Emerging Markets are nations whose economies are transitioning or have recently transitioned from heavy state control to economic policies that are more market-oriented. These countries are often very attractive to outside investors. This is the case of India.
India celebrated its freedom from the British Empire. Mahatma Gandhi was the father of independence. His economic ideal was a simple India of self-sufficient villages. Pandhit Nehru, the first prime minister, wanted to industrialize and combine British parliamentary democracy with Soviet-style central planning. All economists in the world, were advising the Indian government. And the advice was that they must have a state-led model of industrial growth; the public sector must occupy what came to be called the commanding heights of the economy. And that's why steel, coal and machine tools were in the public sector and not in the private sector. These particular industries are very important as coal leads to electricity, and steel to transport and machinery.
Nehru wanted to apply science and technologies to solve the great mass poverty that prevailed at the time of independence. He was always recruiting intellectuals in India on his side in the cause of central planning. Nehru asked Mahalanobis (a genius statistician) to think about how to plan an economy. The brilliant Mahalanobis succeeded in expressing the entire Indian economy in a single mathematical formula. His model was hailed as one of the pioneering mathematical models for planning a mixed economy. India became the model of economic development for newly independent nations. The apparent success of communist countries like the Soviet Union and China seemed to show the way.
Like the Soviet Union, India had used central planning (is an economy where all economic decisions are made by the government, eg. Cuba, the govt. decides what to produce, how is to be...