India_a_changing_india_changing_world_ieim.ppt

India superpower,economics,liberisation,globalization,manmohansingh,reserves,infrastructure,1991,licence raj,private sector,pakistan,political,stability

1. A changing India in a changing
world: potentialities and realities
Mritiunjoy Mohanty
IIM Calcutta
IEIM, UQAM

2. Preview
•India’s economy appears to be entering a period
of self-sustained growth
•The obverse side of this growth is a severe
agrarian crisis, diminished social mobility and a
serious challenge to its secular fabric
•The result of suppression of the radical agenda
of the Indian constitution
•The choices India makes in addressing these
could help shape responses to new global
challenges

3. The upside: growth and take-off
•Economy growing at nearly 9% over the
last four years, i.e., from 2003/4 to 2007/8
•Will probably be slightly lower in 2008/9
•Per capita income growth has more
doubled
•Currently at 7.1%, as compared with 3.4%
experienced during the 1980s and 1990s

4. •2007 per capita income $965, PPP $4183
•China $2460, PPP $8788
•Canada $42,738 PPP $36,984

5. Investment and Savings Ratios
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
19 80-8 1 19 83-8 4 19 86-8 7 19 89-9 0 19 92-9 3 19 95-9 6 19 98-9 9 20 01-0 2
20 04-0 5 P
Investment Ratio
Savings Ratio

6. •Investment and savings ratios in the low 30s,
which would seem the requirement for modern
take-off
•Domestically financed, Current Account Deficit in
the range of 2%
•Increased inflows of capital
•Huge increases in inward market-seeking FDI in
the last 4 years
•Rising accretion of foreign exchange reserves
•Sustainable macroeconomics

7. Private Capital
•Indian private capital finally came of age,
showcasing itself in the $12 bn takeover of
Corus by Tata Steel, catapulting it no.5 globally
•Tata Motors, currently no.2 in India in cars,
frontrunner in the bidding for Ford brands Jaguar
and Landrover
•Corporate India on a global buying binge
•Outbound FDI now almost equal to inward FDI.
Next year it is predicted to be higher

8. Public Sector
•A public sector renaissance
•Partial privatisation
•Privatisation stopped because of political and
union resistance
•On 21
st
Jan 2008, 7 public-sector firms in Top20
by market capitalisation and 14 in the Top50
•End of 2000, there were 5 in the Top20 (one of
which has been sold) and 8 in the Top50

9. Science and Technology
•India’s science and technology, seems finally to
find its feet.
•In January 2007, ISRO successfully recovered
an orbiting satellite.
•It is a technology that only China, the EU,
Russia and the USA possess.
•In April 2007 ISRO commercially launched and
Italian scientific satellite Agile into orbit and
entered the international satellite launch market.
•In January 2008 commercially launched an
Israeli spy satellite.

10. •Successful launch of the Geosynchronous
Satellite Launch Vehicle, (GSLV-F04),
which placed a 2-tonne communication
satellite, INSAT-4CR into orbit.
•Successfully tested an indigenously made
cryogenic engine to power GSLVs
•Indian made super-computer ranked in the
top-10 in the world

11. The international stage
•Major player in the Doha Round of WTO
negotiations
•Important G24 member: coalition of
shared interests
•Expanded G8
•The Indo-US nuclear deal and the
recognition of India as a nuclear power
without signing the NPT

12. The downside
Unsustainable inequality
•Agrarian crisis and land hunger
•Poor quality of jobs
•Caste inequality related violence
•Diminished social mobility as upper caste
use access to higher education as an
entry barrier to good jobs
•Deep strains on its secular fabric

13. Unsustainable Inequality
•The gini coefficient has gone up from 32.9 to 36.2
between 1993-2004
•Over the same period, for the bottom 20% of the
population, per capita expenditure has grown at 0.85%
p.a. while for the top 20% has grown at 2.03% p.a.
•In China the comparable statistics are 3.4 and 7.1%
•That is for China’s bottom 20% expenditures rise 4 times
faster than India’s.
•It is this lack of growth at the bottom which makes
increasing inequality potentially unsustainable

14. …. because
•An unprecedented agrarian crisis of livelihoods, income,
employment and profitability has beset rural India for
more than a decade
•55% of India’s workforce is employed in rural agriculture
•Of the remainder, 75% is employed in the informal
sector, most of whom do not earn even minimum wage
•Almost 97% of new non-agricultural jobs created
between 2000-05 in the informal sector.
•88% of Dalits (lower castes) and Adivasis (tribes people)
population, 80% of Other Backward Castes (OBCs or
middle castes) and 84% of Muslims belong to the
“category of the poor and vulnerable”. These groups
constitute roughly 75% of the population

15. … and therefore
•Land related violence
•The resurgence of armed left-wings
movements
•Caste related violence
•Not just social but political as well
•Six years later, victims of the Gujarat
pogrom still live in refugee camps and
have not been able to return home and
there has been very little calling to account

16. The Indian Constitution –radical and
conservative
•Subaltern school of Indian historiography
demonstrated how widespread and democratic
the movement for independence was
•Explains the radical core:
•Constitutionally mandated land-reforms
•To fight caste discrimination, affirmative action
for Dalits (lower castes) and Adivasis (tribes
people)
•A secular republic based on universal adult
suffrage

17. •The federal government was constitutionally
denied powers to tax agricultural incomes and
agriculture was to remain a purely provincial
subject in terms of legislative domain
•Small but influential urban bourgeoisie pushed
for and got a strong federal government–
therefore a quasi-federal structure
•Affirmative action for OBCs (middle castes)
successfully resisted

18. Elite Pushback
•Intermediary rights and landlordism was successfully
abolished
•No distribution of surplus land
•As land transfer got caught up in litigation, bureaucratic
obfuscation and lack of political will
•Control over bureaucratic apparatus and judicial system to
ensure that constitutionally guaranteed Dalit (lower caste)
and Adivasi (tribes people) quotas did not get filled.
•Particularly in the higher echelons of the bureaucracy,
judiciary and the public sector and universities
•Roll-back of affirmative action for OBCs (middle castes)
•Therefore by the late 1960s, UCH (upper caste hindu)
elites, used combination of cooption and blocking
strategiesto suppress the radical agenda
•Very little political mobilisation around radical agenda

19. Elite responses, resource mobilisation,
growth and poverty alleviation
•1960s droughts and a crisis of agricultural productivity
•Green revolution
•Naxalbari –peasant movement –crushed
•Indian state also responded by investing in agriculture in
particular (irrigation) and rural areas in general (rural
electrification and rural credit etc) on the back of which,
driven by both public and private investment, green
revolution technology spread
•Allowing for a revival of agricultural growth and
profitability from around the mid-1970s
•the rise of the rural bourgeoisie which comprised also
OBCs (middle castes)
•1980s growth of alongside poverty alleviation and
declining inequality
•Resource mobilisation, debt and BOP crisis of late 1980s

20. Reforms and growth: the rise of the urban
bourgeoisie, the agrarian crisis and land
hunger
•Early 1990s reforms nonetheless epochal
because they marked the rise to dominance of
the urban bourgeoisie
•Collaboration with global financial capital
•Industrial de-regulation, financial liberalisation,
trade
•Increasing globalisation of the economy
•1990s growth urban and self-contained
•Starving of agriculture for resources
•Financial liberalisation and agrarian crisis
•Need for land and land hunger

21. Deepening of democracy and lower caste
political mobilisation …
•Affirmative action in politics
•ensured that there were seats for Dalits (lower castes)
and Adivasis (tribes people) in all publicly contested
elected bodies, from the parliament downwards to now
the panchayat.
•Politics of affirmative action –lower and middle caste
mobilisation around quotas
•It is this political mobilisation and the consequent access
to political power that probably explains one of the most
truly remarkable aspects of India’s democracy –that in
India it is the poor and not the rich who are more likely to
vote
•Upper caste response –politics of religious identity

22. •The 2004 defeat of the BJP-led coalition
•The coming of the Congress-led UPA
•Rural employment guarantee scheme
•Power of the urban bourgeoisie
•Continuing agrarian crisis

23. …. new players and tradeoffs
•India’s first low caste (Dalit) chief minister at the head of
Dalit majority government
•Changing elites –the rise of the urban bourgeoisie and
the a largely upper caste hindu middle class
•Eclipse of the rural bourgeoisie
•Deepening agrarian crisis and caste conflict
•Agrarian crisis and financial liberalisation
•Tradeoffs -land reforms will not be supported by rural
bourgeoisie
•Tradeoffs -non-farm employment for reducing poverty –
rural biased growth strategy will not be supported by
urban bourgeoisie

24. … the choices we make
•The struggle for more equitable growth is
also a struggle for a more secular India
•The choices we make

25. The changing world
•BRICs
•A European renaissance
•The rise of China
•The challenge of the environment
•Living with Difference

26. •Two paths leading to Rome –the chinese
and indian
•The notion of community and the
environmental challenge
•Bolivia, democracy and the Aymara
Indians
•Indian secularism –accepting difference
rather than accommodating it.
•Democracy as a radical project