India stands today at the threshold of a historic intellectual correction. As the nation embraces entrepreneurship, global integration, and rising economic confidence under Narendra Modi, it is finally shedding the weight of the Nehru-era socialist model. But India cannot fully understand the significance of this shift without reassessing its past honestly, without the blinders imposed by decades of carefully controlled narratives.
One of the most unexpected truths hidden from generations of Indians is this: Muhammad Ali Jinnah, long demonized in Indian political imagination, was far more modern, liberal, and capitalist in economic thinking than Jawaharlal Nehru, whose socialist vision built a restrictive state that held India back for half a century.
This is not a sentimental claim. It is grounded in historical and economic reality.
Jinnah was shaped by a Western liberal education. He valued individual freedom, commercial energy, and limited government. He was admired by lawyers, business leaders, and modernists. Nehru, in contrast, viewed socialism almost as an article of faith. Immersed in Fabian ideology and deeply impressed by Soviet style central planning, and further influenced by ideologues like V K Krishna Menon and statist planners like P C Mahalanobis, Nehru constructed an economic system that distrusted private enterprise, punished wealth creation, and placed bureaucrats above innovators.
That path was not taken unknowingly. It was taken despite clear warnings.
Warnings Nehru Ignored
Some of the sharpest minds of the time understood the dangers of a state-heavy model long before India was locked into one. J R D Tata, Minoo Masani, C Rajagopalachari, and Sardar Vallabhbhai Patel all urged Nehru to choose openness over control, competition over centralization, and trust in enterprise over state domination.
Minoo Masani in particular stood out. Widely regarded as the natural choice for India’s first finance minister, he possessed the clarity and intellectual grounding to build a modern capitalist economy from the start. But Nehru did not tolerate dissent. Masani was sidelined and sent to an insignificant ambassador post in Brazil, an unmistakable message that pro-market thinking would not be welcome. Nehru’s decision was not routine administration. It was political punishment, a warning that anyone who challenged the socialist direction of the state would be pushed aside, no matter how essential their ideas were for a modern economy.
Rajagopalachari later founded the Swatantra Party to fight the suffocating economic controls Nehru had unleashed. Patel believed India’s unity and economic strength required federal freedom and private enterprise. Tata repeatedly cautioned Nehru that excessive state authority would suffocate Indian industry.
But Nehru’s mind — and Menon’s mind — was firmly set. They wanted a controlled economy, not a free one.
How Socialism Held India Back
The consequences were severe. India entered independence with extraordinary potential, only to spend the next decades trapped in scarcity, slow growth, and regulatory strangulation. Innovation withered inside the license quota permit system. Investment was discouraged. Wealth was demonized. Creativity suffocated.
Millions of Indians were pushed to seek opportunities abroad because their own country refused to free its economy. By the late 1980s, India remained one of the poorest large economies on earth despite its vast human capital.
Supporters of Nehru often repeat the argument that India was too poor in 1947 to adopt a free market system. But global history dismantles this justification immediately.
The Myth That India Was Too Poor for Capitalism
After World War two, Japan lay in ruins. Germany was flattened. Italy was devastated. France, Belgium, Austria, the Netherlands, and much of western Europe were bankrupt and destroyed. Yet every one of these nations rebuilt rapidly through massive inflows of foreign investment, open economic cooperation, and global partnerships.
Foreign direct investment rebuilt Europe.
Foreign capital modernized Japan.
Foreign partnerships revived entire industries from scratch.
Yet at that exact moment when the world opened its doors, Nehru shut India’s. Driven by ideological fear of foreign influence, he banned foreign direct investment almost entirely. At a time when nations that opened up surged ahead, and nations that closed down collapsed, Nehru sealed India from opportunity.
India paid the price for the next forty years.
The Quiet Correction by P V Narasimha Rao
After decades of stagnation, India finally found a reformer within the same party that had worshipped Nehru. In 1991, P V Narasimha Rao quietly reversed the very philosophy Nehru had imposed on the nation. With India on the brink of bankruptcy, Rao dismantled state controls, deregulated industry, welcomed foreign investment, and pushed India into global markets.
He did this quietly because Congress would never have allowed an open rejection of the Nehru legacy. But his reforms saved India’s future.
Even today, his contribution remains undercelebrated because it contradicts the political mythology of his own party.
Now, as India grows under Modi, the country stands at the same ideological crossroads once again.
Liberalization in small doses is not enough. India must not slip back into Nehru-style protectionism. Yet recent signs are concerning: rising tariffs, increasing controls on capital movement, tighter repatriation rules, and growing state intervention.
This is not progress.
This is not confidence.
This is not nationalism.
This is fear — the same fear Nehru had, the fear of openness, the fear of competition, and the fear of foreign capital. India will not become a superpower by counting pennies and erecting tariff walls. A great nation grows by engaging, competing, inviting investment, and trusting its own people.
The Cabinet Mission Plan and the India That Could Have Been
To understand how India arrived at this distorted economic and political structure, we must revisit a critical turning point in pre-independence India.
Clement Attlee’s Cabinet Mission Plan in 1946 represented the last meaningful effort to keep India united. It offered a flexible federal structure with three autonomous zones and a limited central authority. Contrary to what later NCERT narratives claimed, Jinnah accepted it. The Muslim League accepted it. Many Congress leaders accepted it.
The Plan was workable. And with a fourth southern zone, as I propose, India could have evolved into a federation similar to the modern European Union, with integrated markets, shared mobility, and balanced autonomy.
This vision was not impossible. It was rejected largely because Nehru insisted on a centralized state with sweeping authority. That insistence shattered the fragile consensus and pushed the subcontinent toward partition.
India and Pakistan as Natural Civilizational Brothers
At this point, India must confront another truth buried beneath decades of emotional conditioning. India and Pakistan are not strangers. They are children of the same civilizational family. Language, culture, food, music, family values, emotional temperament, humor, social habits, and civilizational memory all come from the same foundation. The border created in 1947 did not erase thousands of years of shared history. It only rearranged the political map.
In contrast, the idea of Indo-China Bhai Bhai, enthusiastically pushed in Nehru’s time, had no cultural foundation at all. India and China do not share deep civilizational roots. That friendship was a political creation, rooted in ideology rather than reality, and history proved how unnatural it was as soon as China attacked in 1962.
A nation cannot build its worldview on artificial friendships and equally artificial hatreds. The hostility toward Pakistan that many Indians inherited was taught through state institutions and textbooks crafted during the Nehru era, where the neighbor was framed primarily through a religious lens. No country can sustain permanent hatred for a neighbor based on religion alone. A mature nation must outgrow the narratives of its past and understand its surroundings with clarity rather than emotion.
Recognizing civilizational realities is not a weakness. It is maturity. It is clarity. It is history.
Nehru, Menon, and the Cost of Utopian Idealism
The obstacle was Nehru. His insistence on a powerful centralized state destroyed the fragile consensus. Partition became inevitable because New Delhi demanded absolute power.
The tragedy deepened when Nehru followed political centralization with foreign policy idealism and economic isolation. With Krishna Menon amplifying his worldview, India leaned toward the Soviet bloc, distrusted Western capitalism, underestimated China, and suffered the humiliation of 1962.
Pakistan, ironically, aligned more closely with Western economic systems and with the United States, while India sank deeper into central planning and scarcity.
During this entire period, Nehru quietly constructed an intellectual fortress around himself. The NCERT structure became a narrative machine designed to rewrite reality. It glorified his socialist experiments, erased the warnings of Tata, Masani, Rajagopalachari, and Patel, suppressed Jinnah’s liberal modernism, ignored Menon’s ideological extremism, and taught generations of Indians a curated version of their past.
Indians were conditioned, not educated.
Only now, as India awakens to its true potential, is a new generation breaking free from these inherited narratives.
India needs open markets, not restrictions.
India needs free movement of capital, not constant monitoring.
India needs confidence, not control.
India’s Future Depends on Confidence, Not Control
India today has the opportunity to complete the journey that began in 1991, but was never allowed to reach its destination. Narendra Modi has the mandate, the strength, and the public support to do openly what Rao had to do quietly. The question is whether he will embrace freedom or fall into the familiar temptation of control.
India must not repeat the economic errors of the past. Tariffs, capital controls, and regulatory tightening are not signs of strength. They are signs of insecurity. A confident India does not fear the world. A confident India competes with the world.
If Modi truly wants to build a thirty trillion-dollar economy bu 2047, then he must trust Indian talent, not restrict it. He must embrace global capital, not fear it. He must remove barriers, not erect new ones. He must open India to opporunity, not close it out of caution.
It took one man from Nehru’s own party to reverse the socialist model that had trapped India for decades. Now it will take a leader outside that dynasty to finish the job completely. India’s rise will not come from protectionism. It will come from courage. It will come from confidence. It will come from understanding that a nation of one billion people cannot be governed through fear-driven economic controls.
Disclaimer: Opinions expressed are solely those of the author and not necessarily reflect the views of financialexpress.com.
Vinson Xavier Palathingal is an engineer, entrepreneur, exporter, and policy advocate based in Florida and Washington, D.C. He is Executive Director of the Indo-American Center and has been active in U.S.–India relations, education reform, and immigrant community leadership for more than three decades. In 2020, he was appointed by President Donald J. Trump to the President’s Export Council.