ways of life and thought, reproductive
activities, attachments to the land and habits of the heart.3
Neoliberalism is a multifaceted phenomenon, the outcome of a whole set of converging
historical determinants, and it is difficult to precisely determine its beginnings. Neo-liberalism
has its roots in classical liberalism, which acquired authority in Britain in the late eighteenth
century and provided the intellectual foundations to the Victorian era. This economic strand of
the British liberal tradition centered on a reaction against the mercantilism of the early modern
period, disseminated by the classical economists Adam Smith, Thomas Malthus and David
Ricardo. Classical liberalism’s advocacy of government constraint and its ideas on property were
particularly suited to the development of a laissez-faire economy. Adam Smith, in particular, is
identified as one of the true founders of liberalism. His free-market economy was first described
in his Wealth of Nations, and was later adopted by F. A. Hayek and the Austrian School and

3
David Harvey, A Brief History of Neoliberalism, Oxford University Press, New York, 2005,
pp. 2-3.

2
became an important founding principle of neo-liberal ideology. Smith’s classical liberal
position, summarized in his famous vision of the ‘invisible hand’, proclaimed that social well-
being would unintentionally but efficiently be served by countless self-interested decisions in the
daily activities of the free market.
Smith asserted that these individual interests, , were naturally harmonious; under a
system of free competition and the operation of the market continually tends to produce prices
as low as these are consistent with supplying the product, while yielding a fair return on the
effort made in its production. This freedom of exchange would produce as much economic
advantage for individuals as the circumstances permit, thus maximizing both individual and
social benefits. Smith never referred to this economic order as capitalism or as free enterprise,
but rather as the ‘natural system of perfect liberty and justice’. 4The origin of neoliberalism as an
ideology can be traced back to the late 1930s when a group of liberal intellectuals met in Paris to
discuss the threat posed not only by totalitarianism, such as National Socialism in Germany, but
also by collectivist planning of the economy as in the British Keynesian state and the New Deal
in the USA. This meeting, held in 1938 and organized by Louis Rougier, led to the coining of the
term ‘neoliberalism’ to update nineteenth century liberalism by introducing the idea that
governments play an important role as guardian of ‘free markets’ by securing the “rule of law”.
The ‘new’ liberalism was the consequence of the incorporation of marginalist economic
thought with critiques of equilibrium theory, both had characterized the emerging Austrian
School of economics. Economics is directly implicated in the two main foundational tenets of
neoliberalism: first, in the view of Ludwig von Mises that ‘egoism is the basic law of society’;
and, second, in Hayek’s view that free markets lead to ‘spontaneous order’ which solve the
problem of economic calculation. Ludwig von Mises and Friedrich von Hayek represent the
founding fathers of neoliberalism, providing the theoretical backbone for the political and
ideological claims. Neoliberalism was very much an ideological project that attempted to counter
the inherent totalitarianism of collectivism and state planning of economy by drawing on
economic theories which, in turn, posited impossibility of economic planning in the first place. 5

4
Rachel S. Turner, Neo-Liberal Ideology - History, Concepts and Policies, Edinburgh University
Press Ltd, Edinburgh, 2008, p. 22.
5
Kean Birch and Vlad Mykhnenko, The Rise and Fall of Neoliberalism: the Collapse of an
Economic Order, Zed Books Ltd, London, 2010, p. 3.

3
 The earliest expressions of the new trends were evident from the end of World War II
when the basic features of the postwar war-torn society and economy were defined. Various
developments surrounding the crisis of the dollar in the early 1970s, such as the floatation of
exchange rates, or the policies enacted during the dictatorships in Latin America in the 1970s,
can be considered early manifestations. In simple terms, neoliberalism was first established in
the United States and the United Kingdom at the end of a decade of crisis in the 1970s, and then
few years later in continental Europe, and then around the globe. 6
Neoliberalism is a sort of attack on Keynesianism and welfare state. Asa Briggs defines ,
“A ‘welfare state’ is a state in which organized power is deliberately used (through politics and
administration) in an effort to modify the playing of market forces in at least three directions –
first, by guaranteeing individuals and families with a minimum income irrespective of the market
value of their work or their property; second by narrowing the extent of ‘social contingencies’
(sickness, old age or unemployment) which otherwise lead otherwise to individual and family
crises; and third by ensuring that all citizens without distinction of status or class are offered the
best standards available in relation to an agreed range of social services.”7
The purpose lying behind this attack on Keynesianism and welfare state was primarily a
concern for taxation and inflation, brought to widespread attention during the stagflation crisis of
the 1970s when both unemployment and inflation rose dramatically. This ‘structural crisis’ of the
falling rate of profit; meant the declining return on capital invested in machines and technology.
Consequently, the only way to increase profit was by controlling labour costs, which means that
neoliberalism can be seen as a political project aimed at restoring class power.
The neoliberal political project was also enabled by the collapse of the Bretton Woods
system in 1971 when the USA ended the convertibility of dollars to gold, ushering in a new era
of free-floating currencies and international capital flows. The 1970s therefore provided the
political opportunity to push for a new economic project founded on neoliberal assumptions
about economic efficiency, reduced state intervention and free markets.

6
Gerard Dumenil and Dominique Levy, The Crisis of Neoliberalism, Harvard University Press,
London, 2011, pp. 7-8.
7
Alfredo Saad-Filho and Deborah Johnston, Neoliberalism - A Critical Reader, Pluto Press,
London, 2005, p. 142.

4
 This economic project found its advocates among a number of new right-wing politicians
around the world exemplified by Margaret Thatcher (1979–90) in the UK and Ronald Reagan
(1981–89) in the USA, whose policies became known respectively as Thatcherism and
Reaganomics. Other countries have followed suit by implementing neoliberal policies, whilst
some started even earlier than the UK and USA. For example, the ‘Chicago boys’ – Chilean
economists trained at the University of Chicago where Milton Friedman worked – helped the
dictator Augusto Pinochet to privatize and deregulate the economy after the coup that ended
Salvador Allende’s government and life in September 1973. Although the spread of neoliberal
economic policies around the world has been uneven, and each country had witnessed varying
levels of ideological and political adherence to different economic policies, what has
characterized them all has been an emphasis on five core principles:
 privatization of state run assets;
 liberalization of trade in goods and capital investment;
 monetarist focus on inflation control and supply-side dynamics;
 deregulation of labour and product markets to reduce ‘impediments’ to business;
 marketization of society through public–private partnerships and other forms of
commodification.
These principles are all meant to enable individual freedom through recourse to a ‘free’
market that is efficient in allocating resources across society and the world because only the
market can coordinate all the information signals from numerous agents (such as sellers and
buyers).8
The different scholars have interpreted this concept in different ways. Some of them have
negative view points and some have positive view points. The international neoliberal order-
known as neoliberal globalization was imposed throughout the world, from the main capitalist
countries of the center to the less developed countries of the periphery, often at the cost of severe
crises as in Asia and Latin America during the 1990s and after 2000. The main political tool is
always the establishment of a local imperial-friendly government. The collaboration of the elites
of the dominated country is crucial, as well as, in contemporary capitalism, the action of

8
Kean Birch and Vlad Mykhnenko, op.cit., pp. 4-5.

5
international institutions such as the North Atlantic Treaty Organization (NATO), International
Monetary Fund (IMF), the World Bank (WB), and the World Trade Organization (WTO).
Economically, the purpose of this domination is the extraction of a "surplus" through the
imposition of low prices of natural resources and investments abroad and foreign direct
investment. That countries of the periphery want to sell their natural resources and are eager to
receive foreign investment, just as when, with in a given country, workers want to sell their labor
power, the ultimate source of profit.9
By early 1990s, however, left-leaning critics of market reforms in the global South had
imbued ‘neoliberalism’ with pejorative meanings associated with the ‘Washington Consensus’ –
a set of economic institutions and policies alleged to have been designed by the United States to
globalize American capitalism and its associated cultural system. Other critics saw it as a
postmodern version of quaint 18th-century ‘laissez-faire talk’ glorifying individual self-interest,
economic efficiency, and unbridled competition. In spite of these criticisms, however,
neoliberalism has stuck in the public mind. Today, it appears almost daily in the headlines of the
world’s major newspapers.
‘Neoliberalism’ has been associated with such different political figures as Ronald
Reagan, Margaret Thatcher, Bill Clinton, Tony Blair, Augusto Pinochet, Boris Yeltsin,
Australian Prime Minister Malcolm Fraser, Canadian Prime Minister Brian Mulroney, Jiang
Zemin, Manmohan Singh, Junichiro Koizumi, John Howard, and George W. Bush. But not one
of these political leaders has ever publicly embraced this ambiguous label – although they all
share some affinity for ‘neoliberal’ policies aimed at deregulating national economies,
liberalizing international trade, and creating a single global market.
In its heydays during the 1990s, neoliberalism dominated the world like a colossus. It ate
its way into the heart of the former Soviet bloc. It confronted countries of the global South with
the new rules and conditions for their economic development. Showing itself to be a remarkably
versatiledevice, neoliberalism even charmed the post-Mao Chinese Communist Party cadres
whose reformed ‘socialism with Chinese characteristics’ looks suspiciously like its supposed
ideological rival. Their fervent campaign to put an end to Keynesian-style ‘big government’
distinguished Reagan and Thatcher from many other neoliberals. It was their remarkable resolve

9
Gerard Dumenil and Dominique Levy, op.cit., p. 9.

6
to stand by their principles even when it was politically risky or inconvenient to do so. These
political leaders not only articulated the core ideological claims of neoliberalism but also sought
to convert them into public policies and programmes.
For example, when some conservative members within Thatcher’s own Tory Party stated
that they could no longer tolerate her tough anti-inflation policies, she boldly declared, ‘You turn
if you want to – This Lady is not for turning’. Indeed, the ‘Iron Lady’ was famous for coining
other ideological slogans such as ‘There Is No Alternative’ (to her neoliberal agenda). Although
political Left in Britain lost no time in assailing such an economic determinism, it nonetheless
failed to assemble an alternative political vision that would prove the Prime Minister wrong. 10
Neo-liberalism has the belief that the market should be the organizing principle for all
political, social, and economic decisions, neoliberalism wages an incessant attack on democracy,
public goods, and non-commodified values.’ The ascendency of neoliberalization has brought
with it important implications for social justice, as the ‘privatization of everything’ constructs a
landscape of winners and losers and gives rise to a range of social justice movements contesting
and coping with the neoliberal ‘revolution’.
Trumpeted with the rhetoric of TINA (There Is No Alternative) the neoliberal orthodoxy
has become the dominant ideology today in restructuring the periphery of global capitalism. The
neo-liberal orthodoxy places side by side, a new set of conditionality as part of its hegemonic
agenda on the developing world: privatization, flexible labor markets, financial de-regulation,
central bank independence, flexible exchange rate regimes, and fiscal austerity.
To meet this aim, integration of the developing nation’s economies into evolving a
capitalist system, has already been achieved through a series of policies aimed at liberalizing
their financial sectors and privatizing major industries.
The neoliberal ideology attempted to explain the motives behind financial liberalization
is arguing that such measures would restore growth and stability by raising savings and
improving economic efficiency. But the major consequence has been the exposure of these
economies to speculative short term capital (hot money) attacks which increase instability and
result in a series of financial crises in the developing countries.

10
Manfred B. Steger and Ravi K. Roy, Neoliberalism - A Very Short Introduction, Oxford
University Press Inc., New York, 2010, pp. X-XI.

7
 As a result, developing economies with weak financial structures and shallow markets
suffer from increased volatility of output growth, short-sightedness of investment decisions and
financial crises with severe economic and social consequences. Often the economic crises were
realized hand in hand with the ensuing political crisis. All these lead to severe contraction of
labor incomes and increase unemployment together with marginalization of the work force, and
result in violation of basic labor rights in trade union activity, deprivation of rights to engage in
collective bargaining and participatory democracy.
With the recent attempts towards full liberalization of the capital account under pressures
from the US and the IMF (the so-called Washington consensus), governments have lost their
independence in designing a strategic mix of these instruments for promotion of
industrialization/development targets. As open capital markets replaced closed short term capital
markets and regulated flows of foreign investment, governments became unable to employ their
traditional policy instruments (interest rates, government expenditures, and exchange rates)
unilaterally. 11
Neoliberal globalism is not at all a model of ‘economic deregulation’, and it does not
promote ‘private initiative’ in general. Under the ideological veil of non-intervention,
neoliberalism involves extensive and invasive interventions in every area of social life. It
imposes a specific form of social and economic regulation based on the prominence of finance,
international elite integration, subordination of the poor in every country and universal
compliance with US interests.
Although it enhances the power and the living standards of the global elite and its
appendages, it is destructive for the vast majority. Domestically, the expansion of ‘market
relations’ infringes the rights of access to food, water, education, work, land, housing, medical
care, transportation and public amenities as well on gender relations.
Laws are changed to discipline the majority, restrict their rights of association and make
it difficult to protest against the consequences of neoliberalism and to develop alternatives. The
police, the courts and the armed forces are available to quash protests in the ‘new democracies’

11
Ahmet Kose, Fikret Senses and Erinc Yeldan, Neoliberal Globalization as New Imperialism :
Case Studies on Reconstruction of the Periphery, Nova Science Publisher Inc., New York, 2007,
p. 4.

8
such as Bolivia, Ecuador, Nigeria, South Africa, South Korea and Zambia, as well as in ‘old
democracies’ such as France, India, Italy, Sweden, the United Kingdom and the United States.
Democracy is everywhere limited by the rights of global capital to seize the land and
exploit its people. An increasing share of global profits is being pumped into the rich countries,
especially the United States. These transfers increase the pressure on the periphery, where rates
of exploitation must increase sharply in order to support extraordinary levels of elite
consumption domestically as well as in the United States. In other words, neoliberalism is a
hegemonic system of enhanced exploitation of the majority. This exploitative agenda is
primarily but not exclusively the outcome of a shift in the power relations within (and between)
countries. It is also the outcome of technological changes, especially cheaper international
transportation, communications and computing power, the internet, the emergence of ‘flexible’
production, greater international integration between production chains and in the financial
markets, and so on. These material changes responded to existing social changes at least as much
as they induced them. 12
During the transition between the 1970s and 1980s, the functioning of capitalism was
deeply transformed, both within countries of the centre and in the periphery. The earlier capitalist
configuration is often referred to as the ‘Keynesian compromise’. Without simplifying too much,
those years could be characterised, in the centre countries – the United States (and Canada),
Europe and Japan – known by large growth rates, sustained technological change, an increase in
purchasing power and the development of a welfare system (concerning, in particular, health and
retirement) and low unemployment rates. The situation deteriorated during the 1970s, as the
world economy, in the wake of the decline of the profit rate, entered a ‘structural crisis’. Its main
aspects were diminished growth rates, a wave of unemployment and cumulative inflation. This is
when the new social order, neoliberalism, emerged, first within the countries of the centre –
beginning with the United Kingdom and the United States – and then gradually exported to the
periphery. 13
Whether economic change in Asia was driven by imperatives forced upon countries by
the dynamics of globalization or was deliberately adopted by these market-oriented leaders to

12
Alfredo Saad-Filho and Deborah Johnston, Neoliberalism - A Critical Reader, Pluto Press,
London, 2005, pp. 4-5.
13
Ibid, p. 9.

9
suit their own political objectives, there has been a remarkable shift toward neoliberalism in the
region in the last two decades. This ongoing transformation has not been a uniform process;
different nations have found unique ways of partaking in an increasingly global marketplace.
Distinct neoliberal adaptations have been evolved within highly differentiated political-economic
systems. 14
India adopted neo-liberalism in 1990s. From its independence and through the
promulgation of its constitution and formal inauguration as the Republic of India in 1950, India
has maintained its commitment of secular democracy and is widely acknowledged as the largest
functioning democracy in the world. This commitment requires a multifaceted strategy to
achieve national integration by negotiating the oft-muddied waters of regionalism, linguistic
diversity, and religious multiplicity and the huge gap between rich and poor in the new nation.
An essential underpinning to convert the anti-colonial posture of pre-independence into the
construction of a well-functioning state was integration of the former British India with the
princely states.
Under Jawaharlal Nehru (1889–1964), who served as prime minister from 1947–1964,
and the one-party dominant system provided by the Indian National Congress in free India’s first
two decades, India embarked on an ambitious program of Socialist-oriented economic planning
designed to expand and modernize its industrial capacity. The results were mixed. Hamstrung for
many years by the residual license Raj inherited, India finally liberalized its economy in the
1990s, and the results have been dramatic. P. V. Narasimha Rao became prime minister on June
1991 and served until May 16, 1996. He begun an economic reform program that involved
liberalization, privatization, and globalization. 15
With the onset of macroeconomic reforms in the 1990s, the state-led developmental plans
seem to have lost their significance in a situation where the non-state actors became critical in
redefining the state agenda. Economic liberalization in India ushered in reforms ‘by stealth’ as it
was more or less accepted as a fait accompli to avoid massive balance of payment crisis in 1991.
Apart from the domestic compulsion, internationally, two major events undermined ‘the
basic premises of the earlier social consensus regarding the development strategy’. The first was

14
Manfred B. Steger and Ravi K. Roy, op.cit., p. 97,
15
Arnold P. Kaminsky and Roger D. Long, Editors, India Today, ABC-CLIO, California, 2011,
p. 9.

10
the collapse of the former Soviet Union and its East European satellite states, which moved
towards ‘a market-oriented economic system’ eschewing altogether the model of planned
economic development. Second, the spectacular success of ‘the socialist market economy’ of
China with the opening of the economy since 1978 and its concomitant favourable economic
outcome has cast serious doubts on India’s development strategy, based on economic
nationalism.
When conceptualizing the impact of economic reform in India, in a significant way, the
institutional legacy of ‘a well-entrenched state’ affected the post-reform possibilities in India. As
a commentator argues, ‘India’s bureaucratized regime – the license-quota-permit raj – has had
major, unintended consequences on post-transition patterns: all [state] governments and central
regimes continued to rely on state-led strategies of reform; there was no “Washington
Consensus” or “neo-liberal” route to reforms in India’. There is no doubt that economic reforms
brought about radical changes in India’s political economy. Yet the old regulatory regime of the
bygone era remained critical in the path and processes of liberalization in a very decisive way.
Seeking to articulate the typical Indian response to liberalization, the 1991 Industrial
Policy Resolution suggested several steps to ‘unshackle the Indian industrial economy from the
cobwebs of unnecessary bureaucratic control’, though within the overall control of the state.
Four specific steps were recommended in this behalf:-
First, the government decided to abolish ‘industrial licensing policy’ except for a short
list of industries related to security and strategic concerns, social concerns, hazardous chemicals
and overriding environmental considerations.
Second, the government also endorsed ‘direct foreign investment up to fifty-one percent
foreign equity in high priority industries’. To avoid bottlenecks, an amendment to the 1973
Foreign Exchange Regulation Act was suggested to be changed.
Third, it was also decided to withdraw protection of ‘the sick public sector units’ and
there would be ‘a greater thrust on performance improvement’ to ensure accountability of those
involved in these state-sponsored enterprises.
Finally, the 1991 Policy sought to remove ‘the threshold limits of assets in respect of
those companies functioning under the MRTP (Monopolies and Restrictive Trade Practices)
Act’. By seeking to amend this act, the 1991 Policy suggested elimination of ‘the requirement of
prior approval of the Union Government for establishment of new undertakings, expansion of

11
undertakings, mergers, amalgamations and take over and appointments of Directors under certain
circumstances’.
The Nehruvian socialist pattern of society cannot be so easily dispensed with due to
historical reasons, and globalization may not be an appropriate strategy for economic
development in a poor country such as India because in its present form, argues Joseph Stiglitz, it
seems like ‘a pact with the devil’. A few people may have become wealthier but, for most of the
people, closer integration into the global economy ‘has brought greater volatility and insecurity,
and more inequality’.
Economic liberalization is thus a double-edged device that, while improving the lives of
some Indians, has also left millions more untouched. Hence, it has been rightly pointed out that
the essence of economic liberalization in India can be captured by a Buddhist proverb suggesting
that ‘the key to the gate of heaven is also the key that could open the gate to hell’. Indeed, the
danger and opportunity are so intricately intermingled in economic reforms that ‘the journey to
the promised land of economic prosperity could easily turn into a hellish nightmare of poverty
and widening inequality for the majority’. 16
The new Narasimha Rao government formed in June 1991 was once more a minority
government. The Congress party had only narrowly missed gaining a majority, and since the
situation which it had to face was so desperate, ‘toleration’ was bound to be almost unlimited,
because no other party would wish to take the responsibility for the unpopular measures which
the new government had to introduce. P.V. Narasimha Rao, a veteran Congress leader who had
wanted to retire from politics had to shoulder the burden of becoming the Prime Minister at this
most critical juncture. He joined forces with an equally remarkable Finance Minister, Dr.
Manmohan Singh, an eminent economist who knew how to restore confidence in the Indian
economy. Narashima Rao, the reform-minded Prime Minister lost no time in appointing the
Oxford-trained economist Manmohan Singh, Finance Minister, empowering him to launch a
sweeping set of neoliberal reforms that would dramatically alter the country’s economic
landscape. India presented itself under new management and overcame the crisis very rapidly. 17

16
Bidyut Chakrabarty, Indian Politics and Society since Independence, Routledge – an imprint
of Taylor & Francis, New York, 2008, pp. 25-26.
17
Dietmar Rothermund, An Economic History of India from Pre-Colonial Times to
1991,Routledge - an imprint of the Taylor & Francis, New York, 2003, pp. 169-171.

12
 India’s mixed economy meets market globalism, it has recorded an impressive average
GDP growth rate. This economic achievement, however, came hand-in-hand with widening
disparities of income and well-being in the wake of an unprecedented set of neoliberal reforms.
But this ‘Indian miracle’ must be understood within the context of the country’s economic
development, which occurred in three historical stages: the socialist era (1947–84); the period of
what economist Arvind Panagariya has called ‘liberalization by stealth’ (1984–91); and current
stage of what economist Jagdish Bhagwati has termed ‘reform by storm’ (1991 to present).
Viewing the crisis as an historic opportunity to ‘build a new India’, Manmohan Singh
argued that it was essential to terminate ‘outmoded’ commitments to Nehru’s economic
nationalism. Spouting with gusto French novelist Victor Hugo’s line that ‘no power on earth can
stop an idea whose time has come’, the then new Finance Minister promised to realize his
neoliberal vision by building on his country’s vast and cheap labour markets, its growing number
of educated, but unemployed, professionals, and its considerable natural resources. Neoliberal
reforms enacted in India since 1991 has:
 Rescinding state licence requirements for most industries.
 Cutting the tariff rate on imports.
 Exchange rate liberalization, increasing the convertibility of the rupee.
 Courting foreign direct investment by easing restrictions.
 Removing limits on large corporations to compete in new economic sectors.
 Privatization of state-owned industries.
 Lowering the cash reserve requirements. 18
The foregoing new trends in the Indian state have had a considerable corrosive impact on
whole system for instance on the education system, media and environment, health, and culture
etc. The education system is the key parameter in the growth strategy of any nation. India can
take a pride in claiming itself to be one of the largest educational systems among developed
countries of the world after US and China with reputation having universities like Nalenda and
Taxila in early times. After the independence, education was the most important factor for nation
building of India because in such a diverse society, most of people were poor and illiterate. In
1991, after the adoption of neo-liberalism, Indian education has experienced huge

18
Manfred B. Steger and Ravi K. Roy, op.cit., pp. 90-93.

13
transformations as it opens up to the private sector and made it an expensive commodity. The
purpose of education remains not to educate people but profit only. Under the present study, an
effort has been made to analyze the impact of neo-liberal policies on the major sectors in India.
SIGNIFICANCE OF THE STUDY
Neoliberalism has become one of the most pervasive ideologies of the 21 st century. It was
a major shift in liberal tradition and was implemented by almost all the countries of world. Its
pervasiveness is evident not only by its unparalleled influence on the global economy, but also
by its power to redefine the very nature of politics itself. Based on free market access, open trade
and free flow of capital, goods and services, Neoliberalism is attack on democracy, public goods,
the welfare state, and non-commodified values. Under neoliberalism, everything has become
commodity for profit. It has widened gap between rich and poor. India is no exception to these
challenges. This global ideology has changed the very nature of Indian state from welfare state to
market oriented state after 1990s when India adopted neoliberal policies. Neo-liberalism has laid
impact on every dimension of human life – social, economic, political, cultural and ecological
and many harmful and devastating consequences have been seen. Education has become profit
oriented and so expensive that it is beyond the reach of common man. In the name of
development, natural resources are being exploited. But no effort has been made to study the
impact of Neo-liberalism on nature of Indian state earlier. Therefore, it has become imperative to
explore and study the areas which have been affected by the neo-liberal policies. Hence an effort
has been made by the present researcher to fill that gap.
REVIEW OF LITERATURE
The review of literature acts as a searchlight to guide the course of prospective research
actively. A considerable amount of good and relevant literature concerning the problem “Neo-
liberalism and Changing Nature of Indian State” has been reviewed analytically. A number of
studies, however, need special mention as these throw light on the problem under study and these
are written below;
Vijay Joshi and I.M. D. Little’s book, India's Economic Reforms 1991–2001 (1996)19,
is a follow up study to an earlier work tracing India’s economy up to 1991. The focus of this

19
Vijay Joshi and I.M. D. Little, India's Economic Reforms 1991–2001, Oxford University Press
Inc., New York, 1996.

14
book is on the economic reforms introduced after the financial crisis of 1991. The new
government moved swiftly and announced a programme of macroeconomic stabilization and
structural adjustment. The new government was that of P. V. Narasimha Rao, who formed a
minority government after Congress(I) had won 226 seats in the Lok Sabha in the June elections
following the assassination of Rajiv Gandhi. The authors have examined the different areas of
economy and outlined the successes and effects of reform measures. They have utilized
economic theory and knowledge to suggest ways to liberalize the economy and open up the
market to revitalize the Indian economy alongside these reforms already implemented. The book
concludes with the predictions of the future of economic reforms and what sectors should be the
priorities for prospective development.
Ranbir Vohra’s book, The Making of India - A Historical Survey (1997)20, focuses on
India's Secularity and the Politics of Communalism. The author traces the history of India in
detail and Indian civilization is noted for its historical continuity and for the fact that elements of
Indian tradition are so firmly embedded in the country's culture that they persist in influencing
contemporary social and political behavior. The book is divided into three parts. Part I deals with
pre-modern India from pre-history to 1857. Part II studies the period India under the British,
1858-1947 and the establishment of a non-secular polity and constitutionalism and the politics of
communalism. Part III explores Independent India and its search for National Identity. The
author explains the Jawaharlal Nehru era, 1947-1964 in detail. The author describes Indira
Gandhi era, 1966-1984 as Authoritarianism and New Communalism, in the concluding chapters
focus is on the decline of the Congress, 1985-1996 and emergence of Hindu Nationalism.
Rob Jenkins’s book, Democratic Politics and Economic Reforms in India (1999)21, is a
well-argued, accessible and often controversial examination of the relationship between
democracy and economic liberalization. The book deals with key debate able issues like the
nature of civil society and the functionality of political institutions. The book traces the roots of
evolution of economic reforms in India in detail. It also establishes theoretical and comparative
perspectives on the politics of economic reforms in 1990s. The successive Indian governments
from a variety of political persuasions have remained committed to market-oriented reforms

20
Ranbir Vohra, The Making of India - A Historical Survey, M.E. Sharpe, New York, 1997.
21
Rob Jenkins, Democratic Politics and Economic Reform in India, Cambridge University Press,
New York, 1999.

15
since their introduction in 1991. The author reveals the political incentives like elite perceptions
and the calculus of survival. Political institutions as federalism, informal networks, and the
management of dissent after adoption of neoliberal policies also remain a focus of this book. By
focusing on formal institutions such as party and electoral systems, existing research ignores the
value of informal political institutions. In India these institutions have driven economic elites
towards adaptation, negotiation and compromise, while allowing governing elites to divide
opponents of reform through a range of political mechanizations. These include shifting blame,
surreptitiously compensating selected interests, betraying the trust of political allies, and
cloaking policy change in the guise of continuity. The concluding chapters reveal political skills
of introducing reforms by stealth means and Implications. Rather than simply denouncing
democracy’s dark underside, Jenkins argues that promoting change routinely requires
governments to employ the underhand tactics and impure motivations which all politics breed
which only democracy can tame.
Robert Went in his book, Globalization - Neoliberal Challenge, Radical Responses
(2000)22, holds that a positive way out of the deadly, contemporary economic and social dynamic
is conceivable. Such a positive alternative requires putting in question globalization and free
trade as well as the dictatorship of the market. Never before has there been such a gap between
what is possible and what is actually happening. A drastic redistribution and democratization of
means, resources and structures still offers to us a world to win. In place of the widespread idea
that society can no longer be changed, left organisations, the trade union movement and other
social movements must find ways to restore hope and rebuild a credible, social, ecological,
feminist and internationalist alternative. This is not simple task, but it is quite important. This
book is meant to make a modest contribution to the urgent work of puncturing the myths of the
reigning economic orthodoxy and putting new ideological weapons in the hands of organisations
and movements which want change.
Joseph E. Stiglitz and Shahid Yusuf’s book, Rethinking the East Asia Miracle
(2001)23, have suggested to take a fresh look at the regional experience during the 1990s and to

22
Robert Went, Globalization - Neoliberal Challenge, Radical Responses, Pluto Press, London,
with The International Institute for Research and Education (IIRE), 2000.
23
Joseph E. Stiglitz and Shahid Yusuf, Rethinking the East Asia Miracle, A co-publication of the
World Bank and Oxford University Press, New York, 2001.

16
extend and revise as necessary the findings of the World Bank’s East Asian Miracle, published
in 1993. The book assesses the evolving experience with industrial policies in the forms
implemented by individual countries in East Asia. It examines in depth how the Chinese
experience meshes with those of other economies in the region—a dimension that was absent in
the East Asian Miracle. An understanding of East Asian development requires to have grips with
the political economy of change, with governance, and with the roles of key institutions. The
book examines each of these carefully, thereby offering a reading of East Asia’s economic scope
that is deep, analytically rigorous, and carefully nuanced. The book offers a searching eye over a
landscape made less familiar by an unforeseen event of utmost severity.
Joseph E. Stiglitz in his book, Globalization and its Discontents (2002)24, has analysed
various discontents regarding globalization. The author has found that Globalization today is not
working for many of the world's poor. It is not working for much of the environment and not
working for the stability of the global economy. The transition from communism to a market
economy has been so badly managed that poverty has soared as incomes have plummeted. In this
book, the author criticises the role of international economic institutions – WB (World Bank),
WTO (World Trade Organisation), and IMF (International Monetary Fund) etc. because of their
biased working. These institutions (WB and IMF) are established at Breton Woods’s conference
and known as ‘twin sisters’ for the reconstruction of Europe after the first World War. But now
these institutions turn their focus on third world countries. These institutions, which are
dominated by developed countries, promise the third world countries to provide loans for their
development and to meet their economic crises but they have broken their promises and
worsened the conditions of developing countries. The shock therapies and structural adjustment
programmes given by them prove very dangerous for the third world countries.
Dietmar Rothermund in his book, An Economic History of India from Pre-Colonial
Times to 1991 (2003)25, has portrayed the process of India’s economic history as a fascinating
drama. This book has followed a chronological order. The earlier periods of India’s economic
history before British rule have been outlined only in a summary fashion and the nineteenth

24
Joseph E. Stiglitz, Globalization and its Discontents, W. W. Norton & Company, Inc., New
York, 2002.
25
Dietmar Rothermund, An Economic History of India from Pre-Colonial Times to
1991,Routledge - an imprint of the Taylor & Francis, New York, 2003.

17
century has also been treated rather briefly; the main emphasis is on the first half of the twentieth
century, which was punctuated by two world wars and the intervening depression. The year
1947, in which India achieved independence, has not been regarded as a convenient terminal
point for this economic history of India. The independent republic has been for emphasized
irrigation and industrial production so as to escape from this fate. After some progress was made,
a serious drought proved to be a severe setback. In subsequent years, the Indian economy grew
only at a moderate rate, just enough to support the growing population, which will be about one
billion by the end of the present century. A recent upswing in industrial growth and surplus
production of the major food grains seems to usher in a brighter future, but many problems have
still to be solved.
Joseph E. Stiglitz in his book, The Roaring Nineties –Seeds of Destruction (2003)26,
has analysed the phase of nineties and the changes that occurred during this decade. This book is
not just a rewriting of the economic history of nineties, though it is as much a story of the future
as of the past. The book performs a non-partisan job of showing what went right and what went
wrong in the 1990s. In particular, this book is helpful for thinking about how politics and
economics interconnect each other. The author analysed that there are many value judgements
that need to be examined, politically as these cannot be determined purely economically. It is
about where America and other developed countries find themselves and the direction they
should go. The writer reveals that the seeds of destruction of third world or developing countries
were sown in the roaring nineties.
Lisa Duggan’s book, The Twilight of Equality? - Neoliberalism, Cultural Politics, And
The Attack On Democracy (2003)27, is an analysis of the politics of the 1990s, and is a polemic
for the twenty-first century, to argue that as long as the progressive-left represents and
reproduces itself as divided into economic vs. cultural, universal vs. identity-based, distribution
vs. recognition-oriented, local or national vs. global branches, it will defeat itself. From the
1930s to the 1960s, a very limited form of welfare state liberalism, or social democracy, shaped
the U.S. nation state and the political culture supporting it. During the 1950s and 1960s, criticism

26
Joseph E. Stiglitz, The Roaring Nineties –Seeds of Destruction, Allen Lane-Penguin, London,
2003.
27
Lisa Duggan, The Twilight Of Equality? - Neoliberalism, Cultural Politics, and The Attack On
Democracy, Beacon Press, Boston, 2003.

18
of the U.S. welfare state from both the right and the left intensified. Conservative anti-statist
attacks on New Deal social welfare programs mounted, as the new social movements pressed
from the left for more equitable distribution of many kinds of resources. Then during the 1970s,
the social movements encountered a new pro-business activism that ultimately seized the
primary institutions of the state over the next two decades. This pro-business activism, the
foundation for late twentieth century neoliberalism, was built out of earlier "conservative"
activism. In general, too few on the left have noticed that as neoliberal policies continued to
shrink the spaces for public life, democratic debate, and cultural expression during the 1990s,
they were doing this through their own versions of identity politics and cultural policies. The
critiques of global capitalism and neoliberalism, and left populist or universalist politics within
the U.S., attack and dismiss cultural and identity politics at their peril. In addition, they drive
constituencies seeking equality away, toward the false promises of superficial neoliberal
"multiculturalism." In other words, they help to create what they fearfully or critically imagine.
Manfred B. Steger’s book, Globalization-A Very Short Introduction (2003)28, is an in-
depth study on the concept of globalization. In this book, the author has explained the
phenomenon of present changes and give meaning and historical background of globalization in
a comprehensive manner. The writer has highlights various dimensions of globalization such as
political, economic, social, cultural, ideological and religious. He has given critical assessment of
globalization and discussed the future of it. This book provides relevant material for the present
study. It also examines that globalization is best thought of a multidimensional set of social
processes that resist being confined to any single thematic framework. Indeed, the transformative
powers of globalization creep deeply into the economic, political, cultural, technological, and
ecological dimensions of contemporary social life.
Alfredo Saad-Filho and Deborah Johnston’s book, Neoliberalism - A Critical Reader
(2005)29, critically examines neo-liberalism from widely different angles and also examine its
origins, nature and implications from the perspective of radical political economy. The book
consists of 30 essays which are divided into three groups, including theoretical, applied and

28
Manfred B. Steger, Globalization - A Very Short Introduction, Oxford University Press Inc.,
New York, 2003.
29
Alfredo Saad-Filho and Deborah Johnston, Neoliberalism - A Critical Reader, Pluto Press,
London, 2005.

19
historical chapters. They represent the Marxian, post-Keynesian and Kaleckian schools of
thought. These essays also offer a radical critique of neoliberalism, which goes to the root of the
matter. The writers show that neoliberalism is part of a hegemonic project concentrating power
and wealth in elite groups around the world, benefiting especially the financial interests within
each country, and US capital internationally. Neoliberalism strongly influences the lives of
billions of people in every continent in such diverse areas as economics, politics, international
relations, ideology, culture and so on. Ina short span of time, neoliberalism has become
widespread and influential, and it has deeply intermingled with critically important aspects of
life. The book highlighted the popular movements that have emerged and successfully
challenged the neoliberal hegemony which show that neoliberalism is not invulnerable.
Ray Kiely in her book, Empire in the Age of Globalisation - US Hegemony and
30
Neoliberal Disorder (2005) , has examined the relationship between US hegemony,
contemporary imperialism and globalisation. Specifically, she has examined the claims that the
more belligerent foreign policy of the US state since the terrorist attacks in September 2001
constituted a significant departure from ‘globalisation’. The book challenges the claims made by
a body of thought that can be called globalisation theory, focusing on the flawed methodology of
this theory and its problematic interpretation of the decade of globalisation in the 1990s. This
critique is then used to challenge the argument that post-‘September 11’ US foreign policy
represents an unambiguous and regressive retreat from the potentials of globalisation. While
there are crucial differences between the 1990s and post-2001, there are also considerable
continuities. Crucial to these continuities is the neoliberal character of contemporary
globalisation. In making these arguments, the relationship between the US state and imperialism
is also addressed.
David Harvey in his book, A Brief History of Neoliberalism (2005) 31 , traces the
intellectual roots of neoliberal theory in the 1930s and continues through complex and
antithetical realities of neoliberal development since late 1970s. The main focus of the book is
that neo-liberalism is an economic system that necessitates a complementary political
component. It has a multi-pronged mechanism, which Harvey called accumulation by

30
Ray Kiely, Empire in the Age of Globalisation - US Hegemony and Neoliberal Disorder, Pluto
Press, London, 2005.
31
David Harvey, A Brief History of Neoliberalism, Oxford University Press, New York, 2005.

20
dispossession. The book examines the uneven geographical developments of neoliberal practice
throughout the world. Harvey evaluates that neo-liberalism promises more or less even creation
of wealth but in reality it transfers wealth from the poor majority of the world to the governing
and wealthy elites. The process of neo-liberalization has, however, entailed much ‘creative
destruction’, not only of prior institutional frameworks and powers (even challenging traditional
forms of state sovereignty) but also of divisions of labour, social relations, welfare provisions,
technological mixes, ways of life and thought, reproductive activities, attachments to the land
and habits of the heart. The author outlines the devastating results of global neoliberal
development for labourers, women, and the environment and its peripheral impacts on activists
and oppositional culture, including the rise and role of NGOs and religion based movements and
long held universalisms such as freedom and human rights.
Dilip K. Das in his book, China and India - A tale of two economies (200632), has
considered the transitioning of Indian economy as the elephant’s saunter and consider the
transitioning Chinese economy as the dragon’s breath. The economies of the People’s Republic
of China and India have been venturing to move to the center stage of the global economy and
play more prominent roles than what they did in the past. They are emerging-market economies,
and both countries are seen as increasingly being seen as two up-and-coming economic powers.
Together, these economies account for more than a third of the global population. Together, thus
far, China has been exceedingly successful; India’s growth rate has recently accelerated and now
seems to be following China with a time lag. The two economies share many similarities: they
are large, populous neighbors, who were regarded as abjectly poor countries until the 1980s.
Both have ancient cultures which bear both advantages and disadvantages for economic
development. However, their political systems are very different. While India is an open
democratic society, China which was once a closed society run in an authoritarian manner by the
Chinese Communist Party. This dissimilar political orientation has an important impact on their
economic decision-making processes. This book is the first to systematically compare and
contrast the Chinese and Indian economies. It takes an objective and dispassionate view, and
delves into the constructive and favorable, as well as adverse and unfavorable, sides of both

32
Dilip K. Das, China and India - A tale of two economies, Routledge - an imprint of the Taylor
& Francis, New York, 2006.

21
economies. The book covers large areas of the two economies, including macroeconomic, trade
and financial sectors.
Joseph E. Stiglitz in his book, Making Globalization Work (2006)33, has given various
suggestions for the better working of globalization. He has explained that the globalization in
itself is neither good nor bad. The nature of globalization being either good or bad depends upon
the working of institutions or actors that fosters the process of globalization. If the world
economic institutions do not work on biased basis and care for the interests of developing
countries, than the phenomenon of globalization will automatically become good. The
responsible behaviour of MNCs (Multi-national corporations) regarding the countries in them
they operate also proved very helpful for the better working of globalization. Stiglitz believes in
improving the working of globalization rather than stopping it. This book reflects faith in
democratic processes; the belief that informed citizens are more likely to provide some checks
against the abuses of the special corporates and financial interests that have so dominated the
globalization process; that ordinary citizens of the advanced industrial countries, as well as of the
developing world, share a common interest in making globalization work.
Leela Fernandes in her book, India’s New Middle Class - Democratic Politics in an
Era of Economic Reform (2006)34, has revealed that the urban Indian middle class has growing
significance in local, national, and transnational imaginations of globalization in the twenty-first
century. The rise of this new middle class identity has begun to shape contemporary politics in
India in distinctive ways. This middle class is not “new” in terms of its structural or social basis.
In other words, its “newness” does not refer to upwardly mobile segments of the population
entering the middle class. Rather, its newness refer to a process of production of a distinctive
social and political identity that represents and lays claim to the benefits of liberalization.
Explaining the political dynamics of transnational processes such as globalization and answering
questions about how groups resist or consent to policies of economic reforms require an
analytical lens that can address the political emergence of groups such as the new middle class.
The study provides with such a lens, one that demonstrates the ways in which an analysis of the

33
Joseph E. Stiglitz, Making Globalization Work, W. W. Norton & Company, Inc., New York,
2006.
34
Leela Fernandes, India’s New Middle Class - Democratic Politics in an Era of Economic
Reform, University of Minnesota Press, Minneapolis , London, 2006.

22
processes, practices, and identities involved in the politics of group formation provides a deeper
understanding of the sources of democratic contestation both over policies of economic reforms
and over the broader trajectories of globalization such policies embody. The author analyzes the
political processes that result in such associations between the middle class, consumption, and a
pro-liberalization orientation and then move beyond these connections and examine the internal
differences and political practices of this new middle class. The author specifically argues that an
analysis of the rise of the new Indian middle class deepens our understanding of the political
dynamics of economic reforms in contemporary India.
Rupal Oza’s book, The making of Neoliberal India: Nationalism, Gender, and the
paradoxes of Globalization (2006)35, is about the contentious debates over India’s identity in the
1990s. This book provides an ambitious study of gender and politics in India, and also of
women’s studies, globalization, post-colonialism, mass media and cultural studies. The book
explores the contours of this debate in the context of three independent yet intertwined
developments. The first is the neoliberal policies of reforms instituted in 1991, which has
intensified India’s encounter with global capital. Second is the rise in political power of Hindu
nationalists (The Sangh Parivar) through the decade. The third is the manner in which both the
economic reform process and the Hindu Rights bolstered the consolidation of middle class
identity and power. While dialectically connected, these three political and economic
developments are independent of each other in the sense that they are not causatively linked.
Vedi R. Hadiz in his book, Empire and Neoliberalism in Asia (2006)36, has discussed
that the post-Cold-War era was primarily characterized by an international order dominated by
one superpower, the USA. With the demise of the Soviet Union, the unilateral pursuit of US
economic, political and security interests became more possible than ever. This book has
analysed the overall impact of US primacy on social and political conflicts in Asia, discussing
how the post-Cold-War US agenda does not promote democratization in the region, in
contradiction to one of the major proclaimed aims of the proponents of the Pax Americana. The
book is divided in two parts. Part I deals with Theoretical issues and the international context.

35
Rupal Oza, The making of Neoliberal India: Nationalism, Gender, and the paradoxes of
Globalization, Routledge - an imprint of Taylor & Francis, New York, 2006.
36
Vedi R. Hadiz, Empire and Neoliberalism in Asia, Routledge - an imprint of Taylor & Francis,
New York, 2006.

23
Part II studies the social conflict, power and the American Empire in Asian countries like India,
Bengal, china, south Korea, Malaysia, Philippine, Southern Thailand, Indonesia. The chapter of
this book “Hindu fundamentalist politics in India: the alliance with the American Empire in
South Asia” by Anand Teltumbde handle the thorny issue of the politics of Hindu
fundamentalism and the strange alliance between Hindu fundamentalist forces and the
proponents of economic neoliberalism. While the political practices and organization of radical
Hindu fundamentalism are partly rooted, intriguingly, in European fascism, the author finds a
growing affinity between the requirements of sectarian politics in India and the geo-strategic and
economic interests of USA in South Asia. With the Cold-War-era conflict between India and
Pakistan now having been relegated to the background, Anand argues that an alliance of
convenience has emerged in the sub-continent between USA and some of the most conservative
and anti-democratic forces in India.
Anjum Siddiqui in his book, India and South Asia: Economic Developments in the age
of Globalization (2007) 37 , has presented selected economic issues that are crucial to the
development and growth of South Asia such as the economic effects of national debt, fiscal
deficits, capital flows, international trade and globalization, corruption, and governance and
militarization. The book is divided into four parts: Part 1 presents an introduction to South Asia.
Part 2 deals with macroeconomic issues focusing on the twin budgetary and trade deficits,
foreign direct investment, investment in human capital, capital flows and their effects on
domestic saving, and the consequent impact on economic growth. Part 3 examines the South
Asian Free Trade Agreement (SAFTA) in the South Asian Association for Regional Cooperation
(SAARC) and also whether globalization has improved economic development in the region and
it also examines poverty in South Asia and assesses whether structural adjustment has adjusted
anything and what has been achieved by IMF/World Bank programs in the region. Part 4
examines governance and corruption and also looks at the ‘wisdom’ of military spending in the
region. In this edited book, Baldev Raj in his paper “India’s Economic Growth Miracle in a
Global Economy: Past and Future,” examines India’s economic growth in historical context and
observes that India’s performance since the 1980s is the direct result of investments in human

37
Anjum Siddiqui, India and South Asia: Economic Developments in the age of Globalization,
M.E. Sharpe, New York, 2007.

24
capital and the accumulation of physical capital and infrastructure. The past high level of savings
in the country and some development loans have helped to finance these investments. India is no
longer afraid of international competition and is a worthy regional challenge to China.
Ahmet Kose, Fikret Senses and Erinc Yeldan in their book, Neoliberal Globalization
as New Imperialism : Case Studies on Reconstruction of the Periphery (2007)38, have made
attempt to bring together, both theoretically and empirically, a variety of contributions on the
ideology of neoliberal globalization as a new phase of global capitalism -cum- imperialism.
Trumpeted with the rhetoric of TINA (There Is No Alternative), the neoliberal orthodoxy has
become the dominant ideology today in restructuring the periphery of global capitalism. Its
history is also revealed as a serious blunder to the neo-liberal orthodoxy, rather than just the pure
economic/political mishaps. The Turkish and the Argentinean crises, which erupted in the midst
of an IMF directed adjustment programs, are the clearest examples of how in an indigenous
economy, the unfettered workings of the myopic markets can serve as the main source of
disequilibrium through the speculative attacks of international financial capital flows. This book
addresses the diverse economic structures of the global periphery and tries to deduce lessons on
the current global crisis conjuncture of global capital in governing the world. Thus the book
deals with various aspects of neoliberal globalization from a critical perspective or angle.
Baldev Raj Nayar in his book, Globalization and Politics in India: Themes in Politics
(2007)39, has accepted that globalization, both as process and as a concept, has fast come to
dominate contemporary discourse on human affairs. Yet it is the object of both ardent support
and attack. This book attempts to unravel the dynamics of globalization in the context of India. It
offers diverse viewpoints in a commendably comprehensive manner. The introductory chapter
provides a broad overview of the nature and development of economic globalization and India’s
experience with it. The book is further divided into five parts. Part I deals with a general
discussion of the nature of globalization, both in past and contemporary incarnations. Part II
provides the nature of the economic strategy in India that preceded neo-liberal policies. Part III
shows the shift in favour of economic liberalization and the stimulus for it. Part IV examines the

38
Ahmet Kose, Fikret Senses and Erinc Yeldan, Neoliberal Globalization as New Imperialism :
Case Studies on Reconstruction of the Periphery, Nova Science Publisher Inc., New York, 2007.
39
Baldev Raj Nayar, Globalization and Politics in India: Themes in Politics, Oxford University
Press, New Delhi, 2007.

25
consequences of globalization for India in relation to its external setting in world politics. Part V
reveals the results of these processes in relation to India’s domestic situation. This book provides
a comprehensive view of the debates surrounding globalization and their impact on India. It
offers diverse viewpoints on the linkages between the economics and politics of globalization as
scholars, policy makers and media specialists present their views on the role of ideas, interests
and institutions regarding the adjustments to globalization.
Naomi Klein in her book, The Shock Doctrine: the Rise of Disaster Capitalism
(2007)40, has challenged the popular myth of neoliberal movement’s peaceful global victory.
Klein has pointed out that Friedman and his followers have repeatedly harnessed terrible shocks
and violence to implement their radical neo-liberal policies. This book is a challenge to the
central and most cherished claim in the official story—that the triumph of deregulated capitalism
has been born of freedom that unfettered free markets going hand in hand with democracy.
Instead, Naomi showed that this fundamentalist form of capitalism has consistently been
midwifed by the most brutal forms of coercion, inflicted on the collective body politic as well as
on countless individual bodies. The history of the contemporary free market—better understood
as the rise of corporatism. The dirty secret of the neoliberal era is that these ideas were never
defeated in a great battle of ideas, nor were they voted down in elections. They were shocked out
of the way at key political junctures. When resistance was fierce, they were defeated with overt
violence —rolled over by Pinochet's, Yeltsin's and Deng Xiaoping's tanks.
Adrian Smith, Alison Stenning and Katie Willis’ book, Social Justice and
Neoliberalism: Global Perspectives (2008)41, is the result of a set of sessions held at the 2006
Annual Conference of the Royal Geographical Society with the Institute of British Geographers
in London. The book focuses on neoliberal processes and outcomes ‘from the margins’, both
geographically (global South, former state socialist East and peripheral communities in the
global North) and socially. By drawing on perspectives from peoples and places that are often
not considered in the construction, implementation or analysis of neoliberal-informed policies,
the contributing authors aim to provide insights which might challenge existing perspectives on

40
Naomi Klein, The Shock Doctrine: The Rise Of Disaster Capitalism, Metropolitan Books,
New York, 2007.
41
Adrian Smith, et. al, Social Justice and Neoliberalism: Global Perspectives, Zed Books, New
York, 2008.

26
neo-liberalism. The book deals with four main themes. First, the book deals with the ways in
which neo-liberalization has been resisted, either intentionally in large-scale social movements,
or through smaller-scale practices. Second, the entanglement of neo-liberalization with the
forging of new identities, particularly around entrepreneurship and individualization, are
considered. These are linked to new forms of governance, often mobilized around discourses of
‘empowerment’ and ‘autonomy’. Third, it considers how the implementation of neo-liberalism
affect opportunities for social justice and how the material effects of neo-liberalism may
undermine campaigns for greater social equity. Finally, it deals with ‘diverse economies’ to de-
centre capitalism and examine alternative economic practices which may arise from, or exist
alongside, forms of neo-liberalized capitalism.
Aradhana Sharma in her book, Logics of Empowerment : Development, Gender, and
Governance in Neoliberal India (2008)42,has taken up precisely the questions about the state,
development, gender, subaltern subjects, and popular protest in neoliberal India through the lens
of grassroots “empowerment.” The book studies the paradoxes and politics engendered by an
innovative women’s empowerment project undertaken by state agencies and feminist groups in
partnership with each other. The program, Mahila Samakhya (MS), is structured as a hybrid
“government-organized nongovernmental organization” (GONGO), and aims to collectively
empower and mobilize low-caste, rural Indian women who have been actively and systematically
disempowered by economic forces and by social and political structures. In the contemporary
neoliberal era, empowerment has emerged as a keyword effectively replacing the much-maligned
term welfare. This book elaborates how the mobilization of empowerment is altering the state
and governance, reconfiguring the relationships between state and social actors, transforming
development, and reshaping citizenship and popular politics under the regime of neoliberal
governmentality.
Bipan Chandra’s book, India since Independence (2008)43, is a work on contemporary
history that takes a holistic view of the political economy of Indian development since
independence. The author evaluates it in the context of the nearly two hundred years of colonial
rule and a prolonged and powerful anti imperialist mass movement which gave birth to the

42
Aradhana Sharma, Logics of Empowerment: Development, Gender, and Governance in
Neoliberal India, the Regents of the University of Minnesota, Minneapolis, London, 2008.
43
Bipan Chandra, et.al., India since Independence, Penguin Books, Gurgaon, India, 2008.

27
independent Indian republic. The book describes how the constitution was framed, how the
Nehruvian political and economic agenda and the basics of foreign policy were evolved and
developed. It dwells on the consolidation of the nation, examining contentious issues like party
politics at the centre and states, the Punjab problem and anti caste politics and untouchability.
Apart from detailed analysis of Indian economic reforms since 1991, this book includes an
assessment of the Indian economy in the new millennium.
Bidyut Chakrabarty in his book, Indian Politics and Society since Independence
(2008)44, has focused on politics and society in India. Structured thematically, with a multitude
of pedagogical features, this book is a useful text. It explores new areas enmeshed in the complex
social, economic and political processes in the country. Linking structural characteristics with
broader sociological context, the book focuses on the strong influence of sociological issues on
politics, such as the shaping of the social milieu and the articulation of the political in day-to-day
events. Political events are connected with the ever-changing social, economic and political
processes in order to provide an analytical framework to explain ‘peculiarities’ of Indian politics.
The main argument of the book is that three major ideological influences have provided the
foundational values to Indian politics: colonialism, nationalism and democracy. The colonial,
nationalist and democratic articulation of the politics had shaped Indian politics in a complex
way. Underlining the growing importance of political alignment regardless of ideology, the book
concludes by critically evaluating the evolution and consolidation of coalition culture in India as
perhaps most inevitable in a highly fragmented polity where the incentives to appeal to a larger
constituency seem to have evaporated.
Rachel S. Turner in his book, Neo-Liberal Ideology - History, Concepts and Policies
(2008)45, has determined the contours of the liberal movement, which later on was popularly
known in academic and policy debates as neo-liberalism. It uncovers the distinct elements of
neo-liberalism in the national contexts of Germany, Britain and the United States during the
second half of the twentieth century through contextual and conceptual analysis. This book does
not hold the popular hegemonic view of neoliberalism, where, in relation to globalisation, the

44
Bidyut Chakrabarty, Indian Politics and Society since Independence, Routledge – an imprint
of Taylor & Francis, New York, 2008.
45
Rachel S. Turner, Neo-Liberal Ideology - History, Concepts and Policies, Edinburgh
University Press Ltd, Edinburgh, 2008.

28
former is seen as the neo-liberal ideology dominant paradigm of the twenty-first century. Instead,
the book highlights the limited impact that neo-liberalism has had on government policy at the
national level, and the contradictory obstacles which it faces to the realisation of its liberal
programme at the global level. The book addresses these questions: how neo-liberalism has
developed out of the traditions of liberalism, what its core concepts are, how they have been
interpreted in different national contexts, and what makes neo-liberalism a distinctive ideology.
Ruth Blakeley in his book, State Terrorism and Neoliberalism: The North in the South
(2009)46, has explore attempted to the complicity of democratic states from the Global North in
state terrorism in the Global South. It evaluates the relationship between the use of state
terrorism by Northern liberal democracies and efforts by those states to further incorporate the
South into the global political economy and to entrench neoliberalism. The book explores state
terrorism as used by European and early American imperialists to encroach upon territory, to
coerce slaves and forced wage labour, and to defeat national liberation movements during the
process of decolonisation. It examines the use of state terrorism by the US throughout the Cold
War to defeat political movements that would threaten US elite interests. Finally, it assesses the
practices of Northern liberal democratic states in the 'War on Terror' and shows that many
Northern liberal democracies have been active in state terrorism, including through extraordinary
rendition. State terrorism is one of the many coercive tools that have regularly featured in the
foreign policy practices of liberal democratic states from the North. State terrorism should be
understood as a threat or act of violence by agents of the states which intend to induce extreme
fear in a target audience, so that they are forced to consider changing their behaviour in some
way. Many examples of state terrorism have been explored in this book.
Shalendra D. Sharma in his book, China and India in the Age of Globalization
(200947), endeavours to study the two countries in relation to the age of globalization. In the
distant past, both China and India were civilization epicenters. For more than two millennia, their
tutelage and influence shaped the destiny of the Asian region and beyond. Yet with the exception
of a few fleeting historical interludes, neither was able to translate its enormous socio economic,

46
Ruth Blakeley, State Terrorism and Neoliberalism - The North in the South, Routledge - an
imprint of Taylor & Francis, New York, 2009.
47
Shalendra D. Sharma, China and India in the Age of Globalization, Cambridge University
Press, New York, 2009.

29
political, and cultural depth into power and greatness – at least into a durable “hard” or
instrumental power. However, the overpowering and irresistible impulses of contemporary
globalization is allowing the world’s two oldest civilizations to shake off centuries of inertia and
the burdens of history and claim their “rightful” place as leaders among the community of
nations. This book is thematically divided into eight chapters. It synthesizes the core ideas,
policies, and actions, as well as the interplay of domestic and external events that influenced and
shaped political economy of pre-reform India (1947–91) and China (1949–78). Specifically, it
illustrates both the euphoria and trauma of nation-building during these momentous years and
how it profoundly determined the developmental paths and outcomes in each country. The
chapter underscores that each country’s developmental outcomes were rooted not simply in the
differences in their political systems or the Decisions made by powerful leaders but were also the
result of a zealously state guided, inward-looking strategy of import-substitution industrialization
(ISI) that was not just incidental but an integral part of each country’s developmental strategy.
Atul Kohli’s book, Democracy and Development in India – From Socialism to Pro-
Business (2010)48, is an invaluable and comprehensive edited work. The author brings together
three decades of Indian politics from a comparative and historical perspective. It provides a
overview of the evolution and interrelations between multi party democracy and economic
development in India from the 1980s to the present time. This book, while making a case for
social democratic model of development for India, emphasizes on key challenges including the
issue of governance, developmental disparity and inequality. It also analyses the political
dimension of neoliberal economic reforms and highlights significant debates on state-society
relations in India.
Kean Birch and Vlad Mykhnenko’s book, The Rise and Fall of Neoliberalism: the
Collapse of an Economic Order (2010)49, contributes to the search for viable alternatives to neo-
liberalism. The book is divided in two parts; Part one deals with the rise of neoliberalism and
Part two deals with the fall of neoliberalism. On the one hand, the credit crunch and banking
crisis have exposed the fault lines in the neoliberal economic order that has been dominant for

48
Atul Kohli, Democracy and Development in India – From Socialism to Pro-Business, Oxford
University Press, New Delhi, 2010.
49
Kean Birch and Vlad Mykhnenko, The Rise and Fall of Neoliberalism: the Collapse of an
Economic Order, Zed Books Ltd, London, 2010.

30
the last three decades. Margaret Thatcher’s confident assertion that ‘there is no alternative’
springs to mind here. On the other hand, the different impacts and implications of the recent
economic crisis illustrate the diversity in the implementation and embeddedness of neoliberalism
in many countries, thereby suggesting that neoliberalism is not (and never was) a single
hegemonic system in the first place. Such a challenge, however, represents an opportunity to
further understanding of neoliberal economic orders and how this order grew to such prominence
and held sway over national and international policy for so long. The author evaluates morality
and ethics which have been turned right way up in response to the ‘natural law’ of economic
exchange in which the rich can buy more freedom than the poor. This book is an attempt to
understand how this has happened, how it has been rendered undone, and what alternatives can
be turned to now.
Manfred B. Steger and Ravi K. Roy’s book, Neoliberalism - A Very Short
Introduction (2010) 50 , tells about the origins, evolution, and core ideas of neoliberalism by
examining its concrete manifestations in various countries and regions around the world. The
book has shown that although neoliberals across the globe share a common belief in the power of
‘self-regulating’ free markets to create a better world, their doctrine comes in different hues and
multiple variations. Reaganomics, for example, is not exactly the same as Thatcherism. Bill
Clinton’s brand of market globalism diverges in some respects from Tony Blair’s Third Way.
And political elites in the global South (often educated at the elite universities of the North) have
learned to fit the dictates of the Washington Consensus to match their own local contexts and
political objectives. Thus, neoliberalism has adapted itself to specific environments, problems,
and opportunities. For this reason, it makes sense to think of subject in the plural –neoliberalisms
rather than a single monolithic manifestation. The main ideas, policies, and modes of governance
fuelling these neoliberal projects lie at the heart of this book. Its main purpose is to present an
accessible and informative outline for a rich and complex phenomenon.
Richard Westra’s book, Confronting Global Neoliberalism- Third World Resistance
and Development Strategies (2010)51,is unique contribution in both the breadth and depth of its

50
Manfred B. Steger and Ravi K. Roy, Neoliberalism - A Very Short Introduction, Oxford
University Press Inc., New York, 2010.
51
Richard Westra, Confronting Global Neoliberalism- Third World Resistance and Development
Strategies, Clarity Press, Inc., Atlanta, 2010.

31
analysis. It traces the ebbs and flows in development thinking over the past two centuries on
specific development cases and regions, this book also points to the dark future painted by the
neoliberal course; a situation only exacerbated by the current economic malaise. The book
provides knowledge about the socio-economic conditions existing across much of the world we
live in and the neoliberal policies at the root of these. It also provides inspiring examples of ways
in which third world states have resisted neoliberal policy and the struggles and international
condemnations they have faced, and continue to face it may be added, even as the bankruptcy of
neoliberal policy has been so vividly exposed in the current world economic meltdown. In this
edited book, each chapter draws upon the authors’ contributions to critical development theory as
well as their mastery of empirical questions. The countries/regions having neoliberal experiences
and potential to be covered in this book are: Brazil, China, Cuba, Egypt, India, Mexico,
Southeast Asia (Indonesia, Malaysia and Vietnam), South Africa, South Korea, Syria, Thailand
and Venezuela. In Chapter Two, Ananya Mukherjee Reed has examined the interplay between
the basic contradictions of global neoliberalism and problematic conditions of development in
India—the latter including India’s gapping social class and caste divisions, persisting travails in
agriculture and regional diversity. She goes on to deal with questions of poverty and social
inequality reduction in India under the aegis of neoliberal policy. Reed concludes by asking
some pointed questions about what development means in the neoliberal context and suggests
alternative meanings of development along with discussion about the potentials for social groups
in India to mobilize to implement alternative visions of development.
Sucha Singh Gill (et al) in their book, Globalization and Indian State (2010)52, have
given comprehensive details regarding globalization such as its meaning, definition, historical
background and its impact on nation state. Their book specifically focuses on the impact of
globalization on Indian state and the changes in health, education and agricultural extension
services in Punjab. The acquisition and control of land by real estate ‘dragons’ through state
mechanism add new dimensions to the changing pattern of adverse economic growth in Punjab.
They critically examine the negative and positive aspects of globalization which are very
important for us to relate them to the present study.

52
Sucha Singh Gill (et al), Globalization and Indian State – Education, Health And Agriculture
Extension Services In Punjab, Aakar Publisher, New Delhi, 2010.

32
 Gerard Dumenil and Dominique Levy in their book, The Crisis of Neoliberalism
(2011)53, have revealed the crisis that began with the subprime loan crash of August 2007 in the
United States will remain a distinctive milestone in the history of capitalism. From its onset, the
financial turmoil took unexpected proportions. The shock gradually unsettled the fragile financial
structure that had been built during the previous decades and destabilized the real economy. By
September 2008, it became evident that capitalism was entering into a deep and lasting crisis, a
Great Contraction, reminiscent of the “Great Depression”. The book covers the causes of the
crisis, its outbreak, and the first phase of the contraction of output around the globe, as well as
the perspectives for the coming decades. The viewpoint is analytical, not normative. Stronger
government intervention and international cooperation will also be required in respects these to,
which add to the necessity of the establishment of renewed configurations beyond the wild
dynamics of neoliberal capitalism.
Ravi Kumar in his book, Education, State and Market: Anatomy of Neo-Liberal
Impact (2014) 54 , has mentioned that Indian educational discourse is yet to respond to the
onslaught of neoliberal capital. The genesis of this book is a workshop organized to understand
the crisis of neo-liberalization that Indian education system is confronting with. This book offers
a thorough understanding of the impacts of an unbridled market on different aspects of
education. The author traces the process of dismantling and commoditizing of higher education.
The author accepts that education is one of the most important tools for social transformation and
economic development. He concludes that there is a need not only to further explore the theme
but also to move beyond by looking into possibilities and alternatives.
Dag Einar Thorsen and Amund Lie in their paper, “What Is Neoliberalism?” 55, have
explored the concept of neoliberalism that has become widespread in political and academic
debates during past thirty years. The authors have admitted that life in the age of neoliberalism is
based on an ideology shaping our world today. The word is not given proper and accepted

53
Gerard Dumenil and Dominique Levy, The Crisis of Neoliberalism, Harvard University Press,
London, 2011.
54
Ravi Kumar, Education, State and Market: Anatomy of Neo-Liberal Impact, Aakar Books,
New Delhi, 2014.
55
Dag Einar Thorsen and Amund Lie, “What Is Neoliberalism?”, Department of Political
Science, University of Oslo, http://www.folk.uio.no

33
definition but it is done, then the concept could become a useful analytical device in order to
describe some recent economic and political trends, even if it is an ever so slight overstatement
to say that we live in a neoliberal age or a neoliberal society.
James Petras and Steve Vieux in their article, “Neo-Liberalism and Daily Life” 56,
have challenged one of the most puzzling aspects of contemporary life that is the gap between
growing socio economic deprivation of a wide swath of wage and salaried workers and the
virtual absence of political radicalism. They have explored that the data on the effects of
unemployment, underemployment and low paid employment reveal a strong tendency for the
downwardly to direct their anger inward to become depressed, hostile towards their family and to
withdraw from neighbors, friends, and former colleagues. This behavior is added by the major
political parties, the mass media and academic publicists who point to the inevitability of
globalization, the virtue of market competitiveness and the need for labour flexibility which
present the problem of the victim individual as product of impersonal forces beyond its control.
John Clarke in his article, “Turning Inside Out – Globalization, Neoliberalism and
Welfare State”57, has focused on the destructive account of globalization which bringing about
the end of the welfare state. The author has assumed the different views which treat globalization
as an external force, or pressure rather than a set of processes that are also internalized within
nations. This article emerges from an inter-disciplinary encounter, exploring what happens when
anthropological approaches are brought to bear on the question that are conventionally
understood as belonging to other disciplines in the case politics, sociology and social policy. It
examines various ways of thinking about the relationship between globalization and welfare state
and exploits anthropological analyses to reframe these issues.
Shireen Saleem in his paper, “Neo-Liberalism: Structural Implications” 58 , has
analyzed that last century had witnessed increasing economic integration and growing popularity

56
James Petras and Steve Vieux, “Neo-Liberalism and Daily Life”, Economic and Political
Weekly, Vol. 31, No. 38, September 21, 1996, http://www.jstor.org/stable/4404594.
57
John Clarke, “Turning Inside Out - Globalization, Neoliberalism and Welfare State”,
Anthropologica, Canadian anthropology society, Vol. 45, No. 2, 2003,
http://www.jstor.org/stable/25606141.
58
Shireen Saleem, “Neo-Liberalism: Structural Implications”, Pakistan Horizon, Pakistan
Institute Of International Affairs, Vol. 55, No. ½, April, 2002,
http://www.jstor.org/stable/41404009.

34
of neo-liberalism. It is the defining political economic paradigm of our time. It refers to policies
and processes whereby a handful of private interests are permitted to control as much as possible
of social life in order to maximize their personal profits. Neo-liberalism is not the indigenous
phenomenon for the developing countries; it is an alien system that has imposed upon them. This
results in increase in poverty and ratio of people living below poverty line which is increasing
along with the increase in the inequalities between rich and poor. He has concluded that there
was direct linkage between neo-liberalism and poverty as it only promotes private interests not
interests of society.
David Harvey in his paper, "Neo-Liberalism as Creative Destruction” 59 , evaluates
that neo-liberalism has swept across the world like a vast tidal wave of institutional reforms and
discursive adjustments. The author criticizes that neoliberalism is entailing much destruction, not
only of prior institutional frameworks and powers but also of divisions of labour, social relations,
welfare provisions, technological mixes, ways of life, attachment to the land, habits of heart and
ways of thought. The author raises some rational questions as to whose particular interest is
served by this and for whose benefit. It has spawned a swath of oppositional movements. The
more clearly oppositional movements recognize that their central objective is to confront the
class power that has been so effectively restored under neoliberalization.
Prabhat Patnaik in his paper, “The State under Neo-Liberalism”60, has focused on the
capitalist state in the era of neo-liberalism. The author has highlighted two features of neoliberal
state in particular. One is related to the change in nature of the state, from being an entity an
apparently standing above society and intervening in its economic functions in the interests of
society as a whole, even at the expense of the unbridled interests of finance capital. This changes
in the nature of the capitalist State, which is sometimes mistakenly called the "retreat of the
State", is manifest in the shift that occurs from its being a spender, an investor and a producer, to
its new role in carrying out "privatization" and "disinvestment" and undertaking State
expenditure deflation. The second obvious feature relates to the fact that the so-called "unipolar"
world where all nation-States "adjust" to the leading role of the US is in fact the coming into

59
David Harvey, "Neo-Liberalism as Creative Destruction”, Human Geography, Geography and
Power, Vol. 88, No. 2, 2006, http://www.jstor.org/stable/3878384
60
Prabhat Patnaik, “The State under Neo-Liberalism”, Social Scientist, Vol. 35, No ½ Jan. –Feb.,
2007, http://www.jstor.org/stable/27644193.

35
being of a surrogate global State to protect the interests of international finance capital. The
writer draws attention to an altogether different, a third feature of the "neo-liberal State". This
concerns the change that occurs in the "texture" of the State, that is, in the nature of the
bureaucracy, other State personnel, and the "organic intellectuals" at large, in the era of neo-
liberalism. The implications of this change are quite far-reaching.
Prabhat Patnaik in his article, “Neo-Liberalism and Democracy” 61, has highlighted
the rise of fascism in politics of India. He reveals that the growing popularity of a ‘messiah’ that
assures to provide solution to the problems in the course of politics under neoliberalism. With the
demise of class politics and rise of identity politics, it shows the increasing scream against
corrupt politicians and offers a path for left politics to break the hegemony of globalized capital.
The author said that above all it is not required for this to become hegemonic by the logic of
neoliberalism rather the necessity for this is to reject neo-liberal hegemony and to struggle for
counter hegemony against the ideas of neo-liberalism. The author stresses that the intellectuals
and scholars have key role to play in this struggle of ideas.
Sarah Joseph’s article, “Neoliberal Reforms and Democracy in India”62, has analysed
the debate regarding neoliberal reforms that had focused on the changes in economic policy. The
reforms of state and governance have been viewed as offering necessary back up for economic
reforms. But the restructuring of the state has an independent importance. It represents an
attempt to incorporate market rationality in the organization and functioning of the state. Further,
this paper also explored the implications of political reforms for democracy in India. The
important critical examination of the process in which not only democratic institutions but also
the humanist ideals that had inspired the social democratic state are being reinterpreted according
to neo-liberal political agenda.
Sitaram Yechury in his article, “Neo-Liberalism, Secularism and the Future of the
Left in India”63, has examined the left’s steadfast opposition to neoliberliasm and its equally

61
Prabhat Patnaik, “Neo-Liberalism and Democracy”, Economic and Political Weekly, Vol.
XLIX, No. 15, April 12, 2014.
62
Sarah Joseph, “Neoliberal Reforms and Democracy in India”, Economic and Political Weekly,
Vol. 42, No. 31, August 10, 2007. http://www.jstor.org/stable/4419870.
63
Sitaram Yechury, “Neo-Liberalism, Secularism and the Future of the Left in India”, Social
Scientist, Vol. 39, No. ½, Jan. – Feb., 2011, http://www.jstor.org/stable/41062145.

36
committed championing of secularism. The future of left in India is inseparable with India’s
future. The twin trajectories of neoliberalism and communalism have been discussed in detail
that confront and determine the immediate and intermediate tasks. It is for this precise reason
that all the forces which support these trajectories unite to attack and weaken the left. This is not
surprising since, it is the left alone that has stood up at once to both economic and social reforms
of oppression and this struggle is ongoing in India. The author suggests that instead of
neoliberalism where economics drive politics, India requires a system where politics determines
its economics.
OBJECTIVES OF THE STUDY
1. To understand the concept of neo-liberalism.
2. To trace the history of neo-liberalism and its evolution in India.
3. To examine the nature of Indian state before the adoption of neo-liberalism.
4. To analyze the changing nature of Indian state after the adoption of neo-liberalism.
5. To analyze the impact of neo-liberal policy in service sector, education sector, health
sector and environment.
HYPOTHESES OF THE STUDY
1. Neoliberalism is a modified and revived form of classical liberalism based on free market
capitalism.
2. Neoliberalism is a dominant ideology which has replaced the concept of welfare state to
minimal or market oriented state.
3. Indian state was driven to make a paradigm shift to the neoliberal reforms in 1990s to
meet a serious crisis of balance of payment in international trade and fiscal overload on
the government of India.
4. The adoption of neo-liberalism has brought far reaching changes in the nature of Indian
state from mixed economy to purely private profit oriented economy.
5. The impact of neo-liberal policies has far-reaching consequences especially in the area of
education sector, service sector, health care sector and environment.
SCOPE OF THE STUDY
This study is confined to the state of Punjab. The state and private universities and
government schools of Punjab have been taken up. Punjabi University, Patiala and Panjab
University, Chandigarh are state universities and Thapar University, Patiala and D.A.V.

37
University, Jalandhar are private universities and different Government Schools of Punjab have
been drawn for sample purposes. For data collection students and teachers of these educational
institutions have been taken up as respondents.
DATA COLLECTION AND ANALYSES
The total number of respondents are 300 as from Punjabi University, Patiala is 66; Panjab
University, Chandigarh is 81; as Thapar University, Patiala is 40; D.A.V. University, Jalandhar
is 55 and teachers of Government Schools of Ferozepur District is 58. This sample represents the
various states of India as students came from various parts of India to study in these universities
and teachers from Government Schools of Ferozepur District are also coming from various other
districts of Punjab. This indirectly shows that the sample represents various states of India as the
respondents studying in these universities belong to different parts of India such as Punjab,
Haryana, Chandigarh, Himachal Pradesh, Jammu and Kashmir, Uttar Pradesh and Bihar.
RESEARCH METHODOLOGY
The present study is based both on Empirical and Archival method. The study is based on
various Primary as well as Secondary sources. The primary data has been collected through the
Questionnaire cum Schedule Method. The archival method has been used for collecting the
secondary data from election reports, statistical abstracts of government of Punjab, books,
eBooks, newspapers, journals, articles and websites. The survey research techniques have been
used for gathering the data and Questionnaire cum Schedule Method was administered, after
testing its efficacy. An attempt has also been made to find out the validity of the findings of the
earlier studies.
CHAPTERIZATION
1. Introduction
2. Neo-liberalism: Historical Perspective
3. Nature of Indian State before the adoption of Policy of Neo-Liberalism
4. Nature of Indian state after the adoption of Policy of Neo-Liberalism
5. Profile of Respondents and Impact of Neo-Liberalism on Punjab State: An Empirical
Study
6. Conclusion

38