Economy Reviews

‘Business and Politics in India’ review: Coming up short

Examining a lopsided economy where growth is dependent on state levers

One reason the second UPA government suffered an angry backlash from voters was its visibly poor management of tensions between business interests seeking favourable policies and the market-economy imperative of a level playing field. The 1991 liberalisation, it was hoped, would see the policy framework graduate from being pro-business to pro-markets. But has it?

Vast swathes of the Indian population — informal sector workers that constitute more than 90% of the work force and rural Indians — continue to remain on the margins of the market economy. While some progress has been made in those areas where the business class stands to gain, the reforms that would benefit the masses mostly remain pending.

Indeed, a peculiarity of the BJP-led government is its preference for an economic system in which rather than market forces and private enterprise, growth is dependent on state levers — public investments in infrastructure and a model of redistributive schemes such as for houses, toilets and other handouts to the disadvantaged. This lopsidedness of the Indian economic system is an under-studied area.

Tilt towards business

Business and Politics in India, as the title suggests, tries to address the gap. It examines the accelerated shift in the balance of political power — in ways both direct and indirect — towards business. Scholars analyse the nature of business power and the manner in which it shapes political change in India.

Business had started aligning with more and more right-of-centre political forces, both within and outside the Congress, during the tenure of Indira Gandhi. But Narendra Modi is the first prime minister openly anointed by captains of the business community.

A striking example cited is of the pro-business policies attempted by the Communist Party of India (Marxist), despite its relatively lower dependence on corporate finance, when it was in office in West Bengal.

The analyses of influence on policies concerning two factors of production, labour and land, show labour’s position is already increasingly under threat as a consequence of the pro-business skew.

The book concludes that business power has moved to agenda setting power, that is power to mould future patterns of political and social change. These powers have limits, and they remain focussed on rent-seeking, rather than actively seeking to mould urban politics.

The population excluded by the market economy, the informal labour and rural segments, is unlikely to passively let business dominance over the state go unchecked beyond a point.

The play of the pro-business dynamics is compared across three States: Odisha, Tamil Nadu and Gujarat, where private industry already played a much more significant role in the economy even before 1991.

Business and Politics in India; Edited by Christophe Jaffrelot & others, OUP, ₹750.

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Printable version | Feb 20, 2020 7:19:42 AM |

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