Eswaran Sridharan

The Growth and Sectoral Composition of India's Middle Class: Its Impact on the Politics of Economic Liberalization

This essay analyzes the growth of the middle classes in India since 1980, focusing on the period of economic liberalization since 1991. Its objective is to understand how the emergence of this class – and the nature of its composition – has affected the process of economic liberalization in India. Conventional wisdom holds that the growth of the middle class since the early 1980s is related to the increase in economic growth rates during this period. Since 1980, annual GDP growth has averaged more than 5%, compared to 3.5% during the 1950–80 period. The middle class has grown to somewhere between 100 and 250 million, with the exact number depending on the criteria used. The emergence of this middle class has changed India’s class structure from one characterized by a sharp contrast between a small elite and a large impoverished mass, to one with a substantial intermediate class. The elite–mass class cleavage tended to support a broadly socialistic ideology, while the elite–middle–mass differentiation has created a broader base for capitalism – hence the increased support for economic liberalization. Much of the debate has focused on the size of the middle class – whether it is, say, 50 million or 150 million or 250 million – and the criteria to be used in drawing boundaries. This article focuses on the politically far more relevant criterion of the sectoral and occupational composition of the middle class – in particular, whether it is largely in the broadly defined public sector, the (entirely private) agricultural sector, or the non-agricultural private sector. I argue that the orientation of the middle class toward economic liberalization – especially toward “second generation” reforms involving privatization, reducing

Behind Modi's Victory

Abstract:This article analyses the victory of the Bharatiya Janata Party in India’s 2014 election. It focuses on possible reasons for the pro-BJP swing, looking at turnout, regional concentration of BJP votes, voting patterns of key social segments, the Modi factor, and the campaign, against the backdrop of a slowing economy, inflation, and corruption. It concludes that the BJP swing was not so much a vote for Hindu nationalism as for the promise of effective leadership for growth and jobs that struck a chord with the electorate’s rising expectations, and that it is too early to pronounce a fundamental shift of party system.

Evolving Towards Innovation? The Recent Evolution and Future Trajectory of the Indian Software Industry

This chapter reviews the evolution of the Indian software industry over the past decade, addressing the issue of whether it can graduate to technologically more complex and higher value-added projects, software products and integrated hardware — software products and systems. It has been argued that while the Indian software industry has been a success story of exports based on exploiting the labour cost differential between India and the US for fairly low value-added software services, it will need to innovate to move up the value chain if it is to sustain and enhance its competitive position in the coming years. Why the focus on innovation? What is critical to any overall effort to compete successfully and sustainably in world markets, which includes modernizing and making the best use of the installed capacities in industry and infrastructure, is the capacity for, and quality of, innovation. To get to grips with what is happening on innovation in the Indian software industry, the literature on innovation offers several approaches to the issue of the context of innovation in India in the IT industry. A useful starting point, theoretically, for a study of the context of innovation in such a case, would be a broad Schumpeterian definition of innovation as consisting not only of new products and processes, but also of new materials, new markets and new forms of organization.

Coalition strategies and the BJP's expansion, 1989–2004

This paper analyses the expansion of the Bharatiya Janata Party (BJP) across Indias states from 1989 to 2004 through its strategy of coalition-building. The paper shows that the BJP leveraged its perceived pivotality as a third party in several states to form state-level electoral coalitions on progressively better terms with state-level first or second parties, so to be able to expand across states, exploiting the incentives facing parties at the state level in Indias electoral system.

Why are multi-party minority governments viable in India? Theory and comparison

This paper attempts to explain the apparently exceptional pattern of coalition politics in India compared to international patterns – the prevalence of minority governments and among them, minority coalitions, among non-single party majority governments, as well as the predominance of very large coalitions of 6–12 parties – in the light of theorising on coalition and minority governments and the specificities of Indias political institutions. It shows that there are two general and three specific circumstances that favour such a pattern and that most of these have been present at government formation since 1989, and particularly since 1996.

Toward state funding of elections in india? a comparative perspective on possible options

This paper explores the issue of introduction of state funding of elections in India, focussing on the incentive structures of electoral finance reforms. After summarising the main points in the history of political finance reform in other democracies, and in India, the historical pattern of fund-raising and election expenditures of major parties in India is surveyed. Six electoral finance reform options for India are outlined. It is argued that the time is now ripe for state funding of elections from the point of view of the incentives facing parties and donors.

Improving Indo-Pakistan relations: international relations theory, nuclear deterrence and possibilities for economic cooperation

Abstract The India–Pakistan relationship, after the overt nuclearisation in May 1998, the Kargil Conflict of 1999, the border mobilisation of 2002 and the continuing insurgency in Kashmir, remains tense. This paper explores the possibility of economic cooperation—including both trade and common infrastructure projects—taking place and spilling over into security cooperation. It analyses why past economic cooperation was so minimal, and why the only major agreement, that on the Indus basin waters, did not lead to deeper economic or security cooperation. Viewing the India–Pakistan relationship through the concepts of cumulative relative gains sensitivity, trade expectations and common projects, drawn from recent international relations theory literature, the paper argues that economic cooperation between the two depends on either prior security cooperation or, as a substitute, de facto deterrence. Nuclear deterrence now being a reality, the paper argues that, contrary to what may appear to be the case on the surface, the cumulative relative gains sensitivity of both sides, especially Pakistan, can now be reduced to enable economic cooperation that has the potential to create positive security spillovers.

Conclusion: Global Links, Domestic Market and Policy for Development

The Indian software industry has come a long way from its humble beginnings in the 1980s. The industry has grown at an impressive rate over the past decade and has in aggregate, and for its major companies, attained brand name recognition in selected software service niches. Its export-driven model now commands the world’s attention for skilled professionals and offers hope to many developing countries which are struggling to cope with a hyper-competitive post-WTO global economy. Yet, there is a broad consensus among the contributors to this volume that the Indian software industry is overwhelmingly concentrated in software services and, more recently, in low-tech IT-enabled services. In this concluding chapter we reiterate some of the principal challenges facing the industry and suggest broad policies that will enable the Indian industry to take the high road to innovation. There are two complementary strategies that reinforce each other: tapping the advantages offered by the global economy to develop national technological capability and serving the domestic market to diversify the foundations of the software industry. Both are likely to contribute to a stronger innovative capability. Based on this understanding, we also lay out some likely scenarios for the Indian industry in the next few years.

Can umbrella parties survive? The decline of the Indian National Congress

This paper analyses the defeat of the Congress party in the India’s 2014 election in which it plummeted to its lowest ever vote share (19 per cent) and seat tally (44 of 543). We argue that the defeat is the end result of a gradual decline punctuated by recoveries that began much earlier. We show that the Congress was gradually becoming less competitive in more and more states and constituencies as indicated by its falling to third position or worse. We try to relate this to the desertion of the party by social groups that once supported it in a number of states and other factors. The larger question is whether a Congress-type, encompassing, umbrella party can survive the sharpened politicisation of social cleavages, in the Indian case, religious, caste and regional cleavages since such a party will tend to lose out to parties based on religious, caste and regional identities in identitarian outbidding.

Incumbency, internal processes and renomination in Indian parties

This paper analyses a critical aspect of the internal functioning of five major Indian political parties, namely the nomination of candidates for parliamentary elections, focusing on the pattern of renomination of former candidates and incumbents. The data are analysed against the literature on the structure and functioning of Indian parties, and interview material on the process of nomination in the 2009 and 2004 elections. From the perspective of a six-fold typology of centralisation of nomination processes drawn from the comparative literature, it is found that all the parties analysed are in either the second-most centralised, or even most centralised categories, and that for the three major national parties, Congress, Bharatiya Janata Party and Communist Party of India (Marxist), past performance plays a role in nominations, the majority of incumbents being renominated in the post-1989 period.