The State of Indian State

Gavish Lohat
Department of Political Science, Hindu College, University of Delhi

Winston Churchill once said “Capitalism is unequally shared wealth, while Socialism is equally distributed poverty”. The nature of the Indian state emanated from the deliberations of the Constituent Assembly, consisting of both individualists and collectivists who often tried to strike a balance, lacking a revolutionary fervour and refraining to fight over ideological interests in a mood of sedate compromise. According to Palshikhar, the Indian state had retained from colonialism the responsibility to expand capitalist production relations and to provide a basis for capital accumulation in favour of the industrial sector as the hallmark of development. What began as an ‘enthusiastic welcome for welfare state apparatus evolved by the Constitution’ was turned into the state being a mere facilitator with the coming of the Liberalisation, Privatisation and Globalisation (LPG) policies of 1991 [1]. The term ‘socialist’ was only added into the Preamble in 1976 with the 42nd amendment. B.R. Ambedkar opined for a stronger state to  bring about social and economic justice but he differed from Nehru who deemed the strengthening of the state necessary for overall development, followed by automatic social justice. India’s forefathers posited faith in a welfare state to keep a check on the growth of capitalism and facilitate the decline of feudalism. However, the land reforms remained largely unsuccessful. Liberalisation was viewed as a practical corrective measure to the excessively interventionist state, to break away from the ‘licence-permit quota raj’ (LPQ).

Jayal writes about the project of the welfare-state being gradually undermined and discredited in the wake of the ideological struggle between state and the market and the shifts in the economic policy by the virtue of globalisation [2]. She goes on to say that welfare in the form of institutionalised charity disables citizens, making them lack the will to work to  become ‘freeloaders’. In the words of Amartya Sen, a Social Liberal, welfare needs to be concerned with capacity-building. In a country like India, a majority of the population would simply cease to survive without welfare.
 
Sinha opines that the economic reforms of the 1990s project a healthy retreat by an over-regulatory and intrusive state [3]. The failures of the developmental state (1947-80s) are attributed to a strong state with an ‘iron-fist’ of controls and higher growth rates are linked to the market forces of liberalisation. The reforms of 1991 led to the abolition of industrial licensing and led to the integration of the economy with the world. Jayal argues that coalition governments with a strong regional base very well represent a large country like India and thus help reformation. Moreover, a consensus among parties enables them to pursue the process with multiple centres of power in a competitive spirit, which is not the case when the PMO is a single source of policy initiatives. Furthermore, a regionalised coalition government is the ‘linkage mechanism’ that aligns national and state governments to pursue a common goal. Parallels can be drawn with the ‘cooperative federalism’ approach adopted by the NITI Ayog, which replaced the Planning Commission in 2015, the primary agent of state led planned economy.
 
More than being a ‘planned’ move, Kumar thinks that the LPG reforms came in as an imposition from the World Bank and IMF, as a means to set up neoliberalism in developing countries and sanctioning loans for them [4]. He alleges free trade to be biased against the developing world, which is used by the Global North as a dumping ground for its products but makes exporting into their own countries much more difficult [4]. In his words, powerful countries dominate WTO and the poorer countries are faced with a ‘take it or leave it’ choice. Neo-liberalism undermines democracy by making unaccountable markets and international organisations predominant, and benefits the elite by extracting from the poor majority which translates into widening of income inequality. Although neoliberal reforms have resulted in massive economic growth, exchange rate stability and increased FDI, the cost of unsustainable migration, decreasing wages, awful working conditions, withdrawal of public investment, environmental damage, commodification, consumerism and ‘foreign technology fetishism’ (obsession with stereotypical symbols of modernity) looms large. The government might justify privatisation by saying that it would lead to productive efficiency but Kumar points out that it dehumanises citizens as mere cogs in a machine. Even education is not devoid of neoliberalism as it gets reduced to ‘academic capitalism’ in a bourgeois economy. Additionally, political participation gets limited to token visits to the polling booth. Lastly, the author juxtaposes neoliberalism (globalisation) with imperialism (power exercised by one state on another) and goes on to propose the restoration of state to the ‘key’ aspects from where it has been ‘expelled’ as a solution.

Surprisingly, Patnaik talks about the tendency toward simple reproduction in the Indian economy under neoliberalism, which indicates the fact that neoliberalism has reached a dead end, not just in India but across the world [5], referring to the idea of capitalism ending up in a ‘stationary state’. Marx had used ‘simple reproduction’ to describe a state where there is no net addition to production capacity and the economy just reproduces itself at the same level period after period. The Indian economy appears to be headed for such a state.

The unorganised sector has come to comprise 90% of the economy and is devoid of welfare and employment security. India lacks efficient bureaucracy, robust laws to protect consumers and environment and safeguards against corruption to pull off its neoliberal gig and is thus inviting threats like monopoly by capitalist companies, economic inequality, leaving a big question mark on welfarism, which has been pushed to the hindsight. Even where it is promised, it fails to reach the targeted beneficiaries. The trajectory of the political economy in India began with statism under the veil of a mixed economy, along with ‘Non-alignment’ in the international arena but was tilted towards socialism. Having made a neoliberal transition, it finds itself situated along the lines of social liberalism today with welfarism as a feature. This review examines a promise made during independence and closes in after signifying the dangers of a neoliberal state in an unequal globalised world. It becomes imperative to understand the changing nature of the state to learn from historical mistakes and correct the flaws of contemporary times in order to bring about a brighter future.

 
References

[1]    S. Palshikar, (2008) "The Indian State Constitution and Beyond', in R. Bhargava (ed) Politics and Ethics of the Indian Constitution, New Delhi: Oxford University Press.

[2]   N.G Jayal: (2001) The State and Democracy in India or What Happened to Welfare, Secularism, and Development' in NG Jayal (ed.), Democracy in India, New Delhi, Oxford University Press. Pp.2001 (sixth impression 2012).

[3]    A. Sinha (2010) An Institutional Perspective on the post-liberalization state in India" in Akhil Gupta and K. Sivaruma Krishnan (ed.), The State in India after Liberalization, An
Interdisciplinary Perspective. London: Routledge.

[4] Kumar, Rajiv. (2021). NEO liberalism and changing nature of Indian state (ch-6)

[5] Patnaik, Prabhat. (2022). “Indian Economy is on the Road to a Stable State of Zero Growth.” NewsClick.