Neoliberalism’s New Poster Child: Revisiting India’s “Growth Story”

Prof C. P. Chandrasekhar who retired from JNU in the TheIndiaForum article gives an alternative perspective on India Growth Story:

The advocates of neoliberal policies for the less developed countries have always derived their strength from pointing, often wrongly, to the exceptional economic performance of one or more countries that are identified as having adopted such policies and maintained a close and subordinate relationship with the advanced capitalist world. In the 1970s, South Korea and Taiwan were the favourites, though many pointed to the fact that these governments were by no means neoliberal in terms of their policy stance. The second-tier Asian industrialisers like Thailand and Malaysia, with their manufacturing export boom, were the choices in the 1980s and early 1990s. The Southeast Asian crisis of 1997 that resulted directly from the liberalisation of financial sectors in these economies deprived advocates of liberalisation of these ‘miracles’ that were showcased as examples of the benefits of neoliberal policy regimes.

For a time, China, recording spectacular growth while it embraced market-friendly policies and relied on export markets and foreign investment to raise rates of growth, appeared to offer an option. But what it lacked was the willingness to maintain a close, let alone subordinate, relationship with western powers. After a brief period of bonhomie, China became the enemy rather than an ally of neoliberal advance, accused of turning surreptitiously protectionist, stealing technology and trade secrets, and posing a geopolitical challenge to peace in Asia and elsewhere in the world.

The West needed a new neoliberal exemplar, and India given it size, its hostility to China, its willing to ally with the US, and with its commitment to neoliberal policies that has only intensified, was an obvious candidate. The difficulty was that India was no export-led manufacturing success. Rather, it was a failure as a manufacturing nation, with the share of manufacturing in total value added in the post-Independence era peaking at around 18 per cent, as compared to the 35-40 per cent standard set by the earlier models of neoliberal success.