Indian Prime Minister Nehru was impressed with progress made by Soviet Union under Stalin. He never tried to find out the reality i.e. actual productivity, issue of human rights etc. He hired intellectuals who had certified themselves as leftist and declared India as socialist state.
As socialist he wanted to create a pro poor and anti-capitalist image for himself. For that he exempted agriculture from taxation. Idea was to encourage farmers to improve productivity.
Secondly he also wanted government to set up industries. So government was manufacturing everything from heavy engineering to bread.
His daughter continued policies of her father when she succeeded him.
Leftist were now occupying all the important positions in government. Government job was ideal for leftist who are by nature status quoist and lethargic. Soon a university was created to employ such leftists called Jawaharlal Nehru University. JNU became intellectual centre which produces second rate/third rate studies/literature and keep advising government over cup of tea.
So process is- sit in JNU canteen, have a cup of tea and with every sip give advice. Advice which is as useless and impractical as books and articles they write.
Anyway, result is India remains poor and has very few tax payers and there is limit to which you can keep taxing them. The tax to GDP ratio is very low. To make up for shortfall the government keeps increasing indirect taxes. So we have a strange situation where a socialist government keeps taxing poor.
Many public sector companies are making huge loss and manufacturing goods no one wants to buy, also, there is no hope of revival. But leftist and trade unions want these industries to continue and keep wasting tax payer money.
Good example of this is company called Hindustan Photo Films. Situated in hill station of Ooty, they manufacture black and white films, under brand name INDU- product no one wants to buy.
Every time government tries to close it, there is demand for revival, i.e. waste tax payer’s money on manufacturing product no one wants to buy. It was declared sick company in 2003, but continued operation, again in 2013 it was declared sick, but even today it is not fully closed. Workers and unions still feel that somehow they can make it profitable!