ABSTRACT
In July 1991, in the midst of a major balance-of-payments crisis, P. V. Narasimha Rao’s government introduced a set of relatively radical policy changes in the economic sphere that came to be known as ‘economic reforms’ or ‘liberalisation’. Different interpretations of the causes of the 1991 crisis lead to different explanations of the origins of the economic reforms. M. Sengupta rightly emphasises the role of politics in bringing about the economic reforms. Growing inequality explains to a large extent the declining effectiveness of India’s growth to reduce poverty. The economic reforms and the greater role played by the private sector contributed to expand further the middle class that is now the main protagonist of the ‘new’ India. The realm of ‘mass politics’ was occupied by identity-based issues that effectively distracted the public opinion from the realm of ‘elite politics’ which is where the economic reforms were pushed through.
