Introduction – A Nation at the Crossroads of Pride and Profit

When India awoke to freedom in 1947, its leaders were not merely tasked with governing a new country; they were entrusted with building an economy that could carry the weight of national pride. Political independence without economic self-reliance was seen as hollow. Thus, the earliest years of the Republic were shaped by a nationalist imagination in which the economy was not just a technical field of production and distribution, but a moral and symbolic arena. To own industries, to build dams, to expand railways, these were not administrative acts alone, but assertions of sovereignty, collective dignity, and modern progress.

Over the decades, however, the spirit of nationalism in the economy faced growing challenges. By the late 20th century, inefficiency, bureaucracy, corruption, and the global tide of liberalisation converged to push India toward a dramatic transformation. The economic reforms of 1991, spearheaded by Prime Minister P. V. Narasimha Rao and Finance Minister Dr. Manmohan Singh, marked the moment when nationalism’s economic model gave way to privatisation, liberalisation, and globalisation. India moved from a state-led developmental state to a market-oriented economy.

Yet, this journey is not linear. It is not a story of progress alone, nor of decline alone, but of complex negotiation between pride and precarity, sovereignty and surrender, empowerment and exclusion. Privatisation brought undeniable gains in efficiency, growth, and integration into global supply chains. But it also created new vulnerabilities, inequality, job insecurity, and loss of state welfare functions.

This essay, therefore, asks: What has India gained and lost in moving from nationalism to privatisation? And more importantly, what future path can harmonise growth with justice? The answers matter not only for economists or policymakers but for every citizen, because the shape of the economy defines the texture of everyday life from the price of grain in a village market to the opportunities of a young graduate in a city.

Nationalism as an Economic Imagination – The Birth of Public India

In the first decades after independence, India’s economy was built upon an explicitly nationalist framework. Jawaharlal Nehru, the architect of modern India’s planning system, declared that “socialistic pattern of society” was the guiding principle of development. He envisioned public sector enterprises (PSUs) as the “temples of modern India,” monumental projects that would embody the dreams of self-reliance and collective progress.

The Planning Commission, established in 1950, became the nerve centre of this vision. Through successive Five-Year Plans, the state directed investment into heavy industries, infrastructure, education, and agriculture. Public enterprises like Hindustan Steel, Bharat Heavy Electricals, and Oil and Natural Gas Corporation became symbols of economic sovereignty. They were not only producers of goods but embodiments of national pride, signalling to the world that India would not be reduced to a market for foreign capital.

This economic nationalism was also deeply moral. To Nehru and his contemporaries, dependence on foreign corporations was akin to a betrayal of independence. The state, therefore, assumed the role of protector, shielding local industries through import substitution, licensing, and tariffs. Villages were to be uplifted through land reforms and cooperative movements. Urban India was to be industrialised under state guardianship. In this vision, the economy was not merely about profits, but about the creation of an equitable, self-sustaining society. The gains of this model were substantial in the early decades. India achieved steady industrial growth, built scientific and technical institutions, and preserved autonomy from Cold War pressures. The nationalist economy instilled a sense of collective ownership: ordinary citizens felt that the steel plants, railways, and public banks belonged to them as much as to the government.

However, the model also carried seeds of its own crisis. By the 1970s and 1980s, inefficiency, bureaucratic overreach, and corruption eroded its effectiveness. The public sector, once a temple, often became a stagnant bureaucracy. Protectionist policies, while shielding Indian industries, left them uncompetitive globally. The moral imagination of economic nationalism remained strong, but the machinery struggled to deliver prosperity at scale.

The Breaking Point – Why Nationalism Alone Was Not Enough

By the late 1970s and 1980s, the nationalist economic model, once celebrated as visionary, began to show deep structural weaknesses. The state-led framework had created an economy heavily reliant on bureaucracy. The “License Raj,” a system of permits, quotas, and approvals, turned into a labyrinth of red tape. While designed to prevent monopolies and ensure fairness, it fostered corruption, rent-seeking, and inefficiency.

Public sector enterprises, instead of remaining temples of progress, became, in many cases, burdened with overstaffing, outdated technology, and political interference. Jobs in PSUs often became rewards for loyalty rather than merit, eroding productivity. The state, rather than empowering industries, became a bottleneck. Externally, India faced growing global pressures. The oil shocks of the 1970s worsened the fiscal deficit. Agricultural reforms delivered uneven results: while the Green Revolution boosted food security in some regions, it widened disparities across states. By the 1980s, India’s debt burden increased as governments borrowed heavily to sustain subsidies, welfare, and industrial projects.

The tipping point came with the 1991 Balance of Payments Crisis. India’s foreign exchange reserves had fallen so drastically that the nation had barely enough to cover two weeks of imports. Gold reserves had to be physically pledged abroad to secure emergency loans. For a country that had fought for economic self-reliance, this humiliation was symbolic as much as financial. The old nationalist economy had provided stability but not dynamism. It had built the foundations of industrial India, but it could not propel the nation into global competitiveness. The pride of self-reliance was weighed down by the reality of stagnation. India stood at the edge of collapse — and only radical reform could pull it back.

The 1991 Revolution – Privatisation as Survival and Salvation

The year 1991 became a watershed in India’s economic history. Facing the most severe financial crisis since independence, Prime Minister P. V. Narasimha Rao and Finance Minister Dr. Manmohan Singh introduced sweeping reforms that would change the direction of the economy forever. The New Economic Policy of 1991 dismantled much of the License Raj, reduced tariffs, and welcomed foreign direct investment. Public sector dominance was curtailed, and privatisation became the new mantra. Globalisation was no longer resisted but embraced as a survival strategy. India sought to integrate with global markets, compete internationally, and attract foreign capital.

Privatisation was not a mere economic policy; it was a paradigm shift. It redefined the role of the state from being the direct producer of goods to being a facilitator of private enterprise. Sectors like telecom, aviation, and banking were gradually opened to competition. Restrictions on imports were eased, and Indian companies were encouraged to compete globally. The reforms were not just about policy but about imagination. They marked a turning point in how Indians saw their economy: no longer only as a fortress of sovereignty but as a participant in global flows. For the middle class, this era brought new opportunities, multinational brands, modern services, and expanding consumer choices. For entrepreneurs, it unlocked dynamism, leading to the IT revolution and India’s emergence as a hub of software and outsourcing.

Yet, it is important to remember that privatisation was born not of luxury but of necessity. India had been forced to act, pushed by economic collapse and IMF conditionalities. Thus, while it opened new horizons, it also introduced new dependencies. The dream of self-reliance now had to coexist with the demands of global markets.

The Bright Side of Privatisation – A Rising India

The 1991 reforms, though born out of crisis, unlocked a wave of transformation that reshaped India’s economy and society. Privatisation and liberalisation infused efficiency into sectors once shackled by bureaucracy. Industries that had languished under state control began to thrive in the competitive marketplace. The telecom revolution is the most striking example. Once a luxury, telephone connections became accessible to millions. Liberalisation encouraged private players to invest, innovate, and expand. The explosion of mobile connectivity in the 2000s made India one of the fastest-growing telecom markets in the world, revolutionising communication, commerce, and even governance.

Similarly, the information technology (IT) sector emerged as a global powerhouse. Privatisation and openness to foreign investment allowed Indian companies like Infosys, Wipro, and TCS to become global leaders. India became synonymous with software services and outsourcing, providing employment to millions of educated youths and placing the nation firmly on the global economic map. Aviation, banking, and consumer goods also witnessed significant growth. Air travel, once confined to elites, became accessible to the middle class. The banking sector saw modernisation and improved customer service. Consumer markets are flooded with choices from multinational brands to domestic innovations, transforming lifestyles in urban India.

Privatisation also contributed to economic growth. In the two decades following liberalisation, India’s GDP growth accelerated, poverty rates declined significantly, and the middle class expanded. Integration into global supply chains gave Indian exporters new opportunities, while inflows of foreign investment brought capital and technology. At a symbolic level, privatisation broke the perception of India as a stagnant, closed economy. It projected an image of a rising India, confident, dynamic, and globally relevant. For many, the reforms were not just about economics but about dignity: they gave citizens a sense that India could compete with the world on its own terms.

The Dark Side of Privatisation – The Forgotten Millions

Yet, the gains of privatisation came with deep costs, often borne by those least able to carry them. For every story of rising IT campuses and thriving urban markets, there was a counter-story of dispossession, unemployment, and inequality. Labour insecurity became a defining feature. Public sector jobs, once seen as secure livelihoods with pensions and dignity, began to shrink. In their place arose contractual employment, marked by low wages, instability, and lack of social protection. For millions of workers, privatisation meant not liberation but precarity.

Rural India experienced widening neglect. While cities flourished with new investments, villages often remained stuck with poor infrastructure, limited healthcare, and vanishing public support. The promise of trickle-down growth often failed to materialise. The agrarian sector, in particular, bore the brunt: reduced subsidies, volatile global markets, and corporate entry left many farmers vulnerable. The continuing farmer distress and suicides in various states remain a haunting reminder of the uneven gains of privatisation. Inequality widened. The urban middle class expanded, but the gap between the rich and the poor grew sharper. The top 10% of India’s population came to control a disproportionate share of national wealth. Privatisation tilted benefits toward those with education, capital, and access, while leaving behind those without.

There were also concerns of foreign dominance. Opening the economy made India vulnerable to the interests of multinational corporations. Critics argued that economic sovereignty, once the core of nationalist imagination, was being diluted as Indian markets became playgrounds for global capital. Socially, privatisation weakened the sense of collective ownership that public enterprises once represented. The railway, the post office, the PSU factory — these had once been seen as symbols of the people’s India. Their decline eroded the emotional link between citizens and their economy. Thus, the bright side of privatisation cannot be celebrated without acknowledging the shadows. Growth was real, but so were the exclusions. For many, especially in rural and working-class India, the shift from nationalism to privatisation felt like moving from security to uncertainty, from pride to precarity.

Privatisation Today – The Modi Government’s Drive

Privatisation under the current government has not been a silent affair but a central pillar of its economic vision. Prime Minister Narendra Modi’s call for “Minimum Government, Maximum Governance” encapsulates a new phase in the privatisation journey. Unlike the crisis-driven reforms of 1991, the 2014–present wave has been more assertive, deliberate, and ideologically framed. One of the most notable moves was the disinvestment of Air India, India’s loss-making national carrier, to the Tata Group in 2021. This event was more than just an economic transaction; it symbolised the retreat of the state from sectors once considered too sacred to privatise. Air India, born in the Nehruvian era as a beacon of national pride, had become financially unsustainable. Its sale was seen by some as a pragmatic decision, while others viewed it as surrendering a symbol of the nation to private hands.

The government has expanded disinvestment across sectors: from BPCL (Bharat Petroleum) to public banks, insurance firms, and defence production units. The logic is consistent: the state should not waste resources running businesses where private actors can deliver more efficiently. Instead, the government argues, public money should be redirected toward infrastructure, welfare schemes, and nation-building projects. Privatisation is also tied to the government’s push for “Atmanirbhar Bharat” (Self-Reliant India). Critics argue this is paradoxical, selling public assets while calling for self-reliance, yet supporters claim that private-sector dynamism is essential for India to compete globally. The policy documents consistently frame privatisation as a way to unlock efficiency, reduce corruption, and stimulate growth. Yet the discontent is real. Labour unions, particularly in banking, railways, and insurance, have staged protests fearing job losses and erosion of workers’ rights. Farmers have expressed concerns about corporate entry into agriculture, which they associate with rising costs and loss of autonomy. Many fear that the aggressive privatisation drive risks deepening inequalities, as state retreat often hits the poor first and hardest.

In short, the Modi era has marked privatisation as not just an economic choice but a political ideology in India that envisions itself as a global marketplace, even at the cost of shrinking the role of the state in the everyday lives of citizens.

The People’s Voice – Locals in the Marketplace

Beyond government policies and economic graphs, the true story of privatisation lies in the lives of ordinary Indians. For them, privatisation is neither abstract nor neutral; it is a lived reality. In urban India, privatisation has reshaped daily life. The expansion of private banks and digital finance has made money more accessible, but also more fragile. Citizens celebrate fast services and modern apps, but many lament high fees, hidden charges, and the decline of the personal relationships once found in state-run banks. Private hospitals offer advanced care, but often at costs that push families into debt. Education, too, has been transformed: while private schools and universities provide opportunities, they remain out of reach for many, reinforcing cycles of inequality.

In rural India, privatisation has brought both hope and anxiety. Farmers, exposed to global markets, benefit when crop prices rise but suffer devastating losses when they fall. Corporate entry into seed, fertiliser, and retail markets has given some access to modern technologies, but has also left many vulnerable to exploitation. Villagers often complain that privatisation of basic services, like electricity or transport, makes life more expensive without always improving quality.

The voices of the working class reveal the sharpest contradictions. Contractual workers in private companies speak of long hours, uncertain contracts, and the absence of pensions or health benefits. Yet some also appreciate opportunities that did not exist before liberalisation. For many, privatisation is a double-edged sword: it promises opportunity but delivers insecurity. Despite these challenges, there is resilience. Locals across India continuously adapt to the privatised landscape, whether by learning new skills, embracing entrepreneurship, or forming unions to demand rights. Their voices remind us that privatisation is not only a story of policies and profits but of human struggle, adaptation, and dignity.

The Balancing Act – Can India Find the Middle Path?

The journey from nationalism to privatisation has not been a straight road but a winding path filled with contradictions. The real challenge for India today is not whether privatisation is “good” or “bad” but how to balance efficiency with equity, growth with justice. Public enterprises were born in the crucible of nationalism. They carried the promise of collective ownership, regional development, and jobs with dignity. Yet many of them fell victim to inefficiency, corruption, and political patronage. Privatisation exposed those weaknesses but, in doing so, also revealed new wounds: job insecurity, inequality, and loss of national assets.

The answer may lie in a hybrid model rather than extremes. Strategic sectors like railways, defence, and essential services may remain under public control to safeguard national interests and social equity. At the same time, competitive sectors like telecom, aviation, and consumer markets can thrive under private innovation. Such a dual strategy acknowledges both the moral weight of nationalism and the practical force of privatisation. Equally vital is regulation. Privatisation without accountability risks creating monopolies that exploit consumers and workers. Strong regulatory frameworks, transparent pricing, and protection for labour rights are non-negotiable. India must also invest heavily in social safety nets: healthcare, education, and rural development. These can act as shock absorbers, ensuring that the vulnerable are not crushed by the market’s harsh edges.

Finally, public discourse matters. Privatisation must not be treated as a technical matter of economics alone. It touches questions of identity, dignity, and sovereignty. The state must consult citizens, listen to unions, and engage local voices to prevent reforms from becoming top-down impositions. In this balancing act lies the test of India’s democracy: can it combine the dynamism of markets with the justice of the republic?

Conclusion – Privatisation and the Future of the Indian Dream

From the dawn of independence, India’s economic story has been bound to its political imagination. Nationalism once made the public sector a temple of pride. Liberalisation later made privatisation a beacon of efficiency. Today, both legacies collide in the lived experience of Indians. Privatisation has undoubtedly propelled India forward — modernising industries, integrating the country into global markets, and unleashing new opportunities. But it has also left scars: shrinking job security, deepening inequality, and the alienation of those who feel excluded from the new prosperity.

The future of the Indian dream depends on how India writes the next chapter. If privatisation becomes blind surrender to market forces, the dream may fracture into islands of wealth and oceans of despair. If, however, India forges a path that combines private efficiency with public responsibility, the dream can become inclusive not just for the privileged few but for the millions who toil in fields, factories, and informal jobs. The task ahead is not easy, but it is urgent. Privatisation must not erase nationalism’s ethical promise; rather, it must carry it forward into a new age. An India that values both growth and justice, innovation and dignity, profit and people will not only sustain its democracy but also inspire the world.

.    .    .

References:

• The Economic Times. (2021, February 1). Air India disinvestment to be completed in 2021-22; Rs 3,224 cr allotted to the aviation ministry. The Economic Times. https://economictimes.indiatimes.com
• India Today. (2021, October 1). Air India disinvestment: Tata Sons wins bid for national carrier. India Today. https://www.indiatoday.in
• The Hindu. (2024, May 16). Air India ceased to be the State or its instrumentality under Article 12 post disinvestment: SC. The Hindu. https://www.thehindu.com
• Business Standard. (2021, February 1). Air India disinvestment to be completed in fiscal 2022: FM Sitharaman. Business Standard. https://www.business-standard.com
• Firstpost. (n.d.). 25 years of liberalisation: A glimpse of India’s growth in 14 charts. Firstpost. https://www.firstpost.com
• Reuters. (2025, May 30). India’s economy grows 7.4% in January-March. Reuters. https://www.reuters.com
• Reuters. (2024, July 12). India plans to overhaul state-run firms to enhance profitability, departing from earlier privatisation plans. Reuters. https://www.reuters.com