India as a Future Super Power: Conjectures and Refutations
Sadri, Sorab, Tara, Sharukh, Patil, D. Y., Indian Journal of Economics and Business
This long paper is an exercise in serious soul searching on the part of the authors who use the positivist mindset of a political economist. It begins with painting the background under which the new regime of liberalization, privatization and globalization unfolded. It then proceeds to define globalization realizing that this not very often done. The paper then posits the socialistic view on globalization and then goes on to mention contradictions in the Indian political economy. The paper sets out to argue why globalization was inevitable under the unicentric capitalist world economy and the change of economic focus on the part of planners. Given the indubitable nature of this change of perspective from a relatively centrally planned economy to a relatively free market one, the paper argues that the process of globalization should be accompanied by a process of liberalization. And, the paper lays down the great strides made by India in spite of many contradictions, scandals and frauds to emerge as a global power in 2011.
Winds of change, over the last two decades or so, have swept the economy and the polity of India. The country, under the guidance of two learned economists, Manmohan Singh and Montek Singh Ahluwalia, had under Narsimha Rao moved towards a free market economy. Old rules of the game have been discarded and new rules have been made. Old citadels of power slowly and grudgingly made way for the new barons to take charge. The Nehruvian concept of a socialistic pattern of society, (whatever that meant), was replaced by an IMF influenced liberalization policy. Indian economics underwent cataclysmic, albeit at times cosmetic, changes. It is in this climate of change that the paper seeks to look at the phenomenon of globalization and what it may mean for the future of our economy in general. The paper champions no cause nor does it wave any manifesto. All that is attempted is a re-examination of a particular aspect of objective social reality. This could be viewed as a brief polemic, which presents an alternative paradigm. The position taken is based on the author's viewpoint and supported by sufficient evidence should the reader wish to delve deep into the established sources of empirical data, some of which have been cited at the end of this paper.
India was teetering on the verge of bankruptcy largely due macroeconomic misadministration of three successive governments at the Center which had also written off large agricultural loans in exchange of the vote bank. As India received a US $7 billion bailout from the IMF and the World Bank, it was clear that the donors would impose certain conditionalities. One such was the liberalization of the economy and decontrolling the market mechanism. The prime mover of this capital restructuring process was none other than the former don, an esteemed economist and Professor of the Delhi School of Economics, Manmohan Singh who rose to become India's Prime Minister and .Sonia Gandhi's public mascot. He has been simultaneously, hailed as a hero and derided as a Quisling by persons from different sides of the ideological spectrum. Whatever the verdict of history might be, the good professor has created quite a ripple, which is fast becoming a tidal wave. It is also a fait acompli and it is going to be almost impossible to spin back the wheel of time. But let that rest. A significant phenomenon, fast on the heels of the liberalization process of the Indian economy, was the spate of mergers and strategic alliances between a select band of Indian corporate giants and their overseas counterparts. The Liberal Economists and others of similar persuasions saw such strategic alliances as merely a transformation of the market structure, from one of monopolistic competition to that of oligopoly and duopoly. There was, however, more of it than what meets the eye. What, is argued, as taking place is the concentration and centralization of capital in Indian industry. …