Then there is the claim from some academic (and most official) economists in the ’90s that growth in the ’80s was slower than in the ’90s, that it was unsustainable and that it was without a vision. As regards “causes”, Meghnad Desai sums up the dominant argument outside India: “Opening out the economy to foreign borrowing on official account in the ’80s was the beginning of an admission that self-reliance was not a successful strategy.” After all, “a lifetime of living off tariffs and subsidised interest rates has inured the big business classes against the virtues of competition.” Thus the argument that the policy systems of the ’80s were designed to establish a cosy relationship between the capitalists and the establishment is factually incorrect. By the mid-’80s, around two-thirds of Indian industry was out of domestic controls. Eighties’ policy broke the back of the one-to-one link between the bureaucrat and the capitalist and it was very clear that global reform was to come next.

Rajiv was very clear about this.

Then there are reasons. Dani Rodrik and Arvind Subramanian said that ’80s growth was because of a business-friendly regime. That ignores the strategic nature of policy-making then. The development of industry-level rules rather than firm-level intervention, of competition at home to lay a transition for later reform and the use of trade and fiscal policies for these objectives have been extensively described elsewhere. Recent converts to Indian growth were wrong when they said India was not growing. They are wrong now when they say it was growing but for the wrong reason. 

... contd.