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The Elephant becomes a Tiger and flies to the Moon: India’s Political Economy
October 26, 2009
Quiz: How much does India’s mission to the moon cost?
“Hindu” rate of growth
Big state and state interventionism
No corporate growth, low corporate profitability
No global role
‘Miracle’ rates of growth
State less interventionist
End to license Raj
High corporate growth & profitability
Spectacular global role
Why this miracle?
“freedom” from the state
Globalization: free trade, more foreign investments, more active stock market
Why such inequality?
Still a lot of regulation
High dependence on agriculture
Not enough skills
“People are not able to take advantage of globalization”
“This wonderful story about economic growth in India is not quite a fairy tale. And everybody does not live happily hereafter. Both phases of economic growth had something in common.
Economic growth in independent India, respectable in the first phase and impressive in the second phase, was not transformed into development, for it did not bring about an improvement in the well-being of people. Independent India did make significant progress during the second half of the 20th century, particularly in comparison with the colonial past. But poverty and deprivation persist. In fact, there are more poor people in India now than the total population at the time of independence. And, in terms of social development, India has miles to go”.
“While the war meant misery . . . for the majority
. . . it also contributed to fabulous profits by
business groups taking advantage of the War
demand, the decline in foreign competition, the
price differential between agricultural raw materials..
and industrial goods, and the stagnation or
decline in real wages (Sarkar, 1983, pp. 171–172).”
“Yet war and famine also meant super profits for
some, and as in 1914–18, a major step forward for
the Indian bourgeoisie. . . . The really fantastic
increase was not in production but in profits,
particularly speculative gains through profiteering
in food, share market operations and the black
market in general. The Indian bourgeoisie was a
specific kind of bourgeoisie, characterised by a
‘ravening greed’, and a mania for speculation rather
than initiative or efficiency in production” (Sarkar,
1983, pp. 406–407).
Drivers of the ‘miracle’:
India’s Society and Social Relations
(producers of knowledge, particularly theology and
interpretation of religious texts
Khsatriya (ruling classes/ political elites/warriors)
Vaishya (business classes)
Sudra (manual and menial labourers)
Untouchables, now called Dalits (the downtrodden)
His two main thesis were:
The constitution was drafted by Dr. Babasaheb Ambedkar.
It became illegal to discriminate on the basis of caste or religion
Untouchability was abolished by law
Untouchables came to be categorized as Scheduled Castes
More faces of discrimination
Even with conservative estimates, it appears that more than 50% of India’s population suffers systematic disadvantage and depravation
On the 26th January 1950, we are going to enter into a life of contradictions. In politics we will have equality and in social and economic life we will have inequality. In politics we will be recognising the principle of one man one vote and one vote one value. In our social and economic life, we shall by reason of our social and economic structure, continue to deny the principle of one man one value. How long shall we continue to live this life of contradictions? How long shall we continue to deny equality in our social and economic life? If we continue to deny it for long, we will do so only by putting our political democracy in peril. We must remove this contradiction at the earliest possible moment else those who suffer from inequality will blow up the structure of democracy which this Constituent Assembly has so laboriously built up.
underlying social, political and economic structures (rather than factors such as lower access to education or jobs).
How did India try to address them?
Did they work?