Post on 04-Apr-2018
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India’s Political Economy
An introduction
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Outline
A Long-Term View
2004 Elections. What do they mean? Globalization and Nationalism
Trends and Questions
Regions, Cities, and Business
Q & A
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India has been integrated into theworld economy since the 14th
century
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Its world economy became globalafter 1500
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Specific routes and points of contactbecame critical by 1800: especially the
coasts and northwest interior
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In the 1800s, The British Empire produced anew territorial domain for the evolution of
modern state power
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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 smallerprojects. 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.
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Between 1880 and 1914, industrial development in India took off duringdecades 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 inIndia.
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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 SteelWorks at Jamshedpur consumed increasing supplies of ore andcoal, 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 employed260,000 people, 42% in Bombay city, 26% elsewhere inBombay Presidency (mostly Nagpur), and 32% elsewhere inBritish India, at major railway junctures.
Coal, iron, steel, jute and other industries were developed at thesame time, producing specialized regional concentrations of heavy industrial production around Bombay, Ahmedabad,Nagpur, Kanpur, Calcutta, Jamshedpur, and Madras.
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Growth rate of India's real GDP per capita
(Constant Prices: Chain series) (1857 –1900).
Data Source: Penn World tables.
http://en.wikipedia.org/wiki/Economy_of_India
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Percapita incomes per Capita Relative to India
Gregory Clark,“The Great Divergence – World Economic Growth since 1800.”
http://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Global%20History-12.pdf
I di GDP C it l ti t B it i d th USA
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Indian GDP per Capita relative to Britain and the USA,
1873 to 1998
Gregory Clark,“The Great Divergence – World Economic Growth since 1800.” http://www.econ.ucdavis.edu/faculty/gclark/GlobalHistory/Global%20History-12.pdf
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Historical Share of Global GDP
www.deloitte.com/dtt/research/0,1015,sid%253D...
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Growth rate of India's real GDP per capita
(Constant Prices: Chain series) (1950 –2006)
Data Source: Penn World tables.
http://en.wikipedia.org/wiki/Economy_of_India
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http://www.lib.utexas.edu/maps/world_maps/world_mktsize96.jpg
Relative GDP map of the world
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Per capita GDP of South Asian economies &
SKorea (1950-1995)
http://en.wikipedia.org/wiki/Economy_of_India
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http://www.mastercard-masterindex.com/asiapac/insights/1Q2006/images/chart_issue01_01.gif
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Value of Indian rupee as per dollar & pound
(1980-2005)
http://en.wikipedia.org/wiki/Economy_of_India
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www.indianembassylao.com/economy_basic.html
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Private and public industry employment in India
(2003).
http://en.wikipedia.org/wiki/Economy_of_India
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Composition of India’s agricultural output 2003-04
http://en.wikipedia.org/wiki/Economy_of_India
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www.321gold.com/.../dorsch062006.html
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Per capita Net
State DomesticProduct in India
(1997-98).
•http://en.wikipedia.org/wiki/Economy_of_India
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http://news.bbc.co.uk/nol/shared/spl/hi/guides/456900/456964/img/1148297950.gif
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http://www.oecd.org/dataoecd/62/30/1877912.gif
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Partitioned into India and Pakistan in 1947.East Pakistan became Bangladesh in 1971
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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 SouthAsia. 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 resourcesacquired 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.
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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
U anda
Other
Philippines
Viet NamBangladeshPakistanIndonesia
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India is the largest and richest country in the region
spanning all of southern Asia … the second largest nationaleconomy in Asia, after China, with comparably rapid PC
growth rates today, and rather higher poverty measures …
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Since the opening of the Indian economy
and liberalization of internal marketstructures 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.
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Since 1990, the national economy has grown more rapidly,and economic disparities have increased …
In Bombay, India's Wealth andPoverty on Display
Listen Morning Edition , February 17, 2004 ·
India's economy is booming, but the newwealth is not shared by all. Some 400million Indians still live on less than adollar a day. This disparity in wealth is
starkly evident in Bombay, which doublesas the commercial capital of India and thehome of the largest slum in Asia. MirandaKennedy reports.
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Sunil Mehta is Forbes’ #186 among richest men in the world
46 , self madeSource: telecom
Net Worth: $2.7 bil
Country of citizenship: India Residence: Delhi, IndiaIndustry: Technology Marital Status: married , 3 childrenPunjab University, Bachelor of Arts / Science
From making bicycle parts in Ludhiana, a trading town in North India, Mittal is now India's leadingtelecom pioneer and the first private operator to launch cellular services in the country. His $1.1billion (revenues) Bharti group runs country's largest GSM-based mobile phone service. Mittal hashis hands full battling arch rivals, the Ambanis of Reliance and the Tata group. Biggest asset isfamily's stakein flagship Bharti Tele-Ventures, in which Singapore Telecom and Warburg Pincushave 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 im ortant business meetin s.
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In the 1990s, television media owned by multinational
corporations flooded public information systems. The
growth of exports from South Asian countries measured13.5% 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, FDIincreased (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.
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Forging alliances between
national and international
business now preoccupiesnational policy makers.
Linkages between FDI andnational investors are increasing
the pool of investment capital
inside the national economy.
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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 kindof 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
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In 2004, the incumbent NDA alliance government launcheda campaign called “India Shining” to highlight its success in
stimulating economic growth – it failed
BBC REPORT --- 28 May 2004 BJP admits 'India Shining' error India's Bharatiya Janata Party has admitted its
"India Shining" approach was harmful in its recentunsuccessful election campaign.
Speaking for the first time since the BJP was ousted, formerdeputy premier LK Advani said the catchphrase was "notwrong... but not appropriate".
Congress became the biggest party in parliament after a
campaign pledging to improve the plight of India's poor. However, Mr Advani warned the result had not given
Congress a clear mandate. Bouncing back Mr Advani said the two catchphrases "Feel Good" and "India
Shining" had hurt the BJP.
2004 elections established a Congress-led United
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g
Progressive Alliance (UPA) government in New Delhi.
In aggregate national voting statistics, BJP and
Congress are evenly matched. Both depend on allies towin. 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.
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What do elections mean?
National governments comprisealliances among regional parties
NDA gave way to UDA on the basis
of a small voter swing towardCongress allied parties in several keystates, including Andhra Pradesh
Economic issues were critical Economic policy is at issue, in the
states and at the Centre (New Delhi)
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Economic disparities translated into
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Economic disparities translated intovotes for government efforts to
spread the wealth
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New Government headed bygrowth oriented economists
Finance Minister PChidambaram
Prime MinisterManmohan Singh,who launched
liberalization in1990s
Th UDA t lik it NDA d d d d i i
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The UDA government, like its NDA predecessor, depends on decisionsby voters and politicians who respond to short-term assessments of practical self-interest. Experts attribute say effective promises of good
government are more politically important than ideology. Confident Manmohan Singh focuses on governance:
[India News]: New Delhi, Nov 2 : Over five months into office, PrimeMinister Manmohan Singh's first meeting with his ministers reflected hisquite confidence over the stability of his government and the importancehe attaches to good governance, analysts and ministers said Tuesday.
They said the meeting also showed that the prime minister, catapulted tothe office after Congress president Sonia Gandhi declined to take up theprized 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
administration," said Mridula Mukherjee, a professor of political science atthe Jawaharlal Nehru University here.
"He now wants the ministers to focus on implementing the promises, todeliver," Mukherjee told IANS.
The affluent urban classes epitomized by
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The affluent urban classes, epitomized bystylish folks in Bombay (Mumbai) … prosper
in the world of globalization
f
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Middle class desires drive much of urban economy
B ll d
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Bollywood
U b b ildi b
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Urban building boom …
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Tourism and heritage biz nation
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Tourism and heritage biz … nation
in the world
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Hi h l h t l h ti l
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High class hotels … where national
and global elites meet
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Public arts and expressions …
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Everyday capitalism
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Everyday capitalism
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Everyday needs …
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India gate …
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S th I di
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Southern India:
Hyderabad is Cyberabad
Although Bangalore was first out of the hi-tech gate, manyIndian 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 yearsago.
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Peoples' War Group (PWG)
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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.
Manmo an ng s expecte toannounce
i di i
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compensationIndian PrimeMinister Manmohan Singhhas promised assistanceto families of farmers who
have committed suicide insouthern India.
Mr Singh is visiting AndhraPradesh, where nearly 3000farmers have taken theirlives because of crippling
debt.The prime minister's visit is his
first since taking office inMay.
It comes a week before hisnewly elected Congress
government presents its firstfederal budget, which isexpected to be pro-farmer.
Correspondents say Mr Singh'svisit is aimed at showing hisgovernment's commitment topoor Indian farmers, who had
India PM pledgeover suicidefarmers
Gujarat killings, Feb-Apr 2002
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Gujarat killings, Feb Apr 2002
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Gujarat Violence
And unemployment
Human rights report
And investment and FDI
And Gujarat BJP Government underNarendra Modi
And justice
Breman, Jan, Arvind Das, and Ravi Agarwal Down and Out: Labouring Under
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Breman, Jan, Arvind Das, and Ravi Agarwal Down and Out: Labouring Under Global Capitalism . Distributed for the Amsterdam University Press. 164 p., richlyillustrated. 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 themisery of these men, women, and children in India has little to do with theunderdevelopment of the past. The poverty here is caused by development and isconcentrated mainly in what is referred to as the informal sector of the economy, whichis 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 bynature. The wages earned from these enterprises are not only low but are alsocharacterized by strong work fluctuations per day, month, or season. Two other factorscharacterize this type of work: the absence of governmental monitoring and also, theabsence of organizations, namely unions, which traditionally represented the concernsof 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 economicgrowth. He has now returned to this location with photographer, Ravi Agarwal, to presenta 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
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, y ( y ),Mumbai are hotspots for business
opportunities in India
The Delhi Metro, which has become
synonymous for state-of-the-art technology,
may now sport two see-through fibre glass liftsin 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 AnujDayal.