Pacific-Asia and the Future of the World-System

By Ravi Arvind Palat | Go to book overview
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7
TRANSITION IN THE ERA OF U.S. HEGEMONY: INDIAN STATE EXPANSION AND WORLD-SYSTEMS ANALYSIS

Sankaran Krishna

By any yardstick, the contemporary Indian state is economically all-pervasive. On the industrial front, the state runs 8 of the top 10 and 14 of the top 25 industrial firms ( Bardhan, 1984: 103-104); state-run companies recently owned 77.62 percent of the total paid-up capital of all industry ( India Today, 1989: 63); the state owns nearly 25 percent of the paid-up capital of the so-called private industrial sector, and employs two-thirds of the 23 million workers in the organized sector of the economy ( Rudolph & Rudolph, 1987: 22). Through nationalized banks, insurance agencies, development banks, control over foreign exchange and institutions such as the Unit Trust of India, the state exercises further direct ownership over the main sources of credit for enterprises. Finally, the state, through its planning agencies and the myriad licenses and permits, "regulate(s) patterns of private investment down to industrial product level, choice of technology, extending to scale, location and import-content" ( Bardhan, 1984: 38).

On the agricultural front, the state plays a preponderant role in subsidizing vital inputs such as fertilizers, electricity, pesticides, seeds, and irrigation ( Chakravarty, 1987: 104-127). It influences prices through its purchases on the open market and the actions of the Prices Commission, serves as a major retail outlet through its vast network of "ration shops," and influences the legal form of property relations through its periodic (and largely unsuccessful) efforts at land reform. Finally, it has largely replaced the moneylender as the main source of rural credit. Together, the degree of economic penetration is impressive, although it has to be emphasized that economic pervasiveness is not tantamount to the state's autonomy from propertied classes. 1 In historical terms, however, the emergence of this state is very recent. Most analysts would date it to the decades immediately following independence from Britain, especially the period of the Second and Third Five-Year Plans ( 1956-66).

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