Content area
Full Text
This paper argues that internal contradictions arising from the inability of the post- Independence Indian state to introduce the institutional changes and adopt the interventions needed for successful import-substituting industrialisation, had resulted in a crisis in that growth strategy by the mid-1960s. Yet the transition to neoliberalism occurred only after a decade-and a half, and in accelerated fashion only after two decades. The paper would trace this lag to the timing of changes in the international financial system that was a prerequisite for liberalization. It would argue that once the transition occurred and gained momentum India emerged as a successful instance of neoliberal growth because of the foundations created in the import substituting years, her fortuitous ability to avoid severe balance of payments and financial crises, and the human face which governments were forced to adopt given the compulsions of democracy in a populous country with significant poverty.
Keywords: Neoliberalism, India, Industrial Growth, Finance Capital, Planning
Over the last two decades or more, the developing world has shifted out of development strategies involving a highly interventionist and often developmentalist state to one that has been widely characterised as a neoliberal strategy. Neoliberalism is of course an ambiguous and loosely defined term, even when restricted to the economic sphere. So it would be useful to clarify the sense in which it is being used in this context. In what follows, neoliberal theory and practice are taken as referring to: (i) the use of the rhetoric of market fundamentalism, in which the market or ostensibly "free economic exchange" is presented as the most efficient mechanism to work the economic system, to pave the way for the increasingly unfettered functioning of private capital, both domestic and foreign; (ii) the use of the notion of a minimalist state, to be realised by dismantling its developmentalist version, to legitimise the shift of various terms of trade and mechanisms of distribution in favour of the owners of capital and their functionaries and conceal the conversion of segments of the state apparatus into sites for primitive accumulation; and (iii) the pursuit of a regime of accumulation where the home market and deficit-financed state expenditure are replaced by exports and debt-financed private expenditure as the principal stimuli to growth.1
Despite a degree...