ABSTRACT
As is well known and documented, the oil wars and the investment in the white goods industries led to the post-1991 balance of payment crisis, forcing the Indian economy to open up in a significant manner on adverse terms of relationships without the resultant reciprocity. The most potent and invisible trend then and visible now of the form of opening up of the economy was in the financial sector. India managed to create a unique and potentially volatile situation for herself when she started managing her current account deficit with capital inflow management. This, in turn, put tremendous pressure on the establishment to facilitate the opening up in such a manner that it should continue to solicit dollars as the Current Account Deficit had to be managed. This, in turn, set two trends in motion. On one hand, we initiated a centralising tendency in the resource mobilisation within, and at the same time in the name of reforms invited international finance capital on its own terms. While this was permitted in the economy, we at the same time ushered in decentralisation processes in the polity. Hence, the 73rd and the 74th Amendments to the Constitution were passed at the same time when the centralising tendency in the resources mobilisation in the economy was the order of the day.
