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India’s Political EconomyIndia’s Political Economy
An introductionAn introduction
OutlineOutline
A Long-Term ViewA Long-Term View 2004 Elections. What do they mean?2004 Elections. What do they mean? Globalization and NationalismGlobalization and Nationalism Trends and QuestionsTrends and Questions Regions, Cities, and BusinessRegions, Cities, and Business Q & AQ & A
India has been integrated into the India has been integrated into the world economy since the 14world economy since the 14thth
centurycentury
Its world economy became global Its world economy became global after 1500after 1500
Specific routes and points of contact Specific routes and points of contact became critical by 1800: especially the became critical by 1800: especially the
coasts and northwest interiorcoasts and northwest interior
In the 1800s, The British Empire produced a In the 1800s, The British Empire produced a new territorial domain for the evolution of new territorial domain for the evolution of
modern state powermodern state power
A transition to a modern development regime consumed the decades 1840-1880.
In 1853, Governor General Dalhousie announced a plan to build an Indian railway with state contracts that guaranteed English companies a minimum five percent return; and to secure that return, government kept control of railway construction and management.
In 1871, the Government of India obtained authority to raise loans for productive purposes, and large irrigation projects began, following earlier success raising revenues from smaller projects. Development projects were all government endeavours that employed many native contractors and their benefits also filtered down to native owners of land receiving new irrigation and producing commodity crops.
Between 1880 and 1914, industrial development in India took off during decades of low prices in Europe and America when rising prices in South Asia encouraged investments in India by firms producing for Indian markets and for diversified world markets.
Commodity prices in India rose with export commodity production until 1929. Imported industrial machinery was domesticated in new Indian factory towns.
In 1853, the first Indian cotton mill appeared in Bombay, and the Factory Act (1881) imposed rules on Indian factories to reduce their comparative advantage in virtue of low labour costs and cheap access to raw materials in India.
In 1887, J.N.Tata's Empress Mill arose at Nagpur, in the heart of cotton country, in 1887.
The Tatas became India's industrial dynasty. Tata Iron and Steel Works at Jamshedpur consumed increasing supplies of ore and coal, which by the 1920s rivalled exports from Calcutta.
In 1914, India was the world's fourth largest industrial cotton textile producer: cotton mills numbered 271 and employed 260,000 people, 42% in Bombay city, 26% elsewhere in Bombay Presidency (mostly Nagpur), and 32% elsewhere in British India, at major railway junctures.
Coal, iron, steel, jute and other industries were developed at the same time, producing specialized regional concentrations of heavy industrial production around Bombay, Ahmedabad, Nagpur, Kanpur, Calcutta, Jamshedpur, and Madras.
Growth rate of India's real GDP per capita Growth rate of India's real GDP per capita (Constant Prices: Chain series) (1857–1900(Constant Prices: Chain series) (1857–1900).).
Data Source: Penn World tables. Data Source: Penn World tables. http://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Economy_of_India
Percapita incomes per Capita Relative to IndiaPercapita incomes per Capita Relative to India
Gregory Clark,“The Great Divergence – World Economic Growth since 1800.” Gregory Clark,“The Great Divergence – World Economic Growth since 1800.” http://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Global%20History-12.pdfhttp://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Global%20History-12.pdf
Indian GDP per Capita relative to Britain and the USA, Indian GDP per Capita relative to Britain and the USA,
1873 to 19981873 to 1998
Gregory Clark,“The Great Divergence – World Economic Growth since 1800.” Gregory Clark,“The Great Divergence – World Economic Growth since 1800.” http://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Global%20History-12.pdfhttp://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Global%20History-12.pdf
Historical Share of Global GDPHistorical Share of Global GDP
www.deloitte.com/dtt/research/0,1015,sid%253D...
Growth rate of India's real GDP per capita Growth rate of India's real GDP per capita
(Constant Prices: Chain series) (1950–2006)(Constant Prices: Chain series) (1950–2006)
Data Source: Penn World tables. Data Source: Penn World tables. http://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/Economy_of_India
http://www.lib.utexas.edu/maps/world_maps/world_mktsize96.jpg
Relative GDP map of the worldRelative GDP map of the world
Per capitaPer capita GDP of South Asian economies & GDP of South Asian economies &
SKorea (1950-1995)SKorea (1950-1995)
http://en.wikipedia.org/wiki/Economy_of_India
http://www.mastercard-masterindex.com/asiapac/insights/1Q2006/images/chart_issue01_01.gif
Value of Indian rupee as per dollar & pound Value of Indian rupee as per dollar & pound (1980-2005)(1980-2005)
http://en.wikipedia.org/wiki/Economy_of_India
www.indianembassylao.com/economy_basic.html
Private and public industry employment in India Private and public industry employment in India
(2003).(2003).
http://en.wikipedia.org/wiki/Economy_of_India
Composition of India’s agricultural output 2003-04Composition of India’s agricultural output 2003-04
http://en.wikipedia.org/wiki/Economy_of_India
www.321gold.com/.../dorsch062006.html
Per capita Net Per capita Net State Domestic State Domestic Product in India Product in India
(1997-98).(1997-98).
•http://en.wikipedia.org/wiki/Economy_of_India
http://news.bbc.co.uk/nol/shared/spl/hi/guides/456900/456964/img/1148297950.gif
http://www.oecd.org/dataoecd/62/30/1877912.gif
Partitioned into India and Pakistan in 1947. Partitioned into India and Pakistan in 1947. East Pakistan became Bangladesh in 1971East Pakistan became Bangladesh in 1971
Three decades from the start of India's first Five Year Plan in 1952 to the end of its Sixth Plan in 1985 were the heyday of nationally planned development in South Asia. National planning required the institutional enclosure of national economies. South Asia's national plans focused on national markets. National planners formulated priorities for allocating state resources acquired both internally and externally. Planning agencies organized regional and local initiatives like cooperative societies and community development programs. National governments set up public food procurement and distribution systems to establish a ceiling on food costs for the poor. National health and education expanded. State ownership expanded to basic industries, public utilities, banks, and insurance.
Countries >20 million population <$1,000 percapita GDP(UNICEF data 1994)
China
India
Nigeria
Egypt
Ethiopia
Myanmar
Zaire
Tanzania
Sudan
Kenya
Korea, DPR
Uzbekistan
Nepal
Uganda
Other
PhilippinesViet NamBangladeshPakistanIndonesia
India is the largest and richest country in the region India is the largest and richest country in the region spanning all of southern Asia … the second largest national spanning all of southern Asia … the second largest national
economy in Asia, after China, with comparably rapid PC economy in Asia, after China, with comparably rapid PC growth rates today, and rather higher poverty measures …growth rates today, and rather higher poverty measures …
Since the opening of the Indian economy and liberalization of internal market
structures since 1990, economic development has had no one guiding vision or dominant logic and several contradictory trends are prominent. National economies
are more global as are the cultural communications that shape national
politics.
Since 1990, the national economy has grown more rapidly, Since 1990, the national economy has grown more rapidly, and economic disparities have increased …and economic disparities have increased …
In Bombay, India's Wealth and In Bombay, India's Wealth and Poverty on DisplayPoverty on Display
ListenListen Morning EditionMorning Edition, , February 17, 2004 · February 17, 2004 ·
India's economy is booming, but the new India's economy is booming, but the new wealth is not shared by all. Some 400 wealth is not shared by all. Some 400 million Indians still live on less than a million Indians still live on less than a dollar a day. This disparity in wealth is dollar a day. This disparity in wealth is starkly evident in Bombay, which doubles starkly evident in Bombay, which doubles as the commercial capital of India and the as the commercial capital of India and the home of the largest slum in Asia. Miranda home of the largest slum in Asia. Miranda Kennedy reports.Kennedy reports.
Sunil Mittal 186
Sunil Mehta is Forbes’ #186 among richest men in the world
46 , self made Source: telecom
Net Worth: $2.7 bil
Country of citizenship: IndiaResidence: Delhi, India Industry: TechnologyMarital Status: married , 3 children Punjab University, Bachelor of Arts / Science
From making bicycle parts in Ludhiana, a trading town in North India, Mittal is now India's leading telecom pioneer and the first private operator to launch cellular services in the country. His $1.1 billion (revenues) Bharti group runs country's largest GSM-based mobile phone service. Mittal has his hands full battling arch rivals, the Ambanis of Reliance and the Tata group. Biggest asset is family's stakein flagship Bharti Tele-Ventures, in which Singapore Telecom and Warburg Pincus have jointly invested nearly $1 billion. The stock, first listed two years ago, soared 376% last year, propelling Mittal into the billionaire ranks. A believer in lucky charms, Mittal travels in his ten-year-old Mercedes to important business meetings.
In the 1990s, television media owned by multinational corporations flooded public information systems. The
growth of exports from South Asian countries measured 13.5% annually in the 1990s, almost four times the rate of
the 1970s. Foreign direct investment (FDI) grew, though it remains a small proportion of India's GDP at 0.1 percent
before 1991 and 0.5 percent in 1992-6. In 1990-1996, FDI increased (in millions of US dollars) from under 100 to over 5,000 in India, from under 250 to over 650 in Pakistan, from
under 60 to over 600 in Bangladesh, and from under 60 to over 2,400 in Sri Lanka. In the first six months of 1996
alone, Korean companies made nine technical and twenty-five financial agreements in India.
Forging alliances between national and international business now preoccupies
national policy makers.
Linkages between FDI and national investors are increasing
the pool of investment capital inside the national economy.
In 1999, the Bharatiya Janata Party (BJP) became the leading party in a National Democratic Alliance (NDA) coalition government that held power until May 2004. By leading India’s first major non-Congress national government, Prime Minister Vajpayee and colleagues opened a new political era. The BJP was in fact a new kind of dominant party as a pivot of national coalition building. Its Sangh brethren the Rashtriya Swayamsevak Sangh (RSS) and Vishwa Hindu Parishad (VHP) also moved from margins to mainstream by occupying the Prime Minister’s office and all national ministries. Hindutva acquired official respectability as a national party ideology.
In 2004, the incumbent NDA alliance government launched In 2004, the incumbent NDA alliance government launched a campaign called “India Shining” to highlight its success in a campaign called “India Shining” to highlight its success in
stimulating economic growth – it failedstimulating economic growth – it failed
BBC REPORT --- 28 May 2004 BBC REPORT --- 28 May 2004 BJP admits 'India Shining' error BJP admits 'India Shining' error India's Bharatiya Janata Party has admitted its "India India's Bharatiya Janata Party has admitted its "India
Shining" approach was harmful in its recent Shining" approach was harmful in its recent unsuccessful election campaign. unsuccessful election campaign.
Speaking for the first time since the BJP was ousted, former Speaking for the first time since the BJP was ousted, former deputy premier LK Advani said the catchphrase was "not deputy premier LK Advani said the catchphrase was "not wrong... but not appropriate". wrong... but not appropriate".
Congress became the biggest party in parliament after a Congress became the biggest party in parliament after a campaign pledging to improve the plight of India's poor. campaign pledging to improve the plight of India's poor.
However, Mr Advani warned the result had not given However, Mr Advani warned the result had not given Congress a clear mandate. Congress a clear mandate.
Bouncing back Bouncing back Mr Advani said the two catchphrases "Feel Good" and "India Mr Advani said the two catchphrases "Feel Good" and "India
Shining" had hurt the BJP. Shining" had hurt the BJP.
2004 elections established a Congress-led United Progressive Alliance (UPA) government in New Delhi.
In aggregate national voting statistics, BJP and Congress are evenly matched. Both depend on allies to
win. In 2004 Lok Sabha polls, each alliance received about 35% of the total vote, and total votes for NDA
and UDA parties declined compared to 1999 (by 3.62% and 2.36%, respectively), while non-aligned parties increased their vote share, most notably the Bahujan
Samaj Party (BSP) in UP. The 2004 change in national government came not from a voter shift away from the BJP but from a few key Congress victories and many
good Congress alliances with victorious regional parties, which together with “outside support” gave the UDA over 320 Lok Sabha votes, more than the NDA
ever had, and drove the NDA into Lok Sabha minorities in all but five Indian states.
What do elections mean?What do elections mean? National governments comprise National governments comprise
alliances among regional partiesalliances among regional parties NDA gave way to UDA on the basis of NDA gave way to UDA on the basis of
a small voter swing toward Congress a small voter swing toward Congress allied parties in several key states, allied parties in several key states, including Andhra Pradeshincluding Andhra Pradesh
Economic issues were criticalEconomic issues were critical Economic policy is at issue, in the Economic policy is at issue, in the
states and at the Centre (New Delhi)states and at the Centre (New Delhi)
Economic disparities translated into Economic disparities translated into votes for government efforts to votes for government efforts to
spread the wealthspread the wealth
New Government headed by New Government headed by growth oriented economistsgrowth oriented economists
Finance Minister P Finance Minister P Chidambaram Chidambaram
Prime Minister Prime Minister Manmohan Singh, Manmohan Singh, who launched who launched liberalization in liberalization in 1990s1990s
The UDA government, like its NDA predecessor, depends on decisions The UDA government, like its NDA predecessor, depends on decisions by voters and politicians who respond to short-term assessments of by voters and politicians who respond to short-term assessments of practical self-interest. Experts attribute say effective promises of good practical self-interest. Experts attribute say effective promises of good
government are more politically important than ideology.government are more politically important than ideology. Confident Manmohan Singh focuses on governance:Confident Manmohan Singh focuses on governance:
[India News]: New Delhi, Nov 2 : Over five months into office, Prime [India News]: New Delhi, Nov 2 : Over five months into office, Prime Minister Manmohan Singh's first meeting with his ministers reflected his Minister Manmohan Singh's first meeting with his ministers reflected his quite confidence over the stability of his government and the importance quite confidence over the stability of his government and the importance he attaches to good governance, analysts and ministers said Tuesday. he attaches to good governance, analysts and ministers said Tuesday. They said the meeting also showed that the prime minister, catapulted to They said the meeting also showed that the prime minister, catapulted to the office after Congress president Sonia Gandhi declined to take up the the office after Congress president Sonia Gandhi declined to take up the prized job, has quickly learnt the art of managing a coalition government. prized job, has quickly learnt the art of managing a coalition government. "He has settled in quite a bit and is clearly putting his own stamp on the "He has settled in quite a bit and is clearly putting his own stamp on the administration," said Mridula Mukherjee, a professor of political science at administration," said Mridula Mukherjee, a professor of political science at the Jawaharlal Nehru University here. the Jawaharlal Nehru University here. "He now wants the ministers to focus on implementing the promises, to "He now wants the ministers to focus on implementing the promises, to deliver," Mukherjee told IANS. deliver," Mukherjee told IANS.
The affluent urban classes, epitomized by The affluent urban classes, epitomized by stylish folks in Bombay (Mumbai) … prosper stylish folks in Bombay (Mumbai) … prosper
in the world of globalizationin the world of globalization
Middle class desires drive much of Middle class desires drive much of urban economyurban economy
Tourism and heritage biz … nation Tourism and heritage biz … nation in the worldin the world
High class hotels … where national High class hotels … where national and global elites meetand global elites meet
Everyday capitalismEveryday capitalism
Southern India:
Hyderabad is Cyberabad
Although Bangalore was first out of the hi-tech gate, many Indian cities have now joined the race for information-technology jobs. Hyderabad's one of them, and the results are incredible to anyone who remembers the city 20 years ago.
Peoples' War Group (PWG) Since 1980 clashes between police and Naxalite Maoist revolutionaries of the Peoples' War Group (PWG) have taken place in northwestern Andhra Pradesh.
The PWG champions the cause of the landless and targets landlords, law enforcement personnel and other symbols of authority in the northeast, east
central and southern states of Andhra Pradesh, Bihar, Madhya Pradesh, Maharashtra and Orissa.
Naxalite Maoist revolutionaries of the Peoples' War Group have killed dozens of persons, declaring them "class enemies" or police informers. In June 1998,
Naxalites attacked a tribal village in Andhra Pradesh's east Godavari district, where they killed the village chief and beat eight women and shot two men. On 22 February 1998, an Orissa policeman was killed by suspected PWG militants, who had entered the state from neighboring Andhra Pradesh. In areas under their control, Naxalites dispense summary justice in "People's Courts", which in some cases condemn to death suspected police informers, village headmen, and others
deemed to be "class enemies" or "caste oppressors." Madhya Pradesh state transport minister Likhiram Kware was hacked to death on 16 December 1999. The Naxalites also extort money from businesses. Their victims, in addition to
police and local government officials, include suspected police informers, village headmen, and landlords whom they accuse of oppressing scheduled caste
members. The PWG also used land mines to kill police, and insurgents used bombs to kill government officials, police, and civilians.
Manmohan Singh is expected to announce compensationIndian Prime Minister Manmohan Singh has promised assistance to families of farmers who have committed suicide in southern India.
Mr Singh is visiting Andhra Pradesh, where nearly 3000 farmers have taken their lives because of crippling debt.
The prime minister's visit is his first since taking office in May.
It comes a week before his newly elected Congress government presents its first federal budget, which is expected to be pro-farmer.
Correspondents say Mr Singh's visit is aimed at showing his government's commitment to poor Indian farmers, who had felt largely excluded from the economic reforms of the previous government.
India PM pledge over suicide farmers
Gujarat killings, Feb-Apr 2002Gujarat killings, Feb-Apr 2002
Gujarat ViolenceGujarat Violence And unemploymentAnd unemployment Human rights reportHuman rights report And investment and FDIAnd investment and FDI And Gujarat BJP Government under And Gujarat BJP Government under
Narendra ModiNarendra Modi And justiceAnd justice
Breman, Jan, Arvind Das, and Ravi Agarwal Down and Out: Labouring Under Global Capitalism. Distributed for the Amsterdam University Press. 164 p., richly illustrated. 11 x 8-3/4 2000Cloth CUSA $11.50spec 9-05356-450-0
Poverty is the dominant feature of the working lives portrayed in this book. But the misery of these men, women, and children in India has little to do with the underdevelopment of the past. The poverty here is caused by development and is concentrated mainly in what is referred to as the informal sector of the economy, which is what four-fifths of India's population depends on for its livelihood. It concerns the type of work that requires little or no capital investment or education and is small-scale by nature. The wages earned from these enterprises are not only low but are also characterized by strong work fluctuations per day, month, or season. Two other factors characterize this type of work: the absence of governmental monitoring and also, the absence of organizations, namely unions, which traditionally represented the concerns of the working class.
The choice for India emerges from the research of Jan Breman, performed over a 30-year period in an area located on India's west coast, the site of enormous economic growth. He has now returned to this location with photographer, Ravi Agarwal, to present a portrait of the working classes of this particular area. Together with Arvind Das, a well-known journalist and commentator on business matters in India, Jan Breman has written the text which accompanies the photographs.
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Delhi, Hyderabad (Cyberabad), and Delhi, Hyderabad (Cyberabad), and Mumbai are hotspots for business Mumbai are hotspots for business
opportunities in Indiaopportunities in India
The Delhi Metro, which has become synonymous for state-of-the-art technology, may now sport two see-through fibre glass lifts in the ISBT (Kashmere Gate) station. "The underground section, which will be ready in December, will have 11 lifts in all. Out of these, we will have two lifts which will have see-through glass windows", said Delhi Metro Rail Corporation (DMRC) spokesman Anuj Dayal.
