Some aspects of the current Indian

economy, society and polity

Venkatesh Athreya
Adjunct Professor
Asian College of Journalism
 Economy
• A modernizing economy, with agriculture growing
poorly, industry modestly and services somewhat
faster

• High and increasing degree of inequality in ownership

and distribution of assets and incomes

• Neoliberal policies of deregulation, privatization and

globalization for over twenty-five years have failed to
reduce significantly the levels of poverty and
deprivation even while the rate of growth of GDP has
been averaging 6 % per annum since 1980
 Economy
Neoliberal policies have meant:
• Tax and other concessions to large Indian and
foreign capital to attract investment
• Freeing corporate players from all norms of social
accountability
• Expanding the space for profit-seeking by
privatizing arenas considered historically to be the
State’s responsibility, such as education, health
and infrastructure
• Opening up the economy to largely unregulated
inflows and outflows of capital as finance
 Economy
Neoliberal policies have meant:
• Tax and other concessions to large Indian and
foreign capital to attract investment
• Freeing corporate players from all norms of social
accountability
• Expanding the space for profit-seeking by
privatizing arenas considered historically to be the
State’s responsibility, such as education, health
and infrastructure
• Opening up the economy to largely unregulated
inflows and outflows of capital as finance
 Economy
• The rate of growth of GDP during the period of neoliberal reforms has
been about the same or marginally higher than that during the
1980s, the decade preceding reforms
• While the tertiary sector (especially finance, real estate ,
telecommunications, IT and tourism) has grown rapidly, industry has
grown modestly and agriculture has grown very slowly
• Neoliberal policies have made the Indian economy more vulnerable
to external shocks. The sum of imports and exports of goods and
services was hardly 14% of GDP in 1991, but is now more than half
the GDP.
• Employment growth has been slower over the last two decades as
compared to the 1980s. Most of the growth in employment has been
of an informal character, with 93 % of those employed (both wage-
employed and self-employed) not legally entitled to social protection
and welfare benefits. The three years since 2014 have seen a
collapse of employment.
 Economy
• Agriculture and food grain production have stagnated or grown very
slowly. Food security has emerged as a major concern.
• More than three lakh farmers have committed suicide between 1997
and 2016
• The incentives offered to the corporate sector and to foreign capital
have led to serious concerns about the future of Indian agriculture.
• Corporatization of agriculture is being encouraged and land reforms
are being reversed. Land distribution has become more unequal
• Import liberalization and opening up of the economy to foreign
portfolio capital has led to a highly vulnerable balance of payments
situation in the context of the global economic slowdown.
• Huge tax concessions to corporates have eroded government
finances while subsidy reductions have weakened domestic demand.
India’s weak economy and rising interest rates in the USA make a
huge flight of foreign finance capital a very real prospect.
 Society
• Caste and gender inequality and oppression continue.
Women, dalits and tribals as well as other democratic forces are
resisting this inequality and oppression

• Consumerist culture is being promoted by neoliberal policies

and the corporate media.

• The rise of obscurantism, sometimes actively endorsed by the

politically powerful, is a matter of concern.

• Violence against workers, women, dalits and tribals are being

unleashed across the country, but resistance to this is also
growing
 Polity
• Two key problems of the polity are the rise of communalism and
the huge incidence of corruption at the highest levels
• The enormous rise in corruption has been a particular feature of
the neoliberal period . It involves the corporate-bureaucrat-
politician nexus as India’s natural resources and markets are
being thrown open to large foreign and domestic corporate
players.
• Majority communalism has become a strong political force
threatening India’s diversity and its plural and secular character.
• The communal and anti-dalit political trends have spawned
insecurity among the religious minorities and dalits.
• The third and important aspect of the polity is the weakening of
democratic institutions under neoliberalism
 Conclusion
• Since independence, India has made significant progress in terms of
both overall economic development and human development.
• However, a large section of the population continues to face
deprivation along several dimensions.
• India faces challenges on all fronts – economy, society and polity
• The country needs alternative policies that:
– Promote pro-poor, sustainable development based on redistribution of assets
– Strengthen the domestic market
– Promote greater public investment in health, education and infrastructure to
be financed by raising tax revenues from the rich
– Reverse import liberalization and bring in capital controls
– Ensure a more carefully regulated economy
– Democratize the polity by attacking the role of money power at all levels,
especially in elections
– Strengthen federalism and local government institutions
– Preserve the secular and democratic values enshrined in the Constitution