Introduction:
The economic policy of liberalisation, privatisation, and globalisation (LPG) introduced in India in 1991 has significantly diluted the socialist credentials of the Indian state. This policy shift was initiated to propel economic growth, attract foreign investment, and integrate India into the global economy. However, it has led to a transformation in India's economic structure, undermining the socialist principles that were the foundation of the Indian state since independence.

Liberalisation:
Liberalisation involved the removal of various restrictions and regulations on the economy, allowing for greater market-oriented reforms. This has led to:
1. Reduction in government control: The state's control over various sectors, including industries and trade, has been significantly reduced. The emphasis has shifted towards private enterprise and market-driven forces.
2. Dismantling of the license-permit raj: The system of licenses and permits, which stifled entrepreneurship and promoted corruption, has been abolished. This has provided greater opportunities for private players and resulted in increased competition.

Privatisation:
Privatisation refers to the transfer of state-owned enterprises to the private sector. This has diluted the socialist credentials of the Indian state in several ways:
1. Decreased public ownership: The government has divested its stake in numerous public sector enterprises, leading to a decrease in public ownership. This move signifies a shift from a socialist model towards a more capitalist approach.
2. Emphasis on profit maximisation: Privatised companies are driven by profit motives rather than social welfare. This shift in focus has led to a reduced emphasis on providing affordable services to the masses.

Globalisation:
Globalisation involves integrating the Indian economy with the global market. While it has brought several benefits like increased foreign investment and access to advanced technology, it has diluted the socialist credentials in the following ways:
1. Opening up of markets: The Indian market has been opened up to foreign competition, leading to the influx of multinational corporations. This has resulted in the dominance of market forces over state control.
2. Inequality and exploitation: Globalisation has led to income disparities and exploitation of labor, undermining the socialist principle of equitable distribution of wealth.

Conclusion:
The economic policy of liberalisation, privatisation, and globalisation has undeniably diluted the socialist credentials of the Indian state. While it has brought economic growth and development, it has also led to a shift towards market-driven forces, reduced public ownership, and increased inequalities. The challenge for the Indian state lies in finding a balance between economic growth and social welfare, ensuring that the benefits of development are shared equitably among all sections of society.