India, with most of its people below the poverty line, needed a strong welfare system, where the state intervened to help the poor to avail the opportunities. It was clear that Soviet Union set very good examples for doing that while most Western Nations failed. The reason why we have so many freebies promised in the election manifesto
During 1930-35, Soviet Union had a robust economy. Many of its achievements ‘impressed foreign observers of all ideologies’. These Western nations saw ‘the breakdown of their own economic system’. Learning from Soviet Union became important and quite necessary. Countries like Belgium and Norway adopted plans similar to that of Soviet Union’s Five Year Plans. Hitler, a strong anti-communist, introduced his own ‘Four Year Plan’ along the lines of Soviet Union to virtually eliminate unemployment.
These days, it has become a fashion to criticize and ridicule Nehru for his socialistic economy model. However, most of the Indian leaders of 1947 were of the same bent, not Nehru alone. Most Indians leaders of 1947 welcomed and hailed Soviet style economy and touted it as the only solution to India’s problems. Capitalism, which imposed a completely unreliable and confused economy onto its people, was considered the least agreeable solution. If you were an adult during 1947, there was a good chance that you too would have been agreeing to the soviet style socialistic economy.
In 1976 , the preamble to constitution of was amended to read sovereign ‘socialist’ secular democratic country .However due to economic crisis and on the verge of being bankrupt, India had to make massive changes .The then Prime Minister , P.V Narisima Rao along with his aides embarked on to the polices of liberalization .Since then India has been able to maintain a good growth and is prospering.
Nowadays India follows a mixed economy model where one is allowed to start their business for profits.
Reference: Blogs online.