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Sixty years of the Republic: The Evolution of India’s Political Economy

with Deepak Malghan, Assistant Professor

From the time of Gandhi and Nehru, India has been attempting the seemingly impossible- bringing about social transformation in a country haunted by the twin legacies of a centuries-old caste system and of imperialist rule, and doing so without violence. This has shaped India’s policies from pre-Independence times.
In this interview with Prof. Deepak Malghan, an Assistant Professor in the Public Policy area at IIM Bangalore and an ecological economist, we attempt to analyze how the political economy has evolved and the effectiveness of this social transformation.


    tejas@iimb: The political economy of a country is shaped by its constitution. How has this worked in the Indian Context over the years?

    DM: Talking about independent India’s political economy is a particularly useful way to reflect on our young republic, helping us uncover the promises we have kept, and the areas where we have failed.

    The centre piece of this new constitution was universal adult suffrage.

    The Indian constitution is a remarkable document. Its distinguishing feature is the fact that it is a very detailed treatise on social transformation, thus making it one of the longest constitutions in the world (approximately 90,000 words). The centre piece of this new constitution was universal adult suffrage. In many ways, one of the central threads running through the “evolution of India’s political economy” is the evolution of this unprecedented experiment – it bears repeating that Indian democracy has befuddled standard theories of democratic transition.

    Part-IV of the constitution that details the Directive Principles of State Policy is one of its most important parts. The second article in this part of the constitution states that the “provisions contained in this Part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws”.

    The neglect of Directive Principles has exacerbated the structural problems inherent in working of electoral politics in a diverse, hierarchical, and unequal society like India.

    Directive Principles of State Policy were an essential part of democratic social transformation that the founders of the republic envisaged. The neglect of Directive Principles has exacerbated the structural problems inherent in working of electoral politics in a diverse, hierarchical, and unequal society like India. While India is now an established electoral democracy, we have also had to deal with the darker side of the competitive political economy that stems from the inherent contradictions of representative politics.

    Means of Social Transformation

    tejas@iimb: Given the lack of too many precedents of countries attempting a non-violent social transformation, what were the factors unique to India which made this a viable option?

    DM: There are a number of historical factors that led to independent India attempting social transformation through democratic means rather than through revolutionary means. However, I believe the most important factor was the nature of mass politics invented by Gandhi, and the kind of coalition that Gandhi built during the thirty odd years that he was at the forefront of the nationalist struggle.
    By the time India became independent there was not only a normative consensus for a gradual, democratic, and constitutional approach to social transformation, but it was also the only politically feasible approach. It was not just Gandhi but the other founders as well who were steadfast in their commitment to democratic politics.
    Nehru’s commitment to democracy was especially important given the role that he would play in shaping the destiny of the fledgling nation. Though, of course, in actuality a large divergence emerged between the methods actually adopted by independent India and those that Gandhi had advocated during the freedom movement.

    tejas@iimb: In trying to emulate China’s growth story in agricultural production through collectivizing farms, did Indian planners fail to factor in the nature of social transformation?

    DM: First, India never attempted to collectivize farming (and thankfully so). Yes, there are some important positives to take away from the Chinese example. The Second Five Year Plan in India did draw some inspiration from what was happening in China at the time. Using agricultural surpluses to bootstrap industrialisation was indeed a common theme between India’s Second Five Year Plan and the Great Leap Forward. At least in theory the Second Five Year Plan also wanted to use increased state control of the agrarian economy to fundamentally alter the deep-seated hierarchies in our agrarian society.
    China apparently performed better than Indian on both counts. Nonetheless, when you take into account all the needless famines and other forms of destruction that accompanied Mao’s bid to transform China’s agrarian society, you begin to see India’s attempt at democratic social transformation in a new light.
    One possible (and admittedly correct) interpretation is that India’s promise of democratic social transformation only managed to keep revolutionary possibilities under check and thus contributed to the elite capture of the democratic process. However, I think using the failures of democratic social transformation as an excuse for mindless violence is not only dangerous but also reflects a complete lack of understanding of history.

    tejas@iimb: In today’s age of separatist politics have we reached a situation where a non-violent social transformation movement is not practicable?

    DM: Democracy anywhere, and especially in a society like ours that harbours deep-seated hierarchies needs constant nurturing and reinvention. The crisis of Indian polity today is that we have reduced democracy to nothing more than a competitive politics of representation. These highly divisive identity politics do need attention. However, to give up on democratic ideals would be a big mistake. What democracy accords you, is space for deliberation – even of the most subversive kind if that is where your proclivities lie.

    I think the real justification for a democratic setup comes from the freedom that it accords.

    While there are several instrumental justifications for democracy, I think the real justification for a democratic setup comes from the freedom that it accords. Once you stop looking for instrumental justifications for democracy, it becomes possible to have a serious deliberation on how a new generation of Indians can sustain and nurture the freedoms that democracy accords. We have quite evidently not been doing this too well. What we need is real deliberation and not the kind of self-proclaimed ‘thought leadership’ that is popular among business elites.

    Lack of National Consensus

    tejas@iimb: The inability of successive governments to raise public consensus on key issues has been attributed to the heterogeneity of the nation? Is there truth in this or is it due to poor governance?

    DM:I think this goes back to my previous comment about learning to distinguish between politics of representation and politics of good governance. A diverse society does pose major challenges but nobody ever claimed that democratic politics is easy, especially in a society like ours. Part of the problem is that the middle class is not very engaged with even electoral politics, let alone normative debates about our democratic polity.
    There are major problems in contemporary political economy that need serious deliberation before any consensus can be reached. Why should an Adivasi in Bastar be part of the consensus that will destroy his very existence? However, coercion as an alternative to democratic deliberation is dangerous and must be resisted.

    tejas@iimb: Is the dichotomous power arrangement between the state and the centre a hindrance to inclusive growth? More specifically, was the allotment of land reform as a state subject a wrong decision in hindsight?

    DM: Land reform is a massive effort in redistribution and world over has been accompanied by much coercive violence. Land reforms have either been carried out by violent revolutions, or by colonial powers. Yes, to some extent land reforms were indeed hampered by the fact that they were the responsibility of individual state governments rather than the central government. However, it is not clear the central government would have somehow mustered enough coercive powers within the constraints of a democratic polity.
    What happened in India was that local elites very quickly figured out that it was possible to capture the democratic process and this made it very difficult for any real agrarian reforms. India’s failure to implement meaningful land reforms has indeed had a major impact on its political economy and our early failures are coming to bite back.

    Statehood demands

    tejas@iimb: Specifically with respect to Telangana, could you run us through the historical reasons behind the uprising?

    DM: The current Telangana agitation is largely related to regional economic disparities. When Indian became independent, the current Telangana region was part of the princely state of Hyderabad, ruled by the Nizam. Hyderabad was forcibly integrated into India after the Nizam refused to accede. The current day Andhra Pradesh was divided between Madras and Hyderabad (not counting a small part that was French territory).
    In late 1952, Potti Sreeramulu began a fast-unto-death to pressurize Nehru into acceding to his demand for creation of the Andhra state. When Sreeramulu died on December 15, the linguistic division of states was inaugurated. Andhra was carved out of Madras in 1953 with Kurnool as the capital of the new state. A State Reorganisation Commission was set up and in 1956 several linguistic states came into being.

    The merger of Andhra and Telengana was fraught with tensions from the very beginning.

    Andhra Pradesh as it exists today was formed by the merger of Andhra and Telangana. This merger was fraught with tensions from the very beginning. Telangana was apprehensive that people from Andhra would come to dominate the political economy of the new state. Indeed before the merger, a ‘Gentlemen’s agreement’ was signed between Congress politicians from Andhra and Telangana that called for quotas for Telangana in the government bureaucracy and more importantly that Andhra people would be discouraged from migrating to Telangana (Hyderabad, the new capital in particular).

    The growth of Hyderabad in the last 15 years and its domination by people from Andhra has fuelled the current demand for Telangana.

    Through the 1960’s, people from Andhra came to dominate the new state as was feared in the 1950s. This led to a Telangana agitation in the late 1960s. The growth of Hyderabad in the last 15 years and its domination by people from Andhra has fuelled the current demand for Telangana. On account of administrative efficiency, history, redressing economic imbalances, I believe that the newly announced state of Telangana might not be such a bad idea after all. I must also mention that the State Reorganisation Commission had also found that Telangana would be a viable state.

    tejas@iimb: What is the Indian policy on statehood now? Once a matter of administrative convenience, does the demand for various states threaten to divide the country today?

    DM: With hindsight to our advantage, it is very clear that the linguistic division of states has played a crucial role in holding a diverse country like India together. I think one needs to look at the various demands for new states on a case-by-case basis. Surely, some of the demands are simply fuelled by desire of the political class to maximise their rents through expanded opportunities for graft. However, some of the demands might actually help administratively, and perhaps also in deepening democracy.
    Proposals for bifurcation or even trifurcation of Uttar Pradesh are a good example. Unlike some other federal constitutions, states boundaries are not guaranteed or indestructible. I think the best way to evaluate new state demands is to constitute a State Reorganisation Commission consisting of eminent non-partisan experts to look into the question in its many complex dimensions. After almost twenty years of economic liberalisation that had fundamentally altered the political economy of India, a Second State Reorganisation Commission would deal with a set of issues that are different from the original Commission.


    India has long been committed to democratic ideals and right from the time of Gandhi and Nehru has been trying to realize those ideals through peaceful social transformation. While this has not been too successful, the temptation to resort to violence should be resisted. Instead, what is needed is deliberation on how to reinvent democracy so as to sustain the freedoms associated with it.


    Prof. Malghan is an ecological economist on the faculty of IIMB. He has a Ph.D. from the University of Maryland and an M.P.A. from Princeton University.


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