Conclusion

This conclusion follows the three main concerns of the volume: the power of business in India, business influence across issue areas, and cross-state variations. The chapters that address these respective concerns and their main contributions were already summarized in the introduction to this volume. This conclusion draws out some key themes that emerge when the chapters are either juxtaposed to each other or considered as a set. In particular, it addresses three broad questions: How do we assess the power of business in contemporary India? How is this power shift shaping democracy and development in India? Do insights from India travel to other countries?

Business and Politics

The political economy of Tamil Nadu presents a puzzle: in spite of politics that are generally considered to be unhelpful to development, the state does relatively well in terms both of economic growth and of human development. The chapter argues that Tamil Nadu is neither a developmental nor a social democratic state, while having some of the features of both. It is, rather, characterized by Bonapartism. While the state has generally been supportive of big business, the relationship between the corporate sector and the political elite is distinctly “arm’s-length.” The power and influence of business groups has not “grown enormously,” as has been claimed elsewhere. Tamil politicians do not rely for financial resources on big business but have their own sources of finance, some of them in semilegal or illegal activities such as sand mining and granite quarrying.

Economic Liberalization and the Structural Power of Business

This chapter focuses on private capital’s structural power, the indirect mode of influence that business enjoys in the policy process as a result of the key economic role it plays in capitalist democracies. Specifically, the chapter traces the evolution of business’s structural power in the era of economic liberalization in India and empirically demonstrates the marked rise in capital’s structural power at both the national and subnational levels since 1991. It also finds that business’s structural power is not constant but varies across states in India. Though capital’s structural power has clearly risen in India in the era of economic liberalization, the chapter suggests that business influence is not hegemonic; the chapter identifies four factors—the importance of noneconomic factors in electoral politics, the internal heterogeneity of capital, the continuing role of the public sector, and patterns of patronage and cronyism—that mitigate business’s structural influence.

Cabal City

This chapter explores the interaction of politics and business through the lens of the city. The power of business to influence politics in India would suggest that Indian cities are, in the classic sense of the term, growth machines. Yet the chapter argues that fundamental problems of governance in India’s megacities have precluded the possibility of business coalitions exerting cohesive influence over investment policies in cities. The result has been the predominance of what may be called cabals that are expert at extracting rents from the city, but in the end fail to promote development. High levels of growth have not been accompanied by commensurate expansion of the cities’ infrastructure and overall coordination capacities. In the end, what is good for business and politicians has been good for neither dynamic capitalism nor inclusion.

Business and State in Odisha’s Extractive Economy

Among India’s states, Odisha stands as a paradox. Unlike other states with episodes of marked hostility to business, Odisha has had an almost unbroken succession of probusiness governments from independence onward. However, unlike developmental probusiness states that nurtured industry to produce jobs and higher rates of economic growth, economic policies in Odisha have failed to produce either sustained economic growth or a substantial economic transformation. Business-state relations in Odisha instead display “neopatrimonial tendencies”; the government extends support to entrepreneurs with no attendant discipline, and in order to succeed, economic actors access personal connections rather than proceed via institutionalized channels. This chapter surveys Odisha’s neopatrimonial state-business relations over three time periods in Odisha: from independence through the 1960s, 1970s–1980s, and the period from the early 1990s onward.

Business-Friendly Gujarat Under Narendra Modi

In Gujarat, close relations between a robust business community, politicians and the bureaucracy crystallized at an early date and survived under the Nehruvian system. In the 1990s, Gujarat liberalized its economy more quickly than most other states. In the 2000s, the economic policy of the new chief minister, Narendra Modi, gave a new dimension to the state’s business-friendliness because it benefited SMEs, the entrepreneurial basis of Gujarat, less than large corporate houses. This “model” had implications not only for the economy (as evident from the problems that the SMEs started to face—as well as the exchequer for fiscal reasons), but also for the society (big firms need fewer workers than SMEs), the polity (grand corruption was a corollary of this pattern), and the environment (big companies were allowed to breach rules and regulations in that domain too). These issues are illustrated by relations between Narendra Modi and Gautam Adani.

Business Interests, the State, and the Politics of Land Policy

This chapter examines the relationship between business interests and the Indian state. It focuses on the legal framework governing the state’s forcible acquisition of land for “public purposes,” including private sector industrial development. Recent land acquisition policy trends reveal ambiguities in the character of the Indian state. On the one hand, in 2013 India enacted legislation containing protections for landowners and communities facing dispossession. The inability of business interests to prevent passage of such a law—or of the probusiness government elected in 2014 to repeal or amend it—suggests that the nexus between business and the Indian state may be less all-embracing than it seems. On the other hand, this case demonstrates the capacity of business to adapt to political obstacles at the federal level—notably, by shaping and supporting a series of state-level reforms designed to neutralize the key community-protection provisions found in the 2013 act.

India’s Porous State

This chapter presents evidence and a theory to understand the current topography of the business-politics relationship in India. Such a theory helps us understand a dual movement: the emergence of a new developmental state as well as the movement of business inside democratic institutions even as India’s political actors engage in numerous business activities. The state has become more porous as business has moved into diverse institutions. Both corrupt and legitimate development activities take place in the shadow of this porous state. The chapter maps the presence of business actors within legislative bodies, parties, independent agencies, and other public agencies to document this trend. Joint-decision arenas such as public private partnerships are key to this business-state compact. Brokers and agents such as key personalities and business associations mediate and move between blurred boundaries of state and regulatory institutions. Politicians have become businessmen and create both laws and invest in business enterprises.

The Politics of India’s Reformed Labor Model

This chapter offers a new theoretical framework to understand Indian labor in the contemporary context of strengthening ties between the Indian state and business. Labor in the twenty-first century must be redefined to include formal and informal workers; it must be re-envisioned to include manufacturing, as well as the growth sectors of construction and services; and the relationship of labor exploitation must account for the market, as well as state politics and ideology. Drawing from the arguments of Antonio Gramsci and Karl Polanyi, historical sources, and interview data, this chapter exposes how, since the 1980s, the Indian state has used informal labor to organize consent for a powerful political project that undermines labor’s twentieth-century gains, empowers large business, and retains state legitimacy with a mass electorate. In addition to examining these hegemonic forces from above, this chapter details the potential and limits of labor’s budding countermovements emerging from below and nuances the common cries of “jobless growth” in India.

Introduction

Over the last few decades politics in India has moved steadily in a probusiness direction. In this volume we seek to analyze the growing power of business groups in the Indian polity. In this introductory chapter to the volume, we first set the scholarly context to analyze these changes, describe the historical background of India’s probusiness shift, discuss the probusiness tilt beginning in the 1980s and its implications for business power, and provide a summary of the chapters that follow in the volume.