Development has engaged the attention of economists for decades. There was great interest in ‘Development Economics’ in the post-war years, which waned in later years with the rising tides of globalisation and neoliberalism.
The Washington Consensus advocated by the IMF and the World Bank relies heavily on the ‘market’ to promote growth, displacing the state. Freeing of private trade and investment in domestic economies, when combined with the opening of the economy to global trade, technology and finance, was expected to put countries on autopilot on the road to growth. This was a delusion and overlooked the complex interactions and/ or conflicts between various classes and groups. The recession of 2008-09 put paid to the idea, and it became evident that both globalisation and neoliberalism were oversold.
India decided, albeit reluctantly, to adopt the ‘reforms’ advocated by the IMF in return for financial support to tide over an emergency that could have led to a default in global payments.
This year marks the silver jubilee of the reforms.
This book is an in-depth study of the transition of the Indian economy from a Marxist point of view, but it is not straitjacketed or ossified Marxism of the older vintage.
Professor Anjan Chakrabarti, for instance, has studied India’s transition by applying post-Marxist praxis. Commenting broadly on his contributions, scholars such as Stephen Resnik have remarked that he has convincingly set aside the traditional Marxist notion of ‘historical materialism’ and the newer subaltern studies.
The three authors apply the later-day Marxist approach of ‘class process’ in the book. The substantive contribution is where the authors describe India’s economic transition as epochal, materialising out of the new emergent triad of neo-liberal globalisation, global capitalism, and ‘inclusive’ development.
The book looks at a related debate on ‘development’ and its applicability in relation to the Third World. A Western style, capital-centric development creates a “third world” ready for exploitation and assimilation.
The authors explore the rise and impact of neo-liberalism, and the shifts in the policies of the government.
The argument is that neo-liberalism, far from being depoliticised, joins the political with the economic to shape a society that guarantees, in turn, the securing and expansion of global capital and creates dependency. It describes how neo-liberalism has displaced the underlying rationale of the state, and elaborates how policies of privatisation have adversely impacted sectors such as education, public health and social welfare.
Conventional development theory a la Arthur Lewis posits that with improvements in agriculture, surplus labour will migrate and be absorbed in the growing industrial sector. This did not happen in India.
Employment generation was not adequate to absorb the migrant labour and they swelled the ranks of the informal sector with low wages, creating jobless growth.
The authors show how neo-liberalisation not only cuts off social welfare and pays less money for work done, but also institutes a different conceptualisation of society. The book captures the conflicts and inner contradictions of Indian society that have accounted for the hiccups over reforms.
The Indian Economy in Transition: Globalization, Capitalism and Development; Anjan Chakrabarti, Anup Dhar, Byasdeb Dasgupta, Cambridge University Press, Rs. 995.
K. Subramanian is a retired Finance Ministry official who writes on economic issues.
