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Abstract
Have neoliberal policies truly yielded beneficial effects for India? ‘Two Decades of Market Reform in India’ presents a collection of essays that challenge the conventional wisdom of Indian market reforms, examining the effects of neoliberal policies enacted by the Indian government and exploding the myths that surround them. In particular, the volume questions the perceived benefits of India’s reform policies in the areas of growth, agriculture, industry and poverty alleviation, and examines how the government’s focus on preventing a fiscal deficit caused a large-scale decline in development expenditures, which in turn has had a negative impact on the well-being of the poor. With its rich and insightful analysis, ‘Two Decades of Market Reform in India’ bravely shines a light on the true implications of India’s neoliberal governmental policies, and provides a revealing indication of how policy reform since 1991 has, at times, detrimentally affected the general populace of India.
Sudipta Bhattacharyya is Professor of Economics at Visva-Bharati University in Santiniketan, West Bengal, India.
‘“Two Decades of Market Reform in India” provides a powerful corrective to the simplistic, celebratory views of the Indian economy that have prevailed since the country embarked on neoliberal reforms in 1991. A must-read for anyone interested in understanding the ongoing economic transformation of India and its social and political implications.’ —Jyoti Saraswati, New York University and author of ‘Dot.compradors: Power and Policy in the Development of the Indian Software Industry’
‘After more than two decades of liberalization and privatization, this is a comprehensive assessment, which helps us to understand why policies have not been a way out of underdevelopment, inequality and poverty, but actually have fortified the process of a lopsided, elite-oriented development.’ —G. K. Lieten, Professor Emeritus, University of Amsterdam
Have neoliberal policies truly yielded beneficial effects for India? ‘Two Decades of Market Reform in India’ presents a collection of essays that challenge the conventional wisdom of Indian market reforms, examining the effects of neoliberal policies enacted by the Indian government and exploding the myths that surround them.
The volume addresses three key areas. Firstly, it investigates how the high growth rate of the Indian economy has made it uneven, vulnerable and liable to poor employment generation and agrarian crises. The text refutes the hypothesis that growth in India has been driven by domestic factors, and argues against the notion that the Indian economy has remained unaffected by the global economic meltdown. The volume also investigates the reduced demand for food grain during the reform period, questioning whether it was indeed a result of increased income, as suggested by the government, or rather a consequence of increasing poverty and agrarian crisis. [NP]Secondly, the text counters the neoliberal myth that a fiscal deficit is essentially bad, and examines how the government’s focus on preventing a deficit caused a large-scale decline in development expenditures, which in turn had a negative impact on the well-being of the poor. Finally, the volume also argues that there is no evidence that supports denationalization as an effective way to reduce fiscal deficit, as the public sector, it argues, is not necessarily less efficient than the private sector.
Striving to hold India’s market reforms – and those responsible for their implementation – to account, ‘Two Decades of Market Reform in India’ bravely shines a light on the true implications of India’s neoliberal governmental policies. With its rich and insightful analysis, it provides a revealing indication of how policy reform since 1991 has, at times, detrimentally affected the Indian populace, and will serve as an invaluable resource for students, professionals, activists and policymakers interested in the socioeconomic future of the country.
Table of Contents
Section Title | Page | Action | Price |
---|---|---|---|
Two Decades of Market Reform in India_9780857283269 | i | ||
Title | iii | ||
Copyright | iv | ||
CONTENTS | vii | ||
LIST OF TABLES AND FIGURES | ix | ||
FOREWORD | xiii | ||
ACKNOWLEDGEMENTS | xv | ||
Chapter 1 INTRODUCTION: A CRITICAL LOOK AT TWO DECADES OF MARKET REFORM IN INDIA | 1 | ||
Introduction | 1 | ||
Theoretical Framework | 4 | ||
Rise of Structural Adjustment Lending and New World Order | 7 | ||
Structural Adjustment Policy, Globalization and the Indian Economy | 9 | ||
Fiscal Deficit and Policy of Stabilization | 12 | ||
Chapter Outlines | 13 | ||
Conclusion | 21 | ||
Notes | 23 | ||
References | 24 | ||
Chapter 2 DEVELOPMENT PLANNING AND THE INTERVENTIONIST STATE VERSUS LIBERALIZATION AND THE NEOLIBERAL STATE: INDIA, 1989–1996 | 27 | ||
The General Assault on Development Planning and the State as an Agent of Economic Change: Neoliberalism, the IMF and the World Bank | 27 | ||
Liberalization in India, its Antecedents, and ‘Encouragement’ by the Bank and the Fund | 28 | ||
Crisis, Foreign Pressure, and India’s Neoliberals Both Past and Present | 30 | ||
Towards a Corrective of the Neoliberal Representation of the Pre-1991 Record | 34 | ||
Some Observations on Neoliberal Anti-statism and the Nature of the Interventionist State | 42 | ||
Notes | 44 | ||
References | 48 | ||
Chapter 3 PREDATORY GROWTH | 55 | ||
Lived Experiences | 55 | ||
Unequal Growth | 56 | ||
Jobless Growth | 57 | ||
Augmented Profit and Misery | 57 | ||
Income Elasticities of Demand | 59 | ||
Anti-poor | 60 | ||
Heightened Misery for the Poor | 60 | ||
No Place for the Poorest | 61 | ||
Note | 62 | ||
References | 62 | ||
Chapter 4 ON SOME CURRENTLY FASHIONABLE PROPOSITIONS IN PUBLIC FINANCE | 65 | ||
Notes | 74 | ||
References | 75 | ||
Chapter 5 THE COSTS OF ‘COUPLING’: THE GLOBAL CRISIS AND THE INDIAN ECONOMY | 77 | ||
Introduction | 77 | ||
The Export Slowdown | 79 | ||
Capital Inflows and the Financial Sector | 82 | ||
The Crisis and Credit-Financed Demand | 85 | ||
The Indian Government’s Response | 88 | ||
Notes | 91 | ||
References | 91 | ||
Chapter 6 THEORIZING FOOD SECURITY AND POVERTY IN THE ERA OF ECONOMIC REFORMS | 93 | ||
Introduction | 93 | ||
What Deflationary Policies and Trade Liberalization Have Meant for the Rural Economy in India | 94 | ||
More Trade Leads to More Hunger in Developing Countries under Global and Local Deflationary Conditions | 98 | ||
Large Decline in Foodgrains Absorption per Head Is Owing to Falling Purchasing Power, Not ‘Voluntary Choice’ | 102 | ||
Alternative Measures of Head-Count Poverty: Or, How to Count the Poor Correctly versus Illogical Official Procedures | 107 | ||
Concluding Remarks | 118 | ||
Notes | 121 | ||
References | 122 | ||
Chapter 7 GLOBALIZATION, THE MIDDLE CLASS AND THE TRANSFORMATION OF THE INDIAN STATE IN THE NEW ECONOMY | 125 | ||
Introduction | 125 | ||
Embourgeoisment and State Transformation | 127 | ||
The Middle Class, IT Workers and the Neoliberal Turn | 130 | ||
Growth of the Indian software industry | 131 | ||
New economy labour and state transformation | 131 | ||
Implications of a transnationalized new economy workforce | 135 | ||
Conclusion | 136 | ||
Notes | 138 | ||
References | 138 | ||
Chapter 8 THE WORLD TRADE ORGANIZATION AND ITS IMPACT ON INDIA | 143 | ||
GATT to WTO: High Expectations from the Organization | 143 | ||
Unfulfilled Promises and New Challenges | 144 | ||
The WTO and India | 145 | ||
WTO and Policy Space Available to Developing Countries | 151 | ||
Are There Alternatives? | 154 | ||
Notes | 155 | ||
References | 156 | ||
Chapter 9 THE CHANGING EMPLOYMENT SCENARIO DURING MARKET REFORM AND THE FEMINIZATION OF DISTRESS IN INDIA | 159 | ||
Introduction | 159 | ||
General Trend | 160 | ||
Employment and Gender Divide | 162 | ||
Gender inequality: Participation | 162 | ||
Gender inequality: Activity status | 166 | ||
Gender inequality: Feminized casualization | 169 | ||
Gender inequality: Feminization of non-diversification | 171 | ||
Conclusion | 172 | ||
Notes | 174 | ||
References | 174 | ||
Chapter 10 PRIVATIZATION AND DEREGULATION | 177 | ||
Privatization | 178 | ||
Import Competition? | 180 | ||
‘Physician, Heal Thyself!’ | 182 | ||
Will Deregulation Eliminate Corruption? | 183 | ||
Capitalism Stinks! | 184 | ||
Conclusion | 185 | ||
References | 185 | ||
Chapter 11 MACROECONOMIC IMPACT OF PUBLIC SECTOR ENTERPRISES: SOME FURTHER EVIDENCE | 187 | ||
I | 189 | ||
Overall deficits of PSE | 189 | ||
‘Budgetary burden’ of PSEs | 192 | ||
Self-financing ratio | 192 | ||
Trends in capacity utilization in PSEs | 193 | ||
II | 194 | ||
Notes | 194 | ||
References | 196 | ||
Chapter 12 LIBERALIZATION, DEMAND AND INDIAN INDUSTRIALIZATION | 197 | ||
Introduction | 197 | ||
Industrial Development since 1991: An Assessment | 198 | ||
Liberalization and the Problem of Industrial Demand | 202 | ||
Conclusion | 209 | ||
Notes | 210 | ||
References | 210 | ||
Chapter 13 ON FISCAL DEFICIT, INTEREST RATE AND CROWDING-OUT | 213 | ||
Introduction | 213 | ||
Theoretical Overview | 214 | ||
Empirical Evidence: India | 225 | ||
Empirical Evidence: World | 231 | ||
Conclusion | 241 | ||
References | 241 | ||
Data Sources | 242 | ||
Chapter 14 GOING, GOING, BUT NOT YET QUITE GONE: THE POLITICAL ECONOMY OF THE INDIAN INTERMEDIATE CLASSES DURING THE ERA OF LIBERALIZATION | 243 | ||
Introduction | 243 | ||
What are the Intermediate Regime and the Intermediate Classes? | 244 | ||
Preconditions for an ‘intermediate regime’ | 244 | ||
The intermediate regime, intermediate classes and liberalization | 245 | ||
Liberalization and Politics: The Orthodox Theory | 245 | ||
Big and Small-Scale Capital | 246 | ||
Small-sector promotional policies | 247 | ||
No evidence production was a function of reservation | 248 | ||
The small-scale sector and liberalization | 248 | ||
An Explanation for the Success of the Intermediate Business Classes | 249 | ||
Can exploit liberalization | 250 | ||
Subcontracting | 250 | ||
Exploitation and profitability in the small-scale sector | 250 | ||
The Intermediate Regime and Alternative Class Alliances | 253 | ||
Liberalization and the BJP | 253 | ||
The rise of the middle classes | 253 | ||
Problems with this model/perspective | 254 | ||
Conclusion: The Intermediate Classes in the 1990s: Decentralization and Accumulation | 254 | ||
Notes | 256 | ||
References | 256 | ||
CONTRIBUTORS | 260 |