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well as NGOs that continually work to affect poverty.
    The Indian experience also shows clearly that antimarket fundamentalism and autarkic policies are surefire ways to undermine growth and hence turn off the most powerful means of accelerating poverty alleviation.

Chapter 1
Indian Socialism and the Myths of Growth and Poverty
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    If we squander our resources in merely acquiring for the state existing industries (that we have acquired them may be for the nation’s good), for the moment we may have no other resources left, and we would have spoiled the field for private enterprise too. So, it is far better for the State to concentrate on certain specific, vital, new industries than go about nationalizing many of the old ones though, as I said, in the case of some specific vital industry of national importance that might be done.
    â€” Jawaharlal Nehru in a speech to the
    Constituent Assembly (Legislative), New Delhi, February 17, 1948
    I am saddened though not surprised, to find that several critics of the NIP [New Industrial Policy] have denounced this as anti-Nehruvian, which only shows how little they knew of the dynamic mind of Pandit Nehru, which faced with the havoc in the economy, would have been the first among the first to salute the NIP.
    â€” J. R. D. Tata in “Berlin Walls Should Fall,” Times of India , August 1, 1991
    S ocialism, which was part of the rhetoric under Prime Minister Jawaharlal Nehru (who had been schooled in Fabian socialism), did not fully dominate and constrain the policy framework that was adopted under his leadership. 1 Indeed, Bhagwati, who had been educated at Cambridge University and was influenced by Joan Robinson, his tutor, on his return to India in 1961 went so far as to condemn the policy framework for being deficient on socialism. Working on poverty at the Indian Planning Commission at the time, he went on to characterize the “socialistic pattern of society,” which in December 1954 theparliament had adopted as the guiding principle of social and economic policy, as mere “socialist patter.” 2
    Socialism came to occupy a far more prominent place in the Indian policy framework only under Prime Minister Indira Gandhi, Jawaharlal Nehru’s daughter. 3 Whereas, for instance, Jawaharlal Nehru had not embraced nationalization of existing private-sector enterprises (including foreign multinationals) and instead had adopted a “gradualist” policy of increasing the relative size of the public sector by planning a steady increase in the share of investment in it presumably with each five-year plan, Indira Gandhi chose the more radical and rapid path of nationalization on the one hand and ever-tightening regulation of the private sector on the other.
    Beginning with the dramatic decision to nationalize the fourteen largest banks in 1969, Indira Gandhi went on to nationalize general insurance, oil companies, and coal mines in the following four years. At the same time, she went after the large private firms, both domestic and foreign, to combat the concentration of wealth and economic power. Among the measures she took were forcing the dilution of foreign equity in virtually all firms to 40 percent or less; confining investments by large domestic and foreign firms to nineteen narrowly defined highly capital-intensive industries; reserving a large number of labor-intensive products for exclusive production by small-scale enterprises; strictly limiting the size of urban land holdings; and restricting the layoff of workers in large firms. To further enhance government control, she additionally extended government monopoly over the imports and exports of several new products. She also attempted a government takeover of wholesale trade in food grains but had to retreat midway once it became clear that this was beyond the government’s capacity.
    This comprehensive turn to socialism was unsustainable. The economy took a nosedive with per capita