November 8, 2010

Global economic powerhouse Poverty Outsourcing Bollywood Corruption Nuclear power

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I. What was the nature of India’s ‘elephant’ phase?

II. What is the nature of India’s ‘tiger’ phase?

III. How did this transformation come about?

IV. What kind of ‘development’ would we call this?

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1950-80 Low economic

growth Big state and state

interventionism State protectionism No corporate

growth, low corporate profitability

No global role

1980-present ‘Miracle’ rates of

growth (9-7%) Less state High corporate

growth & profitability Spectacular global

role Foreign exchange

reserves at 279 billion USD

Foreign companies4

The top 40’s worth is 243 billion, up from 229 billion a year ago, but still shy of the 351 billion record in 2007.

4 richest Indians are worth a combined $86 billion, (down from 180 billion 3 years ago).

(forbes)

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47 Indian companies are on Forbes Global 2000.

Of the top 50 economic entities in the country, 30 are companies (by sales)

The sales of Tata Steels is about the size of Kerala, and Reliance sales is about $2 billion larger than Kerala

WIPRO is about 5 times the SDP of Manipur, and INFOSYS about 4 times

Sales of Reliance and Tata Steel are each equal to the GDPs of the poorest 12 states

The aggregate sales of the top 50 corporations amount to $8 trillion - double the GDP of China and 8 times the GDP of India.

Wal-Mart’s revenues were about 5 times the GDP of Bangladesh; Vodafone is bigger than Ecuador; Exxon was almost 14 times Kenya etc.

The aggregate sales of the top 3 companies, Royal Dutch Shell, Exxon Mobil and Wal-Mart exceed the GDP of the entire African continent ($1.289 trillion and $1.281 trillion for 2008 respectively)

The combined sales of the Forbes Global 2000 of $29.78 trillion equal the GDP of the 5 richest countries: US, Japan, China, Germany, and France. It equals the GDP of all 179 countries taken together minus the richest 5.

Under $1 a day: 34.3% Under $2 a day: 80.4% Under national poverty line:

37.2% (debated figure) Ranks 67 out of 88 on the Hunger

Index; worse than Nepal, Pakistan, China, Sudan

Farmer suicides – close to 200,000 suicides between 1997-2005 (one suicide every 30 minutes)

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Why this miracle? “freedom” from the

state Less regulation High consumption Globalization: free

trade, more foreign investments, more active stock market

Why such inequality? Still a lot of

regulation High dependence on

agriculture Not enough skills Bad governance “People are not able

to take advantage of globalization”

Alternative explanations

State-business collaboration Cheap inputs provided by the

state for development of business Nationalized banking gave control

over the savings of the common person to the government which could then be channeled to big business

Protectionist: similar to ISI model11

General feature: high corporate profits but low output, low growth

large oligopolies No domestic competition No global competition

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Rajiv Gandhi, the PM, and a number of other politicians and business leader see opportunity

Division within Indian business re:globalization

Globalizers win, lots of profit to be made

Foreign companies eye large domestic market

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Deepening fiscal crisis Acute foreign exchange crisis In 1991 in takes a loan from

the IMF Beginning of the process of

structural adjustment and neoliberal reforms

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Easing entry of foreign corporations Easing labour and environmental

regulations (especially in export processing zones)

Less state regulation More competition Privatization of public sector companies

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Drivers of the ‘miracle’: Outsourcing and growth of service

sector Sell-offs of Indian companies Low cost production Lay offs and restructuring Growth of the middle class with

phenomenal growth in salaries

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Spectacular growth of the ‘informal sector’

Inequality across caste, gender and religion

Issues such as female infanticide

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Agrarian Crisis(photos by P.Sainath, the foremost journalist in

India who reports on these suicides)

http://www.mapsofindia.com/maps/maharashtra/maharashtra.htm

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One author has called them neoliberal deaths

Neoliberalization of agriculture to increase productivity and growth

Withdrawal of state support and public investment

Private debt High-yielding seeds, chemical inputs,

pesticides Input cost rose 500-1000% Cycle of debt and distress

Modernization: growth, efficiency, productivity

Capability: education, health, income

Social power: justice, difference, agency

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70% survive on agrarian incomes

93% work in the informal sector 80% live in under $2 a day 42 million live in slums 2 million are homeless 90 million are marginal workers

The state? Educational institutions?

Political sphere?

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There are several social groups in India which have been historically disadvantaged

Scheduled Castes (SC) 16.8% Known as ‘untouchables’ before Scheduled Tribes (ST) 8% Other Backward Classes 27% (or more) Even with conservative estimates, more than

50% of India’s population suffers systematic disadvantage and depravation

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The literacy rate among Muslims is substantially below the national average (59% as opposed to 65%). Only 3.4 per cent of the Muslim population obtains graduate degrees

In the elite government jobs, Muslim representation is no more than 4%

31 % of Muslims below the poverty line (SC/ST categories 36.4%).

40.7 per cent of Muslims fall in the Other Backward Classes (OBCs) category.

Table 2.15: Comparative indices, India, 2004-5 proportion of

total population (%)

Literacya

(%) Graduate and aboveb

(%)

Employed in Central Public Sector Undertakings (%)

Incidence of Poverty (%)

Low Income (All India) (%)

Middle Income (All India) (%)

High Income (All India) (%)

Hindu General Population 25.9 80.5 15.3 8.9 73.9 17.2

Hindu SCs/STs 31.2 52.7 2.2 28.6 65.1 6.3

Hindu OBC 43 65.7 3.2 8.3 27 25.9 72.6 1.5

Muslim General Population 59.3 66 2.4 2.7 35 29.3 66.2 4.4

Muslim OBCs 40.7 61.9 1.9 0.6 38 32.7 63.5 3.8

All Other minorities 6.1 75.2 8.9 13.2 68.6 18.2

Total 67.3 28 22.9 69.8 7.3

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Gender inequality index: 72 Sex ratio 933-1000 Female foeticide: some 50 million girls

are missing Discriminated in labour market – not by

blocking access, but by using them in particular jobs, insecure, informal, without collective bargaining

Education, wages less than men Political representation: 0.1% in the

parliament

Who is the agent of this change?

Who designed it and implemented it?

What would it have looked like if others designed it?