The explosion of the atomic devises in Pokhran - though held by one and all within India as a demonstration of India's industrial power - was again seen by the foreign media as isolationist.

Actions, however, speak louder than words. The speed with which foreign investment proposals were cleared in the summer of 1998 made the cynics sit up and wonder. The resolution of the Suzuki embroglio, the implementation of vexatious proposal on privatisation of power in autumn of 1998 were further proof that as far as economic policy was concerned, the new government was driven by the free market and not by outmoded concepts ofsocialism of the Nehru days.

Globalisation has really gone on overdrive in the last few months. The passing of the Patent Bill was welcomed by the pharmaceutical and the information technology industries and the P/E multipliers of these stocks is an indication of the view of foreign investors on the matter. And then followed the Insurance Bill. Casting aside some strong-arm tactics of well-heeled and entrenched trade unions, the government was able to build up a strong consensus on insurance privatisation which is now expected to become a fact of life.

This was not all. The Urban Land Ceiling Act has been a mill stone round the neck of any form of property development in this country. Passed almost three decades ago at the height of our honeymoon with misguided Marxism (bank nationalisation, MRTP and Fera over the other notorious enactments of that time), Ulcra had made property prices above the reach of the growing middle class.

The only persons who benefited were the land mafia, the illegal occupiersof the properties and the politicians who made a killing doling out approvals just before the elections. Ulcra is now condemned to the archives and with the latest budget proposals, we are likely to see millions of middle class tenants own their homes.

One more important piece of the jigsaw puzzle has been put in place by the latest Exim policy announced by commerce minister Ramakrishna Hegde. Apart from the union budget, the Exim policy is the most important document that foreign investors look at for deciding on the direction of globalisation.Normally the focus tends to be on ``ex'' of the policy since export lobbies work overtime to get concessions from the government. This time also there have been many incentives for boosting exports. For the first time, service sector has been given its due place as the locomotive for export growth.In a world where global commodity prices are at 10 year lows, India's capability to increase exports through commodities is limited. Hence the accent on the serviceindustry is both timely and practical. Also interesting is the decision to go the whole hog for creation of Free Trade Zones. FTZs have been a remarkable success in the Far East and China and our EPZs are a poor substitute.

Knowing this, Hegde has decided to convert all EPZs into FTZs and rid our exports of procedural bottlenecks. Hand holding the exporter through the creation of port ombudsmen is recognition of the level of corruption the exporter had to contend with.

To me, however, the most significant aspect of the Exim policy is the ``in'' of it. In a move that has startled most people, the government has decided to remove quantitative restrictions on more than a thousand products. Vegetables (including onions) food stuffs, jams, jellys are all now importable. So are items which the middle class loves like CDs, sports goods, all forms of computers etc. It is likely that the Indian middle class will have access to every form of consumer products just like its counterpart in the US or Europe.

Thecommunication minister has taken a calculated gamble keeping in mind the surging foreign exchange reserves which are at a all-time high. He obviously expects the international community to shake off whatever doubts it had about India's commitment to globalisation. This should get translated into more foreign investment.

On a macro basis, the Indian psyche is essential capitalist. Over the last 5,000 years, the village communities have been built around private production and commerce. In a way capitalism fits perfectly into the right conservative thinking of the parties in power. The middle class can only hope that obscurantist forces of the extreme right or extreme left do not torpedo the passage of India towards being a great economic power.

The author owns a private investment banking firm in Delhi and is a former country head of Citibank's merchant banking division