India’s Economic Growth since the 1980s and the Role of the State: An Alternative Perspective

Abstract

It is imperative to explore the contribution of the Indian state to the country’s impressive long-term growth performance during the free-market era, given the looming demand deficiency problem arising from this iniquitous growth process. Drawing on Marx’s idea of circuit of capital, this article investigates the various ways in which the state contributes to the process of accumulation and economic growth, especially in the context of India during the period of market-oriented reforms. Additionally, this study aims to trace the changing nature of interventions of the Indian state to ascertain the domain and extent of its withdrawal and continued presence. Furthermore, it investigates the interventions undertaken by the Indian state to sustain or cushion the growth momentum at times of economic downturn during the free-market era.

JEL Classification: B51, E62, O11, P16

Keywords

free-market Indian state economic growth accumulation circuit of capital

1. Introduction

India’s growth transition and its sustenance, barring the recent decline, have been frequently considered as the success story of market-oriented reforms and reduction of economic intervention and control by the Indian state. In this context, it has been argued that the optimum role of the state is, at best, that of a facilitator as opposed to an active agent, at least so far as economic growth is concerned (Ahluwalia 2002; Srinivasan and Tendulkar 2003; Basu and Maertens 2007; Panagariya 2004, 2008; Bosworth and Collins 2008; Bhagwati and Panagariya 2013). However, according to an alternative perspective, this higher growth—rather, the very pattern of this growth—has accentuated disparity, which has consequently been critical to the surge in consumption and investment under neoliberalism. This has led some researchers to suggest that the growth-inequality interplay has been driving India’s growth process (Bhaduri 2009; Patnaik 2009). While the deepening class cleavage might have stimulated the growth of two major sources of domestic demand—private consumption and investment (Guha Thakurata and Paramanik 2021)—it has simultaneously increased the possibility of an under-consumption crisis, the manifestation of which, among other things, is India’s recent (pre-Covid-19) growth slowdown (Anand and Azad 2019). Drawing on this context, the current study employs Marx’s idea of “circuit of capital” and the Keynesian idea of demand management policies to assess the contribution of the Indian state to the process of economic growth during the high-growth regime, while also attempting to identify the extent and nature of the intervention and withdrawal of the Indian state from the realm of economic activities, which include expenditure, capital formation, employment generation, etc. More specifically, the objectives of this article are as follows: (1) drawing on Marx’s idea of circuit of capital, explore the various ways in which the state potentially contributes to the process of accumulation and economic growth, especially focusing on the Indian context over the high-growth era beginning in 1980s and during the period of market-oriented reforms beginning in the early 1990s; (2) trace the changing nature of interventions of the Indian State for the purpose of identifying the domain and extent of its withdrawal and continued presence; and (3) study the interventions undertaken by the Indian State to sustain or cushion the growth momentum at times of economic downturn during the free-market era. Notably, it is in this regard that Keynesian ideas related to stabilization policies are relevant.

An enormous body of literature has delved into examining the role of the state or the government with respect to economic growth. More specifically, for the longest time, the debate on the role of government has focused on whether it promotes or hinders economic growth (see, e.g., Bauer 1981; Colclough and Manor 1991; Lal 1983; Little 1982; Reinert 1999; Chang 2003). However, Adelman (2000) reported a change in the dominant perception regarding the state throughout the twentieth century. In this regard, the relevant research pertaining to the Indian context is summarized in table 1.

Table 1.

The State and Economic Growth in India: A Summarized View of the Scholarship.

Fiscal deficit and economic growth	Fiscal deficit adversely affects growth through the crowding out effect by increasing the rate of interest (Rani and Kumar 2017). The causality, however, runs from the interest rate to the fiscal deficit—a higher ex ante real interest rate results in a larger fiscal deficit (Chakraborty 2002, 2016). Bidirectional causality exists between fiscal deficit and interest rate (Goyal 2004).
Composition of fiscal deficit and economic growth	Spending directed at capital formation promotes growth (Ramu and Gayithri 2016).
Fiscal policy, expenditure pattern, and economic growth	Fiscal consolidation could have a negative impact on developmental expenditure (Venkataraman and Urmi 2017). Softer budget constraints on states are more preferable. Moreover, there exists a positive relation between the Centre’s intervention and the economic growth of the state and a negative relation between the autonomy of the state and growth (Sindhu, Khatkar, and Panghal 2016). A comparative analysis concluded that fiscal decentralization has a positive impact on regional growth in the case of India and a negative impact on regional growth in the case of China (Zhang and Zou 2001).
Public expenditure, public debt, and economic growth	Public expenditure/debt could hinder growth (Chandra 2004). Increase in public expenditure leads to a higher GDP (Gangal and Gupta 2013; Mohapatra and Giri 2016). Government final consumption expenditure influences GDP growth positively (Tulsidharan 2006). Although public expenditure had a positive impact on economic growth in the post-reform period, the impact of expenditure on general government has been found to be negative in the postcrisis period (Seshaiah, Reddy, and Sarma 2018). Over the years while macroeconomic policy became countercyclical, in the post global financial crisis era, a strong pro-cyclicality is observed in case of capital expenditure. The long-run capital expenditure multiplier is comparatively much larger than that of revenue expenditure (Goyal and Sharma 2015). The impact of public debt or public expenditure on economic growth could vary between the short run and the long run (Bal and Rath 2018). There could be one-way causality from growth to expenditure (Srinivasan 2013; Ahmad 2014). Alternatively, there might be bidirectional causality between public debt and economic growth (Mohanty et al. 2016).
Composition of public expenditure and economic growth	The consequences of public expenditure depend on the pattern of public expenditure (Bal and Rath 2018; Mohapatra and Giri 2016). Public expenditure on health, education, and infrastructural development affect growth by both increasing the working age population and enhancing human capital (Das and Kar 2016). Major welfare measures (social protection programmes), such as the Mahatma Gandhi National Rural Employment Guarantee Act, the Indira Awaas Yojana, and the National Social Assistance Programme, boost both output and income, while also generating some amount of government revenue (Sharma, Saluja, and Sarma 2016).

Apart from its empirical contribution to the literature, the current research is unique in terms of the methodologies it deploys. The analysis of the contribution of the Indian state to the process of economic growth in an apparently free-market regime follows Marx’s formulation of the circuit of (money) capital (more on this later), while the quantitative assessment of state intervention during crises or economic turbulence is motivated by the Keynesian perspective. Marx’s idea of the circuit of capital offers a holistic understanding of the role of the state beyond the typical state-market binary or government-governance distinction. Such analyses are especially necessary at the current juncture because the Great Recession and its aftermath, followed by the sudden outbreak of COVID-19, have brought the state back into the centerstage of the growth and development discourse.¹

The remainder of this article is structured as follows: section 2 discusses the method of analysis, periodization, and data sources considered in this study, while section 3 outlines the multiple ways in which the state intervenes to buttress capitalist accumulation and thereby contributes to economic growth, while also exploring the specificities of the role played by the Indian state, both quantitively and qualitatively, during the high growth era and especially during the era of market-oriented reforms. Finally, section 4 concludes the article.

2. Method of Analysis and Data Sources

The primary aim of this article is to identify the multiple ways in which the Indian state actively buttressed the capitalist accumulation process during the supposed state-free market era.² Notably, a marked shift from an active state to a facilitating state is usually expected upon the introduction of market-oriented reforms. Along these lines, an increasing academic engagement with “governance” as opposed to “government” has been observed globally for quite some time now (Levi-Faur 2012). For example, according to the World Bank, occurrences like the East Asian Miracle did not result from a typical conservative economic policy model but are attributable to “market-friendly intervention” and “good governance.” This narrative emphasizes the role of the government as a facilitator as opposed to an active agent of growth, thus ensuring both economic growth and development (Kiely 1998). However, Kiely (1998) offered a theoretical as well as an empirical criticism of the World Bank’s official version. Moreover, the literature on governance that deals with the scope and power of the state is reasonably heterogeneous, comprising perspectives ranging from “hollowing out of the state” and “degovernancing” to “state-centered (multi-level) governance” and “big governance” (Levi-Faur 2012). Furthermore, a major indicator of good governance is ease of doing business, which means that an improvement in good governance should ensure a more business-friendly environment (Boța-Avram 2014). In this context, it should be noted that the concept of ease of doing business is a buzzword that has been highly criticized and debated as a policy tool.³

This study adheres to neither the typical distinction between “government” (active state) and “governance” (facilitating state) nor the simplistic state-market binary. In this context, while analyzing the role of the Indian state in capitalist accumulation in independent India, Das Gupta (2016) argued in favor of going beyond this binary. Instead, therefore, Marx’s conceptualization of the circuit of (money) capital is employed in this study. Harvey (2004: 73) observed:

Marx’s general theory of capital accumulation is constructed under certain crucial initial assumptions which broadly match those of classical political economy, and which exclude primitive accumulation processes. These assumptions are: freely functioning competitive markets with institutional arrangements of private property, juridical individualism, freedom of contract and appropriate structures of law and governance guaranteed by a “facilitative” state which also secures the integrity of money as a store of value and as a medium of circulation.

By relaxing some of its assumptions, this framework can easily be used in this study to explore how the state can potentially intervene in different stages of the accumulation process, thus possibly contributing to economic growth. The method adopted in this study is primarily inspired by Vakulabharanam’s (2014) analysis, which relied on the concept of circuit of capital to account for the genesis of all the biggest crises of capitalism and the subsequent responses/reactions. The circuit of capital is a formulation that is capable of offering a comprehensive framework to explain all the kinds of crises encountered by capitalism so far. In contrast, the neo-classical tradition failed to explain the Great Depression (realization crisis) as much as the credibility of the Keynesian perspective came under scrutiny during the crisis of the late 1960s and early 1970s (profitability crisis), effectively paving the way for the “Monetarist Counter-revolution” (Vakulabharanam 2014; Harvey 2013). The circuit approach is well-equipped to accommodate the conservative political rhetoric of a minimalist state, its institutional restatement disguised as good governance,⁴ as well as the Keynesian political assertion of an interventionist and welfare state.

The current study relies on both quantitative and qualitative analysis. For the quantitative analysis, the available data on government expenditure, fiscal deficit, capital formation, and employment generation are utilized to evaluate the relative presence of the Indian state across multiple axes. Furthermore, the changing nature of state intervention is examined by inspecting the composition of expenditure and capital formation, among other factors. Furthermore, for the qualitative part of this study, relevant materials are acquired from the existing literature.

This analysis entails a comparison of two broad periods: the pre-reform high growth phase from 1980–1981 to 1990–1991 and the post-reform era from 1991–1992 to 2019–2020. However, to address the third objective, which involves examining the contribution of the Indian state to economic growth during periods of downturn or crisis in the post-reform period, a different periodization is considered. The entire period of market-oriented reforms is divided into the following subperiods, based on the trend in economic growth: 1991–1992 to 1996–1997 (high and upward growth experienced immediately after reforms were introduced), 1997–1998 to 2002–2003 (dwindling growth exhibiting a downward trend that coincided with the East Asian crisis), 2003–2004 to 2007–2008 (a period of unprecedented growth), 2008–2009 to 2012–2013 (immediate aftermath of the global crisis), 2013–2014 to 2015–2016 (short-lived recovery), and 2016–2017 to 2018–2019 (recent growth debacle) (see figure 1a and 1b). The relative significance of the Indian state is studied across these subperiods, considering relevant data collected from the Economic and Political Weekly Research Foundation India Time Series and the Reserve Bank of India.

3. Accumulation and the Indian State in the Post-reform Era

This section outlines the multiple ways in which the state can buttress the capitalist accumulation process and discusses the specificities of the Indian state in this regard over the high growth era starting in 1980s, especially focusing on the period of the free-market paradigm. To conduct this analysis, Marx’s conceptualization of the circuit of money capital was deployed.

According to Marx, the circuit of (money) capital comprises three distinct phases—phase 1: conversion of money capital into commodity capital (M–C), phase 2: embodiment of surplus value (C–C′), and phase 3: realization of surplus (C′–M′). In this study, the contributions of the Indian state and its economic involvement in the process of accumulation and economic growth were assessed by focusing on each phase of the metamorphosis of money capital (capital in money form). Notably, the specific nature of state intervention usually varies according to the regime of accumulation. The exercise conducted in this study goes beyond the typical state-market dichotomy, thus enabling a nuanced understanding of the actual involvement, intervention (and its lack thereof), and contribution of the Indian state to the process of accumulation and economic growth since the decade of 1980s and more specifically during the free-market era.

3.1. Phase 1: M–C

First, the circuit of capital is initiated when the capitalist enters the market with money (M), intending to buy the means of production and labor power. In this regard, the ownership of money and/or effective access to/control over it is critical, in addition to the adequate supply of both money and credit for investment. To meet all these conditions, both a well-functioning financial market and a sound monetary policy is necessary. In such a context, the state contributes to the mobilization and allocation of economic finance and the maintenance of a stable financial condition. Moreover, adequate availability of finance is relatively more critical for the success of firms in less developed countries, and as such the role of the respective states could be crucial in this regard (Moudud and Botchway 2008).

In this context, the Indian state not only contributed considerably to the economic growth turnaround of the 1980s but also continued to remain significant even during the period of market-oriented reforms (McCartney 2011). McCartney (2011) observed that “during the 1990s, the state coordinated foreign borrowing, influenced the end use of foreign debt, controlled the disruptive potential of short-term capital flows, influenced the composition of capital inflows and segmented domestic and international capital markets” (McCartney 2011: 182). Along the same lines, the establishment of the National Stock Exchange was a crucial innovative government initiative meant to facilitate financing for private sector expansion in India.

Furthermore, state policies have enabled private corporations to retain a larger share of their profits (surplus-value) for reinvestment (a logical source of M in the forthcoming round of circulation). For instance, estimates suggest that over the period 2011–2012 to 2019–2020, the total revenue forgone in India amounted to over 7 lakh crores.⁵ In addition, tax holidays have long played a major role in the development of one of India’s most important growth-driving sectors—information technology (IT) (Das and Sagara 2017). Competition among state governments in India to attract IT companies is largely driven by, among other things, lucrative fiscal incentives, with this competition even reaching the lower levels of the government, that is, the city government (Das and Sagara 2017). In general, the neoliberal regime of accumulation compels state governments to compete—more so in developing countries such as India (Adnan 2014). In this regard, the Statement of Revenue Impact of Tax Incentives under the Central Tax System, which was earlier called the Statement of Revenue Forgone, presents a detailed scenario of the tax incentives extended by the Government of India and its consequences for the government’s earning. The numbers pertaining to the total tax returns collected for the financial year 2019–2020 show that the effective tax rate for the entire set of corporations that reported profits stood at around 22.54 percent, which is about 5 percentage points lower than that reported for the 2018–2019 financial year (see Receipt Budget 2022–2023). Furthermore, the percentage share of corporation tax in the gross tax revenue has declined considerably over the years (see figure 2). In addition, it is discernible that larger corporations, especially those within the profit before taxes range of more than five hundred crores, have faced relatively lower effective tax rates compared to those belonging to the lower profit ranges and the overall average effective tax rate (see figure 3). By 2019–2020, the effective tax rate in India declined steadily, coupled with an increasing range of profit before tax.

Other indirect ways to ease accumulation, with long-lasting consequences for the economy at large, are also prevalent. The case of surmounting nonperforming assets is glaring evidence of the protection of corporate interests, which appears to have been prioritized even over macroeconomic stability, by the Indian state. Ironically, the banking sector reforms of the 1990s were meant to increase the profitability of public sector banks (Chandrasekhar and Ghosh 2018). With regard to defaults by business houses, the Indian state has failed to hold them accountable in any effective manner. Instead, there have been numerous vehement attempts aimed at the creation of multiple legal safety nets, such as tax exemptions (Das Gupta 2010), for them. Researchers have identified that the top ten corporates in India alone (as of March 2015) contribute to about 10–14 percent of the total bank credit and about 27 percent of the total credit extended to industry (Prasad and Gupta 2019).⁶ Furthermore, according to the Reserve Bank of India, only 12 corporations accounted for about 25 percent of the gross nonperforming assets in 2017. Reports also suggest that corporates have contributed to about 73 percent of the total bad loans provided by public sector banks.⁷ Therefore, it is evident that the state has been consciously and continuously designing policies that establish the ownership of money capital and secure access to it at both the beginning of circulation and during its further continuation.

Second, the process of primitive accumulation or accumulation by dispossession (Harvey 2004) also serves to ease the conversion of money capital into commodity capital in the form of the means of production, which indicates easier or cheaper access to land or minerals and the like (Adnan 2014).

The M–C (phase 1) process needs to be conducted as quickly as possible, for which nonconstraining environmental laws, smooth land acquisition, and well-suited property rights are crucial. The National Mining Policy is one such initiative, highlighting the alteration of policies and laws to accommodate the needs of big corporates. Notably, during the neoliberal era in India, the construction sector emerged as a key sector, attracting large amounts of investment and registering significantly high growth for a long period of time. Therefore, it is of no surprise that this sector created huge backward linkages for various other sectors, such as cement production. Notably, the cement industry not only has a powerful cartel comprising the biggest players in India but is also responsible for large-scale evictions in multiple states, such as Chhattisgarh. The nexus among builders, political leaders, and election finance—a relationship that has been carefully studied by Kapur and Vaishnav (2018)—is one of the numerous ramifications of the state-business nexus. This further highlights the ways in which the sectoral pattern of growth, primitive accumulation, and state machinery are deeply intertwined. A neoliberal state is more committed to offering various advantages to big corporates, while also tending to reduce the time required for completing legal formalities (Das and Sagara 2017). Furthermore, the state is an active and the most powerful agent for the creation of sites of production (e.g., special economic zones and export processing zones), with the Indian state actively promoting the creation of business-friendly economic zones, which in turn entails the process of accumulation by dispossession (see Basu 2007; Levien 2012). The creation of these hubs of production, coupled with the provision of adequate infrastructure facilities, is aimed to ensure lower transaction costs as well as lesser time required to begin the production process, which consequently helps reduce the turnover time of capital. In this context, Heinrich (2013: 133) stated:

The time spent by capital in the production process is the time of production [emphasis original]; the time spent by capital in the circulation process, whether in the form of money capital seeking commodity sellers, or as commodity capital seeking buyers, is capital’s turnover time [emphasis original]. The time of production is longer than pure labor-time: if machines remain idle overnight, or if supplies are kept in storage, then capital is still located within the production process, even if temporarily outside of labor-time. However, it is only during labor-time that value and surplus value are produced, so that the capitalist attempts to keep excesses of production time and turnover time beyond the actual labor process as low as possible.

An example of the creation of hubs by the Indian state is its proactive promotion of IT sector growth by establishing numerous software technology parks across various urban spaces (Das and Sagara 2017). Through such initiatives, the state helps capitalists overcome several barriers to accumulation (Levien 2011). In this context, it should also be noted that many of the above policies could be considered as contributing to the ease of doing business. Basu (2007) justifiably argued that there is a major difference between the current age of imperialism and its earlier version, with the former’s reliance on state power being more and explicit so far as “rewriting economic laws and their harsh implementation” is concerned (Basu 2007: 1281). Notably, primitive accumulation or accumulation by dispossession does not have to take the standard route. Rather it can be and is achieved, at both national and international levels, through processes such as privatization, tax incentives, and other kinds of financial support like subsidies in combination with a reduction in social expenditure, and manipulated financial dependence (e.g., debt traps) and the style of management of a financial crisis (Bhattacharya 2022).

Furthermore, along with corporate-funded/owned media houses, the state too contributes to radical shifts in the official discourse and lexicon of development. The importance of media in the age of global communication is manifold, considering that media houses are now located within the global network of capitalist accumulation. McChesney (2001: 1) argued that “economic and cultural globalization arguably would be impossible without a global commercial media system to promote global markets and to encourage consumer values.” Furthermore, a neoliberal state is rarely tolerant of any opposition to and political mobilization against the unbridled power of corporates so as to continue the process of development or, to use the more sophisticated term, the ease of doing business. Such actions serve to delegitimize the opposition using a hegemonic counternarrative, thus cracking down on it by deploying all kinds of state machinery and branding it antidevelopmental and/or antinational. The Indian state is no exception to this.

Third, disinvestment or privatization, which converts public resources into private ones often at a below-the-market rate, is another popular tool used by a neoliberal state to buttress capitalist accumulation by allowing more commodity capital (C) to be purchased using the same money capital (M). Interestingly, an opposite method is also used to extend M to corporate enterprises, where public institutions buy off private companies’ shares at exorbitantly high rates. This practice, also known as private placements, is used to arrange the resources required for a corporate investment project through the “private sale” of equity or debt instead of a “public offering” through capital markets. This strategy not only bypasses several institutional hurdles but also reduces transactions costs involved in selling shares through proper institutional channels since, unlike disinvestments, the government is likely to offer a higher-than-the-market price. In India, this was a dominant practice in the period immediately following liberalization and it remained so throughout the decade of the 1990s (Mukherjee Reed 2001). Another such method to ease capitalist accumulation is public-private partnerships—a sophisticated process of transferring ownership from the public to the private.⁸

Over the period of market-oriented reforms, the Indian state swiftly curtailed its presence in the domain of capital formation, leaving more room for its private (corporate) counterpart (see figures 4 and 5). As a result, the average annual share of public sector capital formation in the gross fixed capital formation (GFCF) was found to be much lower during the post-reform period compared to the pre-reform era (the decade of 1980s). However, the decline in this share began around the mid-1980s—the decade that marks the gradual initiation of liberalization and, more importantly, the government’s attitudinal shift in favor of the capitalist class. A comparison of the sectoral composition of GFCF of the overall economy and the public sector is presented in table 2. It is evident that the change in the relative importance of the manufacturing sector over the period of reforms compared to the period preceding it for the overall economy is lesser than the same for the public sector. The case for mining and quarrying is somewhat similar (see table 2). Furthermore, in the post-reform era, financial services claim an almost comparable relative share for both the overall economy and the public sector. Meanwhile, a major increase in relative share can be observed for public administration and defense. In this context, it must be noted that even though the state made room for private players, the relative share of the manufacturing sector for the overall economy, as mentioned above, declined during the period of reforms.

Table 2.

Capital Formation Composition in Terms of Industry of Use.

Industry	Overall Economy		Public Sector
Industry	Pre-reform (1980–1990)	Post-reform (1991–2018)	Pre-reform (1980–1990)	Post-reform (1991–2018)
Agriculture, livestock, forestry, and fishing	12.21	9.02	8.65	5.91
Mining and quarrying	3.41	2.05	9.67	6.61
Manufacturing	22.17	20.47	13.39	7.58
Electricity, gas, water supply, and other utility services	16.14	10.47	22.52	23.02
Construction	1.94	4.23	0.75	4.02
Trade, repair, hotels, and restaurants	2.14	4.89	0.43	0.17
Transport, storage, communication, and services related to broadcasting	8.31	8.39	13.03	12.93
Financial services	1.44	1.72	0.96	1.6
Real estate, ownership of dwellings, and business services	16.13	25.4	0.02	0.03
Public administration and defence	14.04	9.08	28.54	34.68
Other services	2.07	4.28	2.05	3.46

Source: Author’s calculation using data collected from MoSPI.

Note: The above numbers represent the average annual share. The 2011–2012 price series has been used for the calculation.

Fourth, the Indian state contributes to the sustenance of a large pool of unemployed labor. One possible reason for this is the state’s curtailment of public sector (permanent) job opportunities with public sector job creation in India declining steadily since the mid- to the late 1990s (see figure 6). Nagaraj (2017), in his discussion on the employment scenario in the public sector in India, noted that the Indian state curtailed scopes of employment at a time when remunerative employment growth in the organized private sector was anything but satisfactory, despite the output growth and the rate of capital accumulation registering historical highs. Furthermore, Chowdhury (2014), Tejani (2015), and D’Costa (2017) identified and analyzed jobless growth in India and its fallout. Notably, the overall employment scenario has only been worsening (Kannan and Raveendran 2019). Furthermore, the government’s attitude toward the problem of unemployment embodies not only class bias but also considerable gender bias. Das (2015) particularly highlighted this issue with reference to the growing problem of informality in the country, specifically in the context of the post-2008 crisis era. Other recognizable ways by which the government has sustained the pool of unemployed labor include its inadequate response to the severe agrarian distress and its legitimization of and active participation in the displacement induced by various private/public/public-private partnership endeavors, both of which have resulted in swelling the reserve army of labor. However, according to Chandra and Basu (2007), despite the existing pool of a massive labor reserve, the capitalist class would still be enthusiastic to further increase this size. The researchers noted that primitive accumulation, among other things, ensures that effective “fresh entrants into the already burgeoning ranks of the proletariat will increase the relative surplus population—floating, latent, and stagnant—depressing real wages and thereby increasing the rate of profits on each unit of invested capital” (Chandra and Basu 2007). However, it is often accompanied by the exclusion of a large number of (dispossessed) people from the circuit of capital, contributing to persistent overarching reliance on self-employment, indicating “dispossession without proletarianization” (Sanyal and Bhattacharya 2010; Sanyal 2014). This has resulted in the persistence of a self-employed workforce in India. In this context, it must also be noted that most of the above policies are consistent with some typical (supply side) policy prescriptions of economic orthodoxy or the neoliberal paradigm.

3.2. Phase 2: C–C′

In the second phase of the circuit of capital, the surplus value is produced. A high rate of surplus value creation, followed by its realization, is imperative for the sustenance of economic growth. In this context, it should be noted that a higher rate of surplus or a higher rate of profit may or may not lead to high growth. However, in the Indian context, studies have highlighted that a higher rate of accumulation is linked to a higher profit rate and profit share (see Basu and Das 2016; Guha Thakurata and Paramanik 2021). This study explored the ways in which the state can contribute to, what Marx identifies as, absolute surplus and relative surplus. Both these factors are closely connected to the overall vulnerability of the working class, which leads to a decline in its bargaining power vis-à-vis the capital. In other words, it is easier to extract a larger absolute surplus from a relatively more vulnerable work force. Furthermore, the provision of a higher relative surplus mediated by technological changes adds to the vulnerability of the working class.

Ceteris paribus, a higher unemployment rate aggravates the degree of working-class vulnerability.⁹ Consequently, corporations do not find it difficult to make employees work harder for longer hours, especially during difficult times. In addition to the ways in which the state contributes to the persistence of high unemployment or low-quality jobs (as discussed earlier), it actively participates in diluting or diminishing the power of labor unions. Ever since the 1980s and more aggressively during the period of market-oriented reforms, the Indian state has systematically ensured this either directly by controlling the labor movement or indirectly by reducing the power of trade unions (Kohli 2006; Sundar and Sapkal 2017; Bhowmik 2015). For instance, India’s most prominent growth driver and one of its largest arenas of formal employment—the IT sector—lacks any organized union activity (Bisht 2010).

The state also enhances the ability of the private sector to fire at will by molding labor laws (Guha 2009, 2013) in a way that increases the vulnerability of even formal employees. The persistence of the precarious condition of informal workers in various sectors (organized and unorganized alike) where they are effectively treated as bonded labor, which is mediated by, among other things, the denial or even the lack of official recognition, is reflective of an unofficial nexus between the state and the capitalist class. All these together ease the appropriation of a greater absolute surplus.

Moreover, the deployment of better technology, which swells the amount of relative surplus, necessitates the supply of skilled labor and professionals. In this regard, the Indian state directs half of its total educational expenditure toward producing college graduates who would add to the supply of an educated labor force, although India’s performance in vocational training has continued to be dissatisfactory (Nagaraj 2010). Prior to the boom in private engineering colleges, the Indian state had set up premier institutions, such as the Indian Statistical Institutes (ISIs), Indian Institutes of Technology (IITs), Indian Institutes of Management (IIMs), Indian Institute of Science (IISc) Bangalore, National Institutes of Technology (NITs), and the Indian Institutes of Information Technology (IIITs) to produce world-class scientists, technicians, and professionals. These institutions also conduct various research and innovation programs that contribute to India’s scientific progress (Majumdar 2008). However, despite the private sector contributing to about two-thirds of the total number of engineering and polytechnic colleges, the quality of graduates in India has remained a matter of concern (Majumdar 2008). As a result, public institutes continue to be the most trustworthy and preferred places of study. Drawing on this, Majumdar (2008) argued that the Indian state (both at the central and the state level) has been proactive in this regard. The contribution of public institutes in preparing India to embrace technological advancement, which has led to high-tech service-sector led economic growth, is undeniable (Das and Sagara 2017).

Notably, Mazzucato (2014) debunked the most popularly believed and vigorously promoted myth regarding the ineffectiveness, if not complete absence, of the state with respect to innovation by showing that the technological revolution that defines today’s capitalism stands on the shoulders of a very strong, what she calls, “entrepreneurial State.” Furthermore, Chang (2003) argued that under capitalism, the state sponsors a large segment of new-age technology or promotes it in various ways. In the Indian context, the National Science and Technology Management Information System (NSTMIS) survey reveals that during 2004–2005 to 2014–2015, the gross expenditure on research and development (GERD) in India increased by more than three times. Moreover, in 2014–2015, more than 60 percent of GERD was contributed by the Indian state (National Science and Technology Management Information System [NSTMIS] 2017). Unlike the United States, United Kingdom, China, Mexico, and some other countries, the Indian state incurs more than 50 percent of its GERD, although the share of GERD in its GDP (in 2014–2015) is considerably less (0.69 percent) than that of many other countries, including all the other BRICS members—the shares of GERD in the GDP of Brazil, Russian Federation, China, and South Africa are 1.24 percent, 1.19 percent, 2.05 percent, and 0.73 percent, respectively (NSTMIS 2017).

3.3. Phase 3: C′–M′

The third part of the circuit, entailing the realization of surplus, is linked to the overall condition of effective demand. With the steady and aggressive spread of neoliberalism, intra-country inequality is on the rise, leading to an increase in the possibility of the problem of demand deficiency or a realization crisis. During the post-reform era in India, not only did exports account for a larger share of economic growth (as shown later) but the investment function was also found to be structurally biased (at least for the registered manufacturing sector), in the sense that exports tend to boost manufacturing growth irrespective of the direction of change in the trade balance (Dasgupta 2022). Therefore, a slowdown in the global economy is highly likely to adversely affect both India’s output and investment growth (see figure 7). Moreover, a close association between trends in the share of capital formation and that of exports in the GDP is easily discernible. For instance, figure 7 shows that within two to three years after the global crisis, both trends underwent a reversal.

Historically, state intervention in circumstances of demand deficiency has been critical—the global crisis simply brought the problem of lack of effective demand to the forefront. Since, as noted by Keynes, demand deficiency in capitalism is a natural and persistent outcome, state intervention becomes a necessity. In Marxian terminology, the problem of demand deficiency could lead to what can be called an underconsumption crisis or a realization crisis. This part of the circuit of capital, therefore, resonates with the demand management policies promoted by Keynes and Keynesians. However, an expansionary fiscal policy to counter demand deficiency under neoliberal hegemony often encounters strong opposition. More specifically, because of the idea of austerity, such a policy is usually disapproved, barring circumstances where a crisis is otherwise unmanageable (e.g., the immediate aftermath of the global crisis of 2008).

India is not an exception to this trend. The share of its primary deficit as a percentage of the GDP declined considerably (see table 3) during the post-reform period, and so did the (median) contribution share of government final consumption expenditure to the growth of aggregate demand (see table 4).¹⁰ Furthermore, the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 institutionalized fiscal restraint/discipline in the country. This, unsurprisingly, impacted the spending pattern of the government at different levels.

Table 3.

Public Spending Relative to the GDP.

	Central Government
	1980–1990	1991–2019	1991–1996	1997–2002	2003–2007	2008–2012	2013–2015	2016–2019
Gross fiscal deficit	6.65	4.84	5.41	5.72	3.61	5.62	4.15	3.76
Gross primary deficit	4.02	1.11	1.31	1.26	–0.15	2.42	0.89	0.67
Revenue expenditure	11.18	12.15	11.77	12.45	12.08	13.43	11.71	11.07
Capital expenditure	5.95	2.50	3.62	2.82	2.62	1.77	1.70	1.67
Total expenditure	17.14	14.64	15.39	15.27	14.70	15.20	13.41	12.75
	State Governments
	1980–1990	1991–2019	1991–1996	1997–2002	2003–2007	2008–2012	2013–2015	2016–2019
Gross fiscal deficit	2.80	2.83	2.58	3.88	2.67	2.25	2.63	2.73
Gross primary deficit	1.69	0.91	0.83	1.58	0.28	0.6	1.1	1.03
	Central and State Governments Combined
	1981–1990	1991–2019	1991–1996	1997–2002	2003–2007	2008–2012	2013-2015	2016–2019
Gross fiscal deficit	7.92	7.25	6.82	8.82	6.22	7.84	6.77	6.45
Gross primary deficit	4.77	2.16	1.98	3.22	0.56	3.16	2.05	1.71

Source: Based on data collected from the Reserve Bank of India.

Note: All numbers are in percentage terms.

Table 4.

Demand Decomposition.

	Median Annual Contribution Share		Median Annual Growth Ratio
	Pre-reform (1980–1990)	Post-reform (1991–2019)	Pre-reform (1980–1990)	Post-reform (1991–2019)
PFCE	55.37	55.24	0.79	0.92
GFCE	10.41	9.34	0.9	0.92
GCF	25.34	40.86	1.28	1.19
GFCF	19.57	32.52	1.01	1.04
EXP	5.96	19.53	1.14	1.85
IMP	6.82	29.97	0.99	1.77

Source: Author’s calculation using data collected from MoSPI.

Note: PFCE = private final consumption expenditure; GFCE = government final consumption expenditure; GCF = gross capital formation; GFCF = gross fixed capital formation; EXP = exports; IMP = imports.

However, during the phases in post-reform India when both exports and (corporate) capital formation growth failed to be satisfactory, government expenditure—especially government consumption expenditure—largely contributed to stimulating aggregate demand (see table 5). Meanwhile, although the primary deficit as a share of the GDP registered a noticeable increase immediately after the global crisis, no such change could be observed during the late 1990s or during the recent pre-COVID slowdown. Notably, Kalecki (1943) argued that industry leaders would never favor an expansionary fiscal policy, which would eventually take an economy toward the state of full employment, but would rather pursue securing their position in the name of “sound finance” so as to enjoy power through “the state of confidence.” One must recall that the FRBM Act in India was proposed with the same spirit, and was to be relaxed in the immediate aftermath of the global crisis. One of the main sources of increase in government consumption expenditure during this time was the seventh pay commission, which boosted aggregate demand considerably. Furthermore, prior to the crisis, the government had announced a potential farm loans waiver that, considered in terms of the global crash, appeared as a legitimate policy response on the part of the government. However, this met with strong opposition from economists involved in policy making (Mehra 2019). Regarding such a context, Kalecki (1943: 4) aptly asserted:

The necessity that “something must be done in the slump” is agreed; but the fight continues, firstly, as to what [emphasis original] should be done in the slump (i.e., what should be the direction of government intervention) and secondly, that it should be done only [emphasis original] in the slump (i.e., merely to alleviate slumps rather than to secure permanent full employment).

Table 5.

Growth Episode-Wise Median Contribution Share and Growth Ratio of the Various Components of Aggregate Demand.

	1980–1990	1991–1996	1997–2002	2003–2007	2008–2012	2013–2015	2016–2019
PFCE	55.37 (0.79)	56.07 (0.86)	51.16 (0.83)	46.4 (0.75)	56.36 (1)	55.68 (0.99)	58.27 (1.04)
GFCE	10.41 (0.9)	6.75 (0.62)	10.54 (0.91)	5.21 (0.5)	13.64 (1.25)	9.34 (0.93)	10.03 (0.98)
GCF	25.34 (1.28)	16.73 (0.76)	33.24 (1.47)	72.35 (2.43)	49.57 (1.27)	29.12 (0.83)	38.29 (1.07)
GFCF	19.57 (1.01)	15.46 (0.74)	39.88 (1.8)	47.61 (1.72)	32.65 (1.04)	11.45 (0.35)	33.4 (1.09)
EXP	5.96 (1.14)	16.93 (2.43)	19.45 (2.14)	47.01 (2.53)	46.55 (2.29)	6.04 (0.24)	13.08 (0.64)
IMP	6.82 (0.99)	27.53 (3.55)	25.42 (2.17)	41.43 (2.67)	47.36 (1.86)	−18.54 (−0.73)	21.87 (0.95)

Source: Author’s calculation using data collected from MoSPI.

Note: PFCE = private final consumption expenditure; GFCE = government final consumption expenditure; GCF = gross capital formation; GFCF = gross fixed capital formation; EXP = exports; IMP = imports. The respective growth ratios are presented in parentheses.

Although public expenditure, in terms of the level or its relative significance with respect to the GDP, reduced considerably over the period of reforms, the changing composition of public spending must not be overlooked. In this context, it is not necessarily the level of spending but rather the type of composition of the spending that influences economic growth positively or adversely (see Karagiannis and King 2019; Bal and Rath 2018; Mohapatra and Giri 2016; Das and Kar 2016). Moreover, spending patterns across different levels of government might vary.

Explaining the trends in the developmental expenditure of state governments, Dasgupta (2012) noted that it is only during mid- to late-2000s that a rising trend in the share of developmental expenditure as a percentage of the GDP can be observed. Dasgupta (2012) further emphasized the constraints of having an exogenous pool of net resources, which is expected during a neoliberal era. Nonetheless, the composition of expenditure by state governments has increasingly turned in favor of developmental vis-à-vis nondevelopmental expenditure (see figure 8).¹¹ Although the pattern is somewhat similar in the case of the central government, the relative ratios are quite different. However, a detailed analysis of these trends is beyond the scope of the current study (for the period-specific ratios/shares, see tables A1 and A2 in appendix A).

The state can also boost aggregate demand by contributing to the growth of the other three components of aggregate demand—private consumption, investment (public and private), and export. For example, the state’s commitment to rapid urbanization would contribute significantly to both private consumption and investment. As discussed earlier, although the share of public sector GFCF as a share of the overall GFCF has decreased, the composition of public sector capital formation has veered considerably away from machinery and equipment in favor of construction. Moreover, as Harvey (2013) argued, suburbanization may also help counter the overaccumulation crisis by creating major avenues for a large amount of surplus to be reinvested. Harvey (2014) observed:

Crises are essential to the reproduction of capitalism. It is in the course of crises that the instabilities of capitalism are confronted, reshaped, and re-engineered to create a new version of what capitalism is about. Much gets torn down and laid waste to make way for the new. Once-productive landscapes are turned into industrial wastelands, old factories are torn down or converted to new uses, working-class neighborhoods get gentrified. Elsewhere, small farms and peasant holdings are displaced by large-scale industrialized agriculture or by sleek new factories. Business parks, R&D, and wholesale warehousing and distribution centers sprawl across the land in the midst of suburban tract housing, linked together with clover-leafed highways. Central cities compete with how tall and glamorous their office towers and iconic cultural buildings might be, mega-shopping malls galore proliferate in city and suburb alike, some even doubling as airports through which hordes of tourists and business executives ceaselessly pass in a world gone cosmopolitan by default. Golf courses and gated communities pioneered in the USA can now be seen in China, Chile, and India, contrasting with sprawling squatter and self-built settlements officially designated as slums, favelas, or barrios pobres [emphasis in original]. (Harvey 2014: ix)

Furthermore, the development of urban or semiurban spaces tends to produce export-oriented “business hubs” that facilitate export growth. In India, for instance, there is Electronic City in Bangalore, Sector V in Kolkata, and Hi-Tech City in Hyderabad—hubs that absorb a large amount of investment. Moreover, over the last couple of decades, the Indian state has been proactive in creating export processing zones (EPZs), such as the Noida Export Processing Zone (NEPZ), Visakhapatnam Export Processing Zone (VEPZ), Falta Export Processing Zone (FEPZ), etc. This drive to create EPZs in neoliberal India has led the government to actively engage in converting collective resources into private capital (primitive accumulation/accumulation by dispossession), a factor that has been discussed earlier in this article. Notably, the creation of EPZs involve the state’s contribution to both the first phase (conversion of money capital into commodity capital) and last phase (realization of surplus) of the circuit of capital. Apart from infrastructural facilities, EPZs are characterized by various incentives, fiscal and nonfiscal concessions, and so on, all of which are aimed at enhancing export competitiveness.

The state can also induce private consumption through both government consumption expenditure and tax policies. Apart from the typical tax multiplier, tax policies serve to strengthen, or at least maintain, the relative position of the class of urban elites (comprising owners, managers, and professionals) during a crisis, whose consumption patterns are critical to the overall growth of private consumption. Therefore, the elites not only reap most of the benefits during a boom, but they are also the ones who are bailed out first during a crisis. In this regard, budget documents suggest that post-2008, the share of direct tax in the GDP has declined steadily. Furthermore, the India Inequality Report of 2018 published by Oxfam India shows that between 2004–2005 and 2014–2015, revenue forgone through tax relief to the rich and to corporates increased about three times, with the largest corporate houses enjoying the highest tax benefits (Guha 2007; Himanshu 2018).

Utilizing Marx’s idea of the general circuit of (money) capital, this discussion demonstrates that contrary to popular belief, the role of the state in a developing country such as India is no less critical for capitalist accumulation and sustained growth in a neoliberal regime as it is in dirigisme. Therefore, simply considering the distinction between governance and government hardly captures the nuances explained above. Under the free-market regime, the Indian state intervenes in a variety of ways to ensure, smoothen, further, and protect the accumulation process, while also rescuing the system from the various crises arising from the inherent contradictions of the neoliberal order. In fact, to this end, the Indian state might even violate the same rules that it had previously rationalized and legitimized to curtail its own scope and relative size. Interestingly, even the proponents of neoliberal policies are critical of the potential state-business nexus that characterizes a state-interventionist regime, which results in increasing corruption and inefficiency, even though Transparency International’s Corruption Index of 2007 suggests otherwise (Moudud and Botchway 2008). According to the neoliberal mantra, the tendencies of crony capitalism should have been eliminated as reforms progressed. Instead, the period of market-oriented reforms in India has, at best, made the state-business nexus even more ambiguous (Chandrasekhar 2002).

4. Conclusion

The analysis conducted in this study offers a nuanced understanding of the role of the Indian state in the process of capitalist accumulation and economic growth in the country. A unique aspect of this study lies in the methodology deployed to assess the contribution and interventions of the Indian state during the free-market era. Moving beyond the typical binaries of market versus state and categories such as government versus governance, this article employs Marx’s conceptualization of the circuit of money capital to conduct its estimations. One major strength of the circuit approach is its capacity to accommodate both supply- and demand-side policy measures because, according to the Marxian perspective, the sustenance of the capitalist accumulation process, which persistently encounters various crises, is guided by the very spontaneity of the system. In this study, each part of the circuit is considered separately and the routes through which the state under capitalism can potentially affect the accumulation process are identified. Subsequently, utilizing both quantitative and qualitative information, discussions on the involvement and contribution of the Indian State are presented.

This study argues that although the standard neoclassical perspective opines that the role of the Indian state diminished substantially during the era of reforms, the arena and extent of its withdrawal (e.g., capital formation, employment generation, lowering fiscal deficit), the specific spheres in which it continues to contribute considerably (interventions after the global crisis, proactive role in urbanization and infrastructural progress, etc.), and some of its actions (e.g., explicit use of state machinery to ensure accumulation by dispossession or primitive accumulation and tax policies to strengthen oligarchs/big businesses) have become more relevant than before. Furthermore, this study argues that alongside the level of expenditure, the composition of expenditure is a crucial factor that must be considered when assessing the significance of the Indian state. Moreover, in this regard, the level of government also becomes important. This article also highlights that the fiscal policy stance of the government could alter over the free-market era. The period of analysis of this article ranges from 1980 to 2019, meaning that the post-2020 scenario was not analyzed. However, in the recent past, the Government of India has specifically moved in the direction of significant tax cuts while also trying to remain within the limits established by the FRBM Act. This implies an increase in inequality and downward pressure on developmental expenditure, both of which could be detrimental to the growth process. However, although this article identified the changing pattern and composition of spending, its scope could not accommodate an investigation into the specific consequences of different types of expenditure. Therefore, this aspect should be explored in future research.

To sum up, this study demonstrates that, in contrast to the neoclassical claims, the Indian state has actively intervened in the process of accumulation and economic growth through various routes, specifically through demand management (as discussed with the reference to the third phase of the circuit) and by contributing to distributional changes (as discussed with reference to the first two phases of the circuit). Furthermore, this study highlights that the Indian state has made explicit efforts to increase or maintain a threshold level of profits to aid the process of accumulation, irrespective of the ex post facto consequences of its policy measures.

Making the “pro-business” active hands of the state invisible has been one of the biggest hegemonic successes of neoliberal capitalism. Therefore, if we are to imagine an alternative regime, which seems pivotal in a post-COVID-19 world, we must reject the stylized version of the state-market binary so as to effectively comprehend and critically analyze the nuances of the state-capital nexus or the state-market synergy, especially in the context of developing countries such as India.

Footnotes

Appendix A

Table A2.

Changing Composition of Developmental Expenditure by States Governments.

	1980–1990	1991–2019	1991–1996	1997–2002	2003–2007	2008–2012	2013–2015	2016–2019
Economic services in developmental expenditure	54.63	48.28	52.62	46.69	50.48	45.74	46.34	46
Social services in developmental expenditure	45.37	51.72	47.37	53.31	49.52	54.26	53.66	54

Source: Based on data collected from the Reserve Bank of India.

Acknowledgements

The author extends his heartfelt gratitude to Vamsi Vakulabharanam of UMASS Amherst for his invaluable guidance and unwavering support throughout the course of this research. Sincere thanks are also extended to Rahul De of Azim Premji University, Bengaluru, India, for his comments on the preliminary draft. The author is deeply appreciative of the insightful comments and constructive feedback offered by the reviewers, which contributed significantly to the improvement of the overall quality of this manuscript. Any remaining errors are the sole responsibility of the author.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Saswata Guha Thakurata

1

See, e.g., Moudud and Botchway (2008) for a discussion on the conceptualization of the new developmental state in the post-global crisis context. Also, see for discussions on state intervention and the political economy of the ongoing decade.

2

Note that this study highlights the ex-ante efforts of the Indian state to promote capitalist accumulation and economic growth in India. The actual (ex-post) impact requires more careful causal analysis, which is not within the scope of the current exercise. Although this study did not detect the exact impact of the interventions, its objective was to highlight the ways in which the Indian state actively and consciously engages (ex-ante) in easing and promoting the process of accumulations and in addressing the problem of demand deficiency, especially during times of growth deceleration. Marx’s circuit offers a conceptual framework that accommodates both these possibilities, even though some of its basic assumptions are modified to achieve this. Further, this study resonates with some findings of but differs in terms of the objectives, periodization, coverage and deploys an entirely different methodological perspective.

3

As remarked by a former chief economist of the World Bank, Paul Romer, about the influence of plausible political manipulation on the calculation of the doing business index, due to which the relative ranking of different countries has become highly controversial. India’s recent ranking in this index too has generated discontent.

4

For example, the importance of the ease of doing business and its rationale are contextualized in this article with reference to the relationship between the state and accumulation using the concept of circuit of capital.

5

This consolidated number is mentioned in the report available at

6

This article was accessed from

7

This is noted in a report by Verma (2018), available at

8

Evidence from the developed world suggests that the profit accrued to private capital comes at the cost of losses incurred by the government, meaning the common people. For example, see the detailed report by Jonathan Owen ().

9

This is irrespective of the level of skill or education of the worker. In fact, with higher education or skill-based education becoming extremely expensive in recent times, individuals with a higher degree/greater technical skill are finding themselves more desperate for jobs. This desperation stems from the need not only to sustain their livelihoods but also, more often than not, to be able to repay the humongous education loans incurred to make themselves employable in the first place.

10

Table 4 presents the results of the growth/demand decomposition, where the contribution share and growth ratio of various relevant macro variables—private final consumption expenditure (PFCE), government final consumption expenditure (GFCE), gross capital formation (GCF), gross fixed capital formation (GFCF), exports (EXP), and imports (IMP)—are presented. Saluja (2017: 408) described PFCE as comprising the “consumption expenditure of households and non-profit institutions serving households (NPISH).” Meanwhile, he defined GCF as “the aggregate of gross addition to fixed assets and increase in inventories and valuables. Fixed assets comprise new construction, machinery, and equipment (including transport equipment and breeding stock, drought animals, dairy cattle, and the like)” (: 415).

11

The Indian Public Finance Statistics (: XIII) describes developmental expenditure as one that “broadly includes all items of expenditure that promote economic development and social welfare. They generally enlarge and improve the physical resources of the country, enhance knowledge, skills, and productivity of the people, and ensure efficiency of the system. Developmental expenditure broadly includes socioeconomic major heads given in budget excluding some non-plan expenditure like pension, social security. This is inclusive of grants to States and Union Territories. Expenditures other than Developmental expenditure, except Loans and Advances given by the Government, constitute Non-Developmental expenditure.”

Author Biography

Saswata Guha Thakurata (saswata.economics@gmail.com) is Assistant Professor of Economics at Kanchrapara College, affiliated with the University of Kalyani, India.

References

Adelman

Irma

. 2000. The role of government in economic development. In Foreign Aid and Development: Lessons Learnt and Directions for the Future, ed. Finn

Tarp

, 36–58. London: Routledge.

Adnan

Shapan

. 2014. Primitive accumulation and the “transition to capitalism” in neoliberal India. In Indian Capitalism in Development, eds. Barbara

Harriss-White

Heyer

Judith

, 23–45. London: Routledge.

Ahluwalia

Montek S

. 2002. Economic reforms in India since 1991: Has gradualism worked? Journal of Economic Perspectives 16 (3): 67–88.

Ahmad

Masroor

. 2014. Government expenditure and economic growth: An econometric test for India. International Journal of Social Science and Humanities Research 2 (3): 79–88.

Anand

Ishan

Azad

Rohit

. 2019. India’s slowdown: What it is and what can be done. Economic and Political Weekly 54 (41): 11–16.

Bal

Debi Prasad

Rath

Badri Narayan

. 2018. Do macroeconomic channels matter for examining relationship between public debt and economic growth in India? Journal of Quantitative Economics 16 (1): 121–42.

Basu

Deepankar

Das

Debarshi

. 2016. Profitability and investment: Evidence from India’s organized manufacturing sector. Metroeconomica 68 (1): 47–90.

Basu

Kaushik

Maertens

Annemie

. 2007. The pattern and causes of economic growth in India. Oxford Review of Economic Policy 23 (2): 143–67.

Basu

Pranab Kanti

. 2007. Political economy of land grab. Economic and Political Weekly 42 (14): 1281–87.

10.

Bauer

Peter Thomas

. 1981. Equality, the Third World, and Economic Delusion. London: Weidenfeld and Nicholson.

11.

Bhaduri

Amit

. 2009. The Face You Were Afraid to See: Essays on the Indian Economy. New Delhi: Penguin Books.

12.

Bhagwati

Jagdish

Panagariya

Arvind

. 2013. Why Growth Matters: How Economic Growth in India Reduced Poverty and the Lessons for Other Developing Countries. New York: Public Affairs.

13.

Bhattacharya

Rajesh

. 2022. Primitive accumulation: Concepts and debates. In Contemporary Readings in Marxism, ed. Ravi

Kumar

, 203–23. London: Routledge.

14.

Bhowmik

Sharit K.

2015. New bill on industrial relations: Protecting employers against workers and trade unions. Economic and Political Weekly 50 (29): 15–18.

15.

Bisht

Nidhi S.

2010. Trade unions in Indian IT industry? An employees’ perspective. Indian Journal of Industrial Relations 46 (2): 220–28.

16.

Bosworth

Barry

Collins

Susan M.

2008. Accounting for growth: Comparing India and China. Journal of Economic Perspectives 22 (1): 45–66.

17.

Boța-Avram

Cristina

. 2014. Good governance and doing business: Evidence from a cross-country survey. Transylvanian Review of Administrative Sciences 10 (41): 27–45.

18.

Chakraborty

Lekha S.

2002. Fiscal deficit and rate of interest: An econometric analysis of the deregulated financial regime. Economic and Political Weekly 37 (19): 1831–38.

19.

Chakraborty

Lekha S.

2016. Fiscal Consolidation, Budget Deficits, and the Macro Economy. New Delhi: Sage.

20.

Chandra

Pratyush

Basu

Dipankar

. 2007. Neoliberalism and primitive accumulation in India. Radical Notes February 7. Accessed at: https://radicalnotes.org/2007/02/07/neoliberalism-and-primitive-accumulation-in-india/.

21.

Chandra

Ramesh

. 2004. Government size and economic growth: An investigation of causality in India. Indian Economic Review 39 (2): 295–314.

22.

Chandrasekhar

C. P.

2002. Privatization and primitive accumulation. Frontline June 8. Accessed at: https://frontline.thehindu.com/columns/article30245162.ece.

23.

Chandrasekhar

C. P.

Ghosh

Jayati

. 2018. The banking conundrum: Non-performing assets and neoliberal reform. Economic and Political Weekly 53 (13): 129–37.

24.

Chang

Ha-Joon

. 2003. Kicking away the Ladder: Development Strategy in Historical Perspective. London: Anthem Press.

25.

Chowdhury

Subhanil

. 2014. Employment, growth, and inequality in India: A critical analysis. In Market, Regulations, and Finance: Global Meltdown and the Indian Economy, eds. Ratan

Khasnabis

Chakraborty

Indrani

, 141–68. New Delhi: Springer.

26.

Colclough

Christopher

Manor

James

, eds. 1991. States or Markets? Neo-liberalism and the Development Policy Debate. Oxford: Clarendon Press.

27.

Das

Keshab

Sagara

Hastimal

. 2017. State and the IT industry in India: An overview. Economic and Political Weekly 52 (41): 56–64.

28.

Das

Pranab Kumar

Kar

Saibal

. 2016. Public Expenditure, Demography, and Growth: Theory and Evidence from India. IZA Discussion Paper no. 9721. Bonn, Germany: IZA Institute of Labor Economics. Accessed at: https://www.iza.org/publications/dp/9721/public-expenditure-demography-and-growth-theory-and-evidence-from-india.

29.

Das

Shakuntala

. 2015. Growing informality, gender equality and the role of fiscal policy in the face of the current economic crisis: Evidence from the Indian economy. International Journal of Political Economy 44 (4): 277–95.

30.

Das Gupta

Chirashree

. 2010. Globalization, corporate legal liability, and big business houses in India. Cambridge Journal of Economics 34: 895–913.

31.

Das Gupta

Chirashree

2016. State and Capital in Independent India. New York: Cambridge University Press.

32.

Dasgupta

Zico

. 2012. Development expenditures of the states in the post-liberalization period. Economic and Political Weekly 47 (34): 64–73.

33.

Dasgupta

Zico

2022. Investment function and the role of export: The case of India’s manufacturing sector. Structural Change and Economic Dynamics 63: 79–90.

34.

D’Costa

Anthony P.

2017. A Point of No Return? Changing Structures and Jobless Growth in India. ESRC and GPID Working Paper no. 7. Swindon, UK: Economic and Social Research Council and Global Poverty and Inequality Dynamics Research Network. Accessed at: https://gpid.univie.ac.at/wp-content/uploads/2017/11/WP_7.pdf.

35.

Gangal

Vijay, L. N.

Gupta

Honey

. 2013. Public expenditure and economic growth: A case study of India. Global Journal of Management and Business Studies 3 (2): 191–96.

36.

Government of India. 2013. Indian Public Finance Statistics 2013. New Delhi: Ministry of Finance.

37.

Goyal

Ashima

Sharma

Bhavyaa

. 2015. Government Expenditure in India: Composition, Cyclicality, and Multipliers. IGIDR Working Paper no. wp-2015-032. Mumbai: Indira Gandhi Institute of Development Research. Accessed at: http://www.igidr.ac.in/pdf/publication/WP-2015-032.pdf.

38.

Goyal

Rajan

. 2004. Does higher fiscal deficit lead to rise in interest rates? An empirical investigation. Economic and Political Weekly 39 (21): 2128–33.

39.

Guha

Atulan

. 2007. Company size and effective tax rate: Study on Indian private manufacturing companies. Economic and Political Weekly 42 (20): 1869–74.

40.

Guha

Atulan

2009. Labor market flexibility: An empirical inquiry into neoliberal proposition. Economic and Political Weekly 44 (19): 45–52.

41.

Guha

Atulan

2013. Labor market flexibility in manufacturing. In Development on Trial: Shrinking Space for the Periphery, eds. Sunanda

Sen

Chakrabarti

Anjan

, 354–76. New Delhi: Orient Blackswan.

42.

Guha Thakurata

Saswata

Paramanik

Rajendra

. 2021. India’s recent slowdown and neoliberal regime of accumulation: Is there a link? In Neoliberalism in Emerging Economy of India: Political Economy of International Trade, Investment, and Finance, eds. Byasdeb

Dasgupta

Ghosh

Archita

Ghosh

Bisakha

, ch. 8, ebook ed. New Delhi: Routledge.

43.

Harvey

David

. 2004. The “new” imperialism: Accumulation by dispossession. Socialist Register 40: 63–87.

44.

Harvey

David

2013. A Companion to Marx’s Capital volume 2. London: Verso.

45.

Harvey

David

2014. Seventeen Contradictions and the End of Capitalism. Oxford: Oxford University Press.

46.

Heinrich

Michael

. 2013. An Introduction to the Three Volumes of Karl Marx’s Capital, trans. Alexander Locasio. Delhi: Aakar.

47.

Himanshu. 2018. India Inequality Report 2018: Widening Gaps. New Delhi: Oxfam India.

48.

Joseph

T. J.

2014. Changing role of the state: An analysis of economic intervention of the government of India after liberalization. Journal of South Asian Studies 2 (2): 115–129.

49.

Kalecki

Michał

. 1943. Political aspects of full employment. Political Quarterly 14 (4): 322–30.

50.

Kannan

K. P.

Raveendran

2019. From jobless to job-loss growth: Gainers and losers during 2012-18. Economic and Political Weekly 54 (44): 38–44.

51.

Kapur

Devesh

Vaishnav

Milan

, eds. 2018. Costs of Democracy: Political Finance in India. New Delhi: Oxford University Press.

52.

Karagiannis

Nikolaos

King

John E.

, eds. 2019. A Modern Guide to State Intervention: Economic Policies for Growth and Sustainability. Northampton, MA: Edward Elgar.

53.

Kiely

Rhian

. 1998. Neoliberalism revised? A critical account of World Bank concepts of good governance and market friendly intervention. International Journal of Health Services 28 (4): 683–702.

54.

Kohli

Atul

. 2006. Politics of economic growth in India, 1980–2005. Economic and Political Weekly 41 (14): 1251–59.

55.

Lal

Deepak

. 1983. The Poverty of Development Economics. London: Institute of Economic Affairs.

56.

Levien

Michael

. 2011. Special economic zones and accumulation by dispossession in India. Journal of Agrarian Change 11 (4): 454–83.

57.

Levien

Michael

2012. The land question: Special economic zones and the political economy of dispossession in India. Journal of Peasant Studies 39 (3–4): 933–69.

58.

Levi-Faur

David

. 2012. From “big government” to “big governance”? In The Oxford Handbook of Governance, ed. David Levi-Faur

David

, 3–18. Oxford: Oxford University Press.

59.

Little

Ian M. D.

1982. Economic Development: Theory, Policy, and International Relations. New York: Basic Books.

60.

Majumdar

Shyamal

. 2008. Workforce Development in India: Policies and Practices. Tokyo: Asian Development Bank Institute.

61.

Mazzucato

Mariana

. 2014. The Entrepreneurial State: Debunking Public vs. Private Sector Myths. London: Anthem.

62.

McCartney

Matthew

. 2011. India: The Political Economy of Growth, Stagnation, and the State, 1951–2007. Oxon, UK: Routledge.

63.

McChesney

Robert W.

2001. Global media, neoliberalism, and imperialism. Monthly Review 50 (10): 1–19.

64.

Mehra

Puja

. 2019. The Lost Decade (2008–18): How India’s Growth Story Devolved into Growth without a Story. Gurgaon, Haryana: Ebury Press by Penguin Random House India.

65.

Mohanty

Asit

Patra

Suresh Kumar

Kumar

Satyendra

Mohanty

Avipsa

. 2016. An empirical analysis of effect of public debt on economic growth in India in the post-reform era. Asian Economic and Financial Review 6 (11): 692–705.

66.

Mohapatra

Geetilaxmi

Giri

A. K.

2016. The composition of public expenditure and economic growth in India: Evidence from autoregressive distributed lag approach. Journal of Economic Research 21 (2): 205–30.

67.

Moudud

Jamee K.

Botchway

Karl

. 2008. The search for a new developmental state. International Journal of Political Economy 37 (3): 5–26.

68.

Mukherjee Reed

Ananya

. 2001. Perspectives on the Indian Corporate Economy: Exploring the Paradox of Profits. New York: Palgrave.

69.

Nagaraj

2010. India’s economic development. In Routledge Handbook of Indian Politics, eds. Atul

Kohli

Singh

Prerna

, 189–203. London: Routledge.

70.

Nagaraj

2017. Public sector employment: What has changed? In Political Economy of Contemporary India, eds. R

Nagaraj

Motiram

Sripad

, 157–78. Cambridge: Cambridge University Press.

71.

National Science and Technology Management Information System. 2017. Research and Development Statistics at a Glance. New Delhi: Department of Science and Technology. Accessed at: http://nstmis-dst.org/Pdfs/Statistics-Glance-2017-18.pdf.

72.

Owen

Jonathan

. 2015. Crippling PFI deals leave Britain £222bn in debt. Independent April 12. Accessed at: https://www.independent.co.uk/money/loans-credit/crippling-pfi-deals-leave-britain-222bn-in-debt-10170214.html.

73.

Panagariya

Arvind

. 2004. Growth and reforms during 1980s and 1990s. Economic and Political Weekly 39 (25): 2581–94.

74.

Panagariya

Arvind

. 2008. India: The Emerging Giant. New York: Oxford University Press.

75.

Patnaik

Prabhat

. 2009. A Perspective on the Growth Process in India and China. IDEAs Working Paper no. 05/2009. Oxford, UK: International Development Economics Associates. Accessed at: http://www.networkideas.org/working/jun2009/05_2009.pdf.

76.

Prasad

Rohit

Gupta

Gaurav

. 2019. Top 12 corporate NPAs cost exchequer twice as much as farm loan waivers. IndiaSpend February 18. Accessed at: https://www.indiaspend.com/top-12-corporate-npas-cost-exchequer-twice-as-much-as-farm-loan-waivers/

77.

Ramu

M. R.

K. Gayithri

Anantha

. 2016. Relationship between Fiscal Deficit Composition and Economic Growth in India: A Time Series Econometric Analysis. ISEC Working Paper no. 367. Bangalore: Institute for Social and Economic Change. Accessed at: https://ideas.repec.org/p/sch/wpaper/367.html.

78.

Rani

Ritu

Kumar

Naresh

. 2017. Does fiscal deficit affect interest rate in India? An empirical investigation. Jindal Journal of Business Research 5 (2): 87–103.

79.

Reinert

Erik S.

1999. The role of the state in economic growth. Journal of Economic Studies 26 (4/5): 268–326.

80.

Saluja

M. R.

2017. Measuring India. New Delhi: Oxford University Press.

81.

Sanyal

Kalyan

. 2014. Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post-colonial Capitalism. New Delhi: Routledge.

82.

Sanyal

Kalyan

Bhattacharya

Rajesh

. 2010. Beyond the factory: Globalization, informalization of production, and the changing locations of labour. In Globalization and Labour in China and India, eds. Paul

Bowles

Harriss

John

, 151–69. International Political Economy Series. London: Palgrave Macmillan.

83.

Seshaiah

S. V.

Reddy

T. Koti

Sarma

I. R. S.

2018. General government expenditure and economic growth in India: 1980–81 to 2015–16. Theoretical Economics Letters 8 (4): 728–40.

84.

Sharma

Akhilesh K.

Saluja

M. R.

Sarma

Atul

. 2016. Macroeconomic impact of social protection programmes in India. Economic and Political Weekly 51 (24): 121–26.

85.

Sindhu

Shilpa

Khatkar

Sahil

Panghal

Anupama

. 2016. Fiscal federalism and states’ economic growth in India: An analytical study. Indian Journal of Science and Technology 9 (48): 1–7.

86.

Srinivasan

Palamalai

. 2013. Causality between public expenditure and economic growth: The Indian case. International Journal of Economics and Management 7 (2): 335–47.

87.

Srinivasan

T. N.

Tendulkar

Suresh D.

2003. Reintegrating India with the World Economy. Washington, DC: Institute for International Economics.

88.

Sundar

K. R. Shyam

Sapkal

Rahul Suresh

. 2017. Labor law, governance reforms, and protests: Are they legitimate? Economic and Political Weekly 52 (38): 59–66.

89.

Tejani

Sheba

. 2015. Jobless growth in India: An investigation. Cambridge Journal of Economics 40 (3): 843–70.

90.

Tulsidharan

Sajitkumar

. 2006. Government expenditure and economic growth in India (1960 to 2000). Finance India 20 (1): 169–79.

91.

Vakulabharanam

Vamsicharan

. 2014. Economic turbulence in capitalism: Twentieth century and beyond. In Marxism: With and Beyond Marx, eds. Amiya

Bagchi

Chatterjee

Amita

, 115–35. New York: Taylor and Francis.

92.

Venkataraman

Subramanya

Urmi

Arabi

. 2017. The impact of taxation on economic growth in India: A disaggregated approach using the ARDL bounds test to co-integration. International Journal of Accounting and Economics Studies 5 (1): 19–21.

93.

Zhang

Tao

Zou

Heng-fu

. 2001. The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India. China Economic Review 12 (1): 58–81.