India’s political economy – where is it headed?

A really stimulating discussion was held at IGIDR in May-2013 in state of India’s recent political economy developments. It looked at this rise in corruption along with growth in India.

Louise Tillin of King’s College provides a summary of the developments:

The need to better understand the shape of state-capital relations has been heightened by the coincidence of (a) high rates of economic growth alongside high-profile corruption cases since the early 2000s indicating the existence – in places – of collusive relations between state and capital; (b) pressing distributive conflicts arising from rising inequality as well as displacement, dispossession and environmental degradation which call into question the role of the state and political institutions in mediating these conflicts. The slowdown of overall growth rates in the last financial year has increased the immediate urgency to understand India’s contemporary political economic settlement in the face of these twin pressures.

The workshop was held at King’s India Institute, King’s College London. This summary of discussions will be organised thematically, as far as possible. It will draw out the main themes of deliberations, rather than seek to be comprehensive or to report discussions sequentially. The summary is not intended to present a uniform view of those present – that would not be possible – rather it is intended to summarise the main themes and questions that arose during deliberations. The workshop was opened by a presentation by Pranab Bardhan. Following this, a number of presentations were made by members of the group. The central threads of discussions can be captured under the following four headings: the balance between rentier and entrepreneurial capitalism; conceptualising regional variation in state-capital relations and its effects on economic performance; the shape of India’s private sector and distributive conflict.

Great read and variety of papers presented. I thought this one is worthy of a thought:

A final important thread running throughout the concerns of the workshop – and one that will be a central theme of future deliberations – was the question of distributive conflicts, and patterns of social and economic exclusion that have arisen in the context of India’s particular model of capitalist development.

Pranab Bardhan made the important observation that resolution of the conflict between the impulse for capitalist growth and the assertions by those dispossessed, and displaced in the process will determine the shape of capitalism going forward. He suggested that political parties are less able today to play a mediating role between these competing views and distributive conflicts, especially with the breakdown of intra-party democracy. For this reason, social movements and non-governmental organisations have become increasingly important, but these are often single issue and are therefore less able to discuss compromises and/or trade-offs.

A number of participants noted that in approaching such issues there was considerable merit in asking “old fashioned questions” about class, and answering them in “old fashioned ways” (to use R Nagaraj’s phraseology). Alpa Shah offered a definition of political economy focused on the transformation of “social relations and interactions between social groups” which lie behind the production of wealth, welfare and poverty. Sripad Motiram and Vamsi Vakulabharam’s paper drew attention to the utility of tracing cleavages of class, caste and region in understanding the nature of a state-level economic regime (in this instance, in the case of Andhra Pradesh). There was therefore considerable openness to multiple frameworks for studying India’s political economy.

Atul Kohli ended the meeting by reminding us that a failure of state lies behind India’s model of growth: India came to growth having failed to solve questions of redistribution. The Indian state ultimately had nowhere to go apart from towards a “pro-business” model in the late 1970s. But this meant that India arrived at growth before solving questions of (re-)distribution. This stands in contrast to east Asian states where distributive questions had been solved to a significant degree before growth began (“whether through communism or fear of communism”). Atul Kohli argued that India has probably moved towards an east Asian model in certain important ways, but that it is also very different to states of east Asia. Firstly, it shifted to a “pro-business” approach as a result of state failure, and secondly in India, a capitalist class already existed when a pro-business shift was enacted. In east Asia, by contrast, states brought capitalism into being – the state has had to be in a much more transformative role there because they were giving birth to capitalism. The Indian state was always going to be different – a facilitator rather than transformer.

Plenty of food for thought here…I mean papers on potential of Indian eco should just be ignored for a while..we need to get back to political economy of India..that is where bulk of the issues are..



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