This is not a very big gain, but it is certainly on the plus side. This spurt in growth should have led to political stability and we should have had a single party forming government at the centre, just as the Congress did during the first 30 years after independence. But this has not happened. We have been having khichdi governments since 1996, and there have been as many as four of them in the last five years. The current political situation is such that we may have to go in for yet another election next year, and quite possibly yet another government at the centre.
Liberalisation is by definition a disruptive process.
It churns up the economy, and along with it, the polity, since politics and economics are the two sides of the same coin. In a planned economy, changes are very slow and do not affect the society all that much. In a free-market economy, it is the market that decides the direction of development, and since, almost by definition, you cannot control free markets, you never know what impact they will have on the economy. This means that if you cannot stand up to competition, you go under, and those working for you lose their jobs. This is precisely what is happening in India today, and why things are so volatile, despite the fact that, going by GDP growth rates, the economy is doing better than before.