The analysis of business groups: Some observations with reference to India

This paper uses some available but not necessarily commonly known information on Indian business groups as the basis for interrogating some of the recent analysis of the business group in developing countries, analysis which seeks to explain why such groups exist and their consequences. The paper argues that much of this analysis is unsatisfactory both in terms of the questions posed and also the research methods adoptedbusiness groups; india

Indian Capitalism: A Case that doesn’t Fit?

Abstract: This paper critically examines the ‘Varieties of Capitalism’ (VoC) School’s approach to constructing typologies of capitalisms with reference to the specific case of Indian capitalism. It emphasizes that two factors related to its origin and initial emergence remain crucial for explaining many of the key and sometimes very specific outcomes being generated by the operation of Indian capitalism in its current stage. These factors are, firstly, that Indian capitalism was born out of the womb of capitalist colonialism, and secondly, that no thoroughgoing agrarian transformation happened in India before or after independence. These have strongly conditioned capitalist development in India after independence, first under a more statist and protectionist regime till 1991 and subsequently under a more open and market‐oriented policy in the era of globalization. The transformational impact of this development has been consequently limited, even in comparison to other late‐industrializing Asian capitalisms, and insufficient to transcend these factors. Yet changes have happened over time, which lie behind the break state economic policy made with the past in 1991. The paper argues that such a combination of continuity and change poses some vexing problems for the characterization of contemporary Indian capitalism as a particular variety.Varieties of Capitalism; India; Third World

Investment and growth in India under liberalization: Asymmetries and Instabilities

This paper makes the case that the growth trajectory of the Indian economy in the post-1991 liberalization period is characterised by an inherent source of instability in manufacturing and industrial growth that distinguishes this period from the 1980s. This instability is a result of an investment-growth asymmetry that flows from a combination of a services-intensive growth pattern and a manufacturing-intensive investment pattern. These in turn reflect the pattern of demand expansion within the domestic economy as well as in external markets and also the reliance on private corporate investment as the driver of the economy’s investment process. In such ircumstances, the maintaining of the balance between capacity creation and demand expansion in the manufacturing sector becomes impossible. Investment is thus prone to a high degree of instability, which through its effects on demand, also makes industrial growth highly unstable. The services-intensive growth trajectory after 1991 is, therefore, more correctly viewed as one which is unable to fully utilize the capital accumulation potential of the economy rather than as a trajectory cheap in the use of capital. Correcting this problem however requires measures that are inconsistent with a liberalized economic policy regime.investment; growth; India; liberalization

On the Sustainability of India’s Non-Inclusive High Growth

Abstract: This paper examines the sustainability of the unprecedentedly high aggregate GDP growth witnessed in India from 2003-04 till the eruption of the global crisis. It argues that the post-liberalization highly non-inclusive and corporate-sector led growth trajectory in India suffers from a fundamental contradiction which renders it inherently unstable. This contradiction is between increasing dependence of growth on investment demand and the absence of a commensurate expansion of either output or employment in organized manufacturing, the main sector where rapid growth of capital formation tends to be relatively concentrated. This had already generated a collapse of investment and a manufacturing centered growth slowdown in the second half of the 1990s. The paper shows that high growth in India after 2003-04 did not eliminate this contradiction. Instead, the transmission effects generated by an exceptionally expansionary phase of the global economy enabled a sharp revival of investment which generated this growth, but in the process the contradiction started surfacing again. With the global crisis this phase came to an end, and in the post-crisis situation revival of that growth trajectory appears unlikely. In such circumstances even modest gains on the development front from via the positive effects of high growth on public revenues cannot be guaranteed.India; Corporate Investment; Non-Inclusive Growth

Big Business and Economic Nationalism in India.

Abstract: This paper emphasizes that economic nationalism in India both contributed to and coexists with the liberalization process initiated since 1991, which marked a decisive break in India’s economic policy and pushed her towards increased integration with the global economy. It is however an inherently more exclusive form of economic nationalism in which capitalist priorities press down harder on an already constrained state. India’s capitalists embraced rather than resisted the liberalization process, in contrast to their active support for a strategy of autonomous development at independence. The paper focuses on this shift in the outlook of the capitalist class represented by India’s big business and tries to identify the reasons why it initially emerged and why it has gathered strength over time. The paper argues that this transformation reflected the development and evolution of Indian capitalism resulting from industrialization under the older autonomous strategy. Embracing liberalization became both possible and necessary for India’s capitalists. The shift in the Indian state’s policy thus was a response to the imperatives of national capitalist development, and the state has continued to assist Indian capital’s growth and development in different ways. Indian capital has in fact gained increased leverage with the state and with its support has grown rapidly and stepped on to the global stage. In the process it has also changed – become less industrial, and more integrated into global production and financial systems. This growth and transformation of Indian big business in turn has reinforced its support for liberalization.Big Business; Economic Nationalism; India

Industry and services in growth and structural change in India: some unexplored features

This paper briefly presents an analytical description of the twin processes of growth of output and change in its composition in the Indian economy since independence, by looking at the time-paths of the two dimensions simultaneously. It suggests that three turning points located respectively in the mid-1960s, 1980, and the mid-1990s separate the entire period after independence into four sequential phases of growth and structural change. This periodization of India’s post-independence economic history points towards the need to go beyond relating the dynamics of the Indian economy to exclusively the degree to which the prevalent economic policy regime was interventionist or liberal in different periodsGrowth; Structural Change; India

Crony Capitalism and India: Before and After Liberalization

This paper, the second in the series, initiates the examination of the nature of the relationship between private capital and the State in India. While the principal focus is on the present context of India under a liberal economic policy regime, both the past of Indian capitalism and the past discussion on the concentration of economic power are also brought into the picture to substantiate the key arguments. The paper provides theoretical and also some limited empirical substantiation for the proposition that unlike what would be the prediction of crony capitalism theory, liberalization, rather than reducing the degree of subordination of public authority to private capital, has only facilitated an enhanced degree of state captureIndia; Crony Capitalism; Liberalization; Concentration

Crony Capitalism: Caricature or Category?

This paper, part of a series on Crony Capitalism and Contemporary India, examines the conceptual meaning of the term crony capitalism, which has acquired considerable popularity since it was used as an explanation for the East Asian crisis. The paper argues that the conception of crony capitalism as a description of a distinct kind of capitalism associated with the State playing a key role in the allocation process suffers from serious deficiencies and therefore does not provide a suitable framework for understanding the business-state interaction. While the phenomenon that is called cronyism is very real, it is widespread in modern capitalism and not a peculiar feature of capitalism characterized by a particular economic policy regime. In fact, crony capitalism may lie at the very heart of the contemporary global capitalist order, and this crony capitalism may explain why the concept of crony capitalism has acquired such prominence in recent timescrony capitalism; business-state relations; corporate finance; state intervention

Big Business and Economic Nationalism in India.

Abstract: This paper emphasizes that economic nationalism in India both contributed to and coexists with the liberalization process initiated since 1991, which marked a decisive break in India’s economic policy and pushed her towards increased integration with the global economy. It is however an inherently more exclusive form of economic nationalism in which capitalist priorities press down harder on an already constrained state. India’s capitalists embraced rather than resisted the liberalization process, in contrast to their active support for a strategy of autonomous development at independence. The paper focuses on this shift in the outlook of the capitalist class represented by India’s big business and tries to identify the reasons why it initially emerged and why it has gathered strength over time. The paper argues that this transformation reflected the development and evolution of Indian capitalism resulting from industrialization under the older autonomous strategy. Embracing liberalization became both possible and necessary for India’s capitalists. The shift in the Indian state’s policy thus was a response to the imperatives of national capitalist development, and the state has continued to assist Indian capital’s growth and development in different ways. Indian capital has in fact gained increased leverage with the state and with its support has grown rapidly and stepped on to the global stage. In the process it has also changed – become less industrial, and more integrated into global production and financial systems. This growth and transformation of Indian big business in turn has reinforced its support for liberalization

Neo-Liberalism and the Rise of Right-Wing Conservatism in India

This paper assesses the origins and the consequences of the decisive right wing shift in Indian politics ushered in by the 2014 elections. Tracing this to long-term but not linearly developing tendencies in Indian politics, the paper relates these with the distinctive nature and history of capitalist development in India, particularly the sharply polarizing growth and accumulation regime of the neo-liberal era and the crisis it now confronts. Asserting that the electoral success of the Narendra Modi-led BJP was based on it being the political agent of not change but of a reassertion by India’s economic elite, the paper explains the challenge of managing sharply contradictory interests that this places in the path of the consolidation of the new regime