Let us take 3 or 4 cases how this liberalization (copying US) has affected a sizeable proportion of the Indian population:
(i) Unbridled inflow of foreign money killed the rate of interest on savings. (Remember India is "savings" oriented economy as against "spending" oriented philosophy of US). The pension corpus of the retired private sector employees got wiped out. The retired government employees were slightly lucky, in that the Government owned Provident Funds were subsidized by the budgetary allocations and they got about 8% return per annum on their investments. The tax paying community footed the bill
Are there any studies linking the FDI fluctuations to the savings rates? I thought that it is RBI's role to smooth this out with adjusting the money supply. By the way when you say 'savings were wiped out', how can Bank deposits be 'wiped out'? - I don't understand how this could be. Even if the interest payout is lower the original deposit plus all the accrued money from the past should be fine, right?
(ii) Once the newly retired community was "put to rest", the productive community was addressed to. Huge inflows into limited corporate entity of listed companies, saw stock prices rising day after day, inducing many to take stock trading as occupation. Speculation became the rule of the day with many leaving their jobs and selling their meagre land and mortgaging their houses put their money in stock markets. One fine day in January 2008 the FIIs realised that they have built-up capital to sustain them (FIIs) for the next ten years and withdrew the "foreign capital" causing the stock market to fall more than 100% in 2008-09. That left many of the budding stock traders shirt-less and laden with debts.
Again, I do not understand your math. If the Stock Market declined by more than 100%, that means the index fell below zero. What are you actually saying?
Investing in stocks is risky. That is why you have the 'Bull' and the 'Bear' symbolize the 'Greed' and 'Fear'. If people on their own volition with greed invested in this high risk game in high risk companies, they are 100% responsible. One can not blame the investment withdrawals in the equity market for that. Over a very long period of time, it has been shown that investing in good companies with long term potential in a fairly transparent market always returns higher averages, than say, saving rates, at least in US.
(iii) As if one speculation market of stocks was not enough, commodity market was opened to all and sundry. Agriculturists were trading in crude oil & precious metals and MBA students were trading in castor seeds & sugar. Needless to say the international speculators very soon divested the local Indians of their savings.
Ditto as above. A country's saving rate is important only if the borrowing costs for the country is high. If a country can borrow at lower rates than what it will pay for internal borrowing, it does not matter, does it?
(iv) Best minds of India (rank holders in IIT & IIM) whose studies were subsidized by Indian Government (and resultantly by Indian people) were recruited by International Bankers as "campus placements/recruitments" and their pay cheque of Rs. 100 million were so highly publicized in the media. The media does not cover what is their position "post-lehman/Post subprime crisis" era. What the common man wants to know is why waste 5 years of government money studying in modern IITs if one's interest is in finance and not in engineering.
Then don't subsidize anymore or subsidize on need basis. Govenment money not withstanding it should be a person's choice to pursue what he/she is interested in doing. Don't see the connection here with liberalization.
(v) Compulsory land acquisition in the name of "large scale infra projects" based on china model was the next best thing to happen. While the government was re-distributing the land of rich land-lords in 1950s, in 2010s they were busy in forcibly re-acquiring agricultural lands for re-distribution to "industrialists" for "industrial and infrastructural projects".
In every country this is done at least for Govt. projects with 'Power of Domain'. This is a political issue in India when it concerns land for Private Companies. Again I fail to see the connection between liberalization and this.
P.S.: Scams have not been taken into account.
How all the above "benefits" would turn India into a vassal state?
As long as India continues to be "reforming" and reaping the benefit as stated above, US would continue to extend support to India for obtaining permanent membership of the UN
India and US will conduct joint naval exercises
India and US will encircle China
US will use its good offices to take India out of the ban imposed by Nuclear Supplies Group
Of course India should continue to dance to the tunes of US on climate change, GATT, policy on Iran etc.
So what you are saying is that both countries have mutual self interests and can scratch each other's backs as friends. What is wrong with that? By the way, last time I looked, India did not go along with US on sanctions on Iran in UN, US sided with India and China on Climate change in Tokyo and did not mind when India refused to join in both wars against Iraq. Quite a 'vassal' nation, wouldn't you say? 
