State and Redistributive Development in India

States in the developing world play an essential role in moulding patterns of development. The Indian state is no exception. Over time, the state in India has shifted from a reluctant pro-capitalist state with a socialist ideology to an enthusiastic pro-capitalist state with some commitment to inclusive growth. This shift has significant implications for the possibility of development with redistribution in India. On the one hand, state’s warm embrace of capital has been accompanied by higher rates of economic growth. Since the levels of inequality in India are not enormously skewed, say, in comparison to Latin America, the recent growth acceleration is bound to be poverty reducing. Moreover, growth boosts public revenues that, in principle, could be channelled to the poor. On the other hand, however, the state-capital alliance for growth is leading to widening inequalities along a variety of dimensions: city vs the countryside; across regions; and along class lines, especially within cities. Not only does rapid economic growth then not benefit as many of the poor as it could if inequalities were stable, but the balance of class power within India is shifting decisively towards business and other property-owning classes. This creates the possibility of an even more unequal development in the future. An important question then arises: can democracy and activism of the poor modify this dominant pattern of development?