Is India Having a Good Crisis?

By Desai, Radhika | Soundings, Winter 2010 | Go to article overview

Is India Having a Good Crisis?


Desai, Radhika, Soundings


If India has weathered the financial crisis, it is largely because of the remnants of its old developmental state model.

It would appear that India is having a good crisis. Despite initial appearances to the contrary, the Great Recession turned out to be anything but 'global'. While the advanced industrial countries, pre-eminently the US, were hardest hit, growth in the emerging economies, India prominent among them, slowed only momentarily. As the crisis wore on and growth differentials widened, it became clear that the emerging countries were increasingly becoming the motors of world growth, thereby signalling an acceleration of the geopolitical shift of capitalism's centre of gravity away from the US and the advanced industrial world and towards them. This shift was announced by Goldman Sachs in its famous 'BRIC thesis almost a decade ago.1 But its pace was slower then, thanks to the US-dominated world financial system funnelling so much of the world's capital, and demand, into the US economy.

India's government, and the policy- and opinion-making elite who generated the country's cross-party neoliberal consensus on economic policy of recent decades, were already in a self-congratulatory mood before the crisis. After decades during which India was seen as a developmental non-event, confined to the tepid 3.5 per cent per annum 'Hindu rate of growth', over the past decade it had finally been hitting the headlines - with the BRIC prediction about India's economic future; the high growth rates that seemed to confirm it, briefly touching 10 per cent in 2006; unprecedented capital inflows; a strong rupee; and a buoyant stock market. Now they could be even more pleased with themselves. The Indian economy had not only escaped the worst, but was even garnering benefits. Growth rates had initially declined, from 9 per cent in 2007-8 to 6.7 per cent in 2008-9, but this decline was tiny compared to those suffered by the advanced industrial world; and the Economic Survey for the year ending April 2010 put the economy on track for 7.2 per cent growth for the year ending April 2010;2 while in his Budget Speech the Finance Minister projected growth rates of 8.5 per cent and 9 per cent over the next two years.3

More generally - as the international business press increasingly recognised in its stepped-up coverage of the Indian economy (for example the Financial Times now devotes a special page on its website to it) - India was second only to China in its importance as a growth pole of the world economy. And the crisis had made the G-20 group, of which India was a member, the successor to the G- 7 group of leading country governments that sought to manage the world economy; Indian policy-makers were now hobnobbing with those of far larger and richer economies. New Delhi and Mumbai, not to mention Bangalore and Hyderabad, were now on the itineraries of the world's most powerful decision-makers. This in turn increased the likelihood that India would become a member of the United Nations Security Council, fulfilling a long-standing aspiration. Yes, China's growth was far more spectacular and sustained, but - reflecting a widespread sense of superiority about India's democracy - many predicted that India would be the Tortoise to China's Hare: 'India has the "soft architecture", the democracy, the rule of law and the freedom of speech that provide shock absorbers and make its economic prospects more enduring'. And these made for a '"better micro story" than China': India had 'its world-class companies and entrepreneurs, its large English-speaking and ITcompetent workforce, and its prudently regulated banking system'.4 And as if to celebrate India's long-awaited entry into the first rank of the world's nations, the Indian government approved the design of a new symbol for the Indian rupee, a still soft currency, so that it could take its place among the world's leading currencies without sartorial handicap.

However, things may not be quite as good as they seem. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Is India Having a Good Crisis?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.