Growth and Development and State Role
State actors are able to govern and manage sustainably if they engage the society in a constructive way. Therefore, they should work proactively with both the civil society and the private sectors. The objective is to shape the space for interactions in order for the state, businesses, and society to perform together in making decisions on their growth and development. Against the above backdrop, enhancing political involvement is a critical aspect in the pursuit of development. The paper posits that India has failed to optimise growth and development to a large extent because of its incompetence to tap into the constructive role played by the state, as Dreze and Sen (2011) observed.
Constructive State Role
Involvement in development is a multifaceted process. Improving political involvement outsteps the strengthening of the private sector and civil society to include taking a proactive approach in designing development programmes (Alamgir 2008). The major goal is to promote constructive relations between society and the state in an effort to grow and develop the country. In order to achieve such objectives, it is essential to build and consolidate both legal and institutional arrangements with the intention of institutionalising democratic processes (Alamgir 2008). In this regard, securing support from both federal and regional/state governments is critical. The different tiers of governance are expected to establish legal frameworks that facilitate and protect societal participation in developmental activities.
Laws are important in enhancing the constructive role of the state. The enshrinement of necessary rules and regulations establishing involvement mechanisms to improve popular participation essentially contributes to enhanced outcomes (Bernardi & Fraschini 2005). Assisting civil society in revealing and presenting its interests is a way of empowering the people. Otherwise speaking, for civil society, a role to play contributes to promoting active political participation.
A constructive approach is mutually advantageous. The state and society are in a position to benefit from constructive relations if the former is responsive to the needs raised by the civil society through political involvement in weighty matters of national importance (Tirthankar 2006). Based on the aforementioned assertion, it is essential for the state to improve its capacity. Moreover, this action would contribute to the detection of the democratic consciousness among governmental actors such as legislature and other democratic bodies.
The expansion of the political space is critical in raising the legitimacy of the state. In addition, the level of accountability is enhanced since political players and public administrators are seen to be making transparent decisions as they operate within known checks and balances (Bahl et al. 2005). In such a country, it is possible to institute the measures necessary to curtail corruption and other malpractices that undermine development. More precisely, within a constructive framework, it is difficult for the state officers to abuse power arbitrarily. When facing complex challenges, context-specific remedies are required. In other words, no blueprint exists that can ensure political involvement. The implication is that different political or social circumstances demand dissimilar approaches.
Promoting political involvement is accompanied by many challenges as well as risks. For instance, divided or inadequate commitment is a hindrance (Centre for Media Studies 2005). In worse case, the lack of political will to improve governmental participation undermines the development significantly. In such circumstances, empty talk characterises public debate resulting in insignificant changes in engagement among leading parties in the political development process. Giving vague promises often yields inadequate results (Goodman & Loh 2011). In addition, in such an environment, the possibility of undermining gains already made remains possible.
In a bid to improve involvement, it is advisable to take measures that limit undermining the existing democratic structures. In practice, coming up with parallel structures is one of the ways that disrupt development (Michelutti 2004). In other cases, powerful and dominant interest groups play a role that thwarts efforts by the disadvantaged groups of people from gaining participation. Caution must also be exercised to overcome the threat of the state suffocating the civil society by controlling funding. In practice, the civil society is dependent on external sources of resources. Consequently, the state can muscle their influence by interfering with the funding that they receive.
From the discussion on the constructive role of government, it is obvious that governments should embrace accountability and transparency. In the absence of conditions, structures, or political will to enhance accountability, room for participation in economic and other forms of administrative malpractices such as corruption exists which ultimately undermines growth and development.
Neoliberalism and Development
The emergence of neoliberalism coincided with the decline in the principles that underpin the establishment of welfare states following the Second World War. Thereafter, the onset of globalisation fatally reduced the role of the state in regulating economies (Ghosh 2005). Following the changes, statism gave way to market forces even on the determination of social welfare matters.
At the time neoliberals gained dominance, the focus of many countries was on the fiscal debt resulting in the former to support free markets. In such arrangements, states would play a limited role in markets (Corbridge & Harriss 2000). Consequently, neoliberalism and state expenditure were viewed as mutually exclusive. However, in India, the existence and broadening of the welfare state contrasted the popular perception fronted by neoliberalism (Corbridge & Harriss 2000). Thus, it is not surprising that India is a peculiar case that encouraged state interventionism when other governments focused on expenditure reduction globally.
Based on the above revelation, it should be noted that while the world was reducing the size of the state, India did not make the similar changes. In a welfare state, many functions are soldiered by the government (Michelutti 2004). In such a country, space for adequate political involvement is limited, and governance malpractices are common. Therefore, it is arguable that the slow pace in adopting changes as it was in other parts of the world allowed India to operate the extended government that was not supportive of growth and development. In other words, the inadequacies of the welfare state played a role towards the decline in the Indian state’s development. Moreover, under a welfare state, the rights of citizens do not occupy a prominent position. Despite the enforceability of rights, India has not implemented them as expected (Corbridge, Harriss & Jeffrey 2012b). Under the Constitution of the country, the citizens are entitled to education, food, and employment (Corbridge, Harriss & Jeffrey 2012b). Although the nation managed to move away from socialism, the India remains a developmentalist and interventionist state.
Welfare State: India Today
As a country, India is largely integrated into the world economy. Based on 2011 statistics, the state’s international trade accounted for 25% of its Gross Domestic Product (Corbridge, Harriss & Jeffrey 2012b). In addition, it remains a top attraction of Foreign Direct Investment. However, despite opening its borders to trade, the state remains fairly welfare-oriented. Owing to the position that the country pursues, it is observed that India acknowledges that growth and development do not necessarily contribute to improved living standards. Based on the idea that growth and development do not translate into welfare improvement, it is not surprising that India has many programmes to serve wellness objectives (Kritsonis 2015). For instance, economic participation programmes targeting areas such as employment, education, micro credit, and healthcare facilities are common.
The relevance of the above angle towards development is debatable. Creating employment, education, or health programmes is a positive step. The position is supported by the notion that such facilities help individuals to access services easily. However, the same approach is criticised for encouraging laziness as people do not work hard to earn the services offered (Ruddar & Sundharam 2009). In addition, by spending large amounts of money on such facilities, the state is denied the opportunity to expand other forms of infrastructural development that are essential for economic expansion. According to Ruddar and Sundharam (2009), covering social needs of the population increases the size of the government. Big governments are less efficient and often result in corruption and economic stagnation.
Both neoliberalism and globalisation have weaknesses. They possess unwarranted concentration on the accumulation of wealth disregarding the distribution (Kumar 2005). It contrasts with free markets that facilitate the distribution of wealth. However, the state has a role to act as a reserve against the world economic pressures. Given the reaction from India, it is discerned that the country has strong democratic institutions. Thus, the globalisation trend has resulted in the exacerbation of social and economic polarisation. Nevertheless, the process has not totally constrained the independence of the state in reference to developing counter-measures when addressing poverty and the widening income inequalities in the country (Kumar, Tapan & Irfan 2005). In other words, the state has not come under a heavy threat pertaining to its welfare orientation. Since the independence of India in 1947, attempts to realise economic stability have often suffered setbacks. In 1947, the Indian economy was overcoming the adverse effects of the Second World War. In addition, the country was handling the aftermath of the Indo-Pakistan partition. Thus, the independence government had to act effectively in order to stabilise the economy.
Socialism, Capitalism, and Free Market
Following the aforementioned crises, the country’s economy shifted from a social system to a capitalist orientation. Thus, during the 1950s, the nationalization of mining, steel, electricity generation, insurance, and other industries followed (Ramachandra 2007). However, after the introduction of the Industries Act of 1951, the country encountered economic stagnation (Ruddar & Sundharam 2009). Domestic production fell as innovation equally fell. The emergence of high tariffs as well as taxes undermined the economy’s foreign investments. The good intention of the leadership to encourage self-sufficiency and support small-scale local production was inadequate to support the economy. In 1991, the Indian economy began shifting towards capitalism though the shift was involuntary (Ruddar & Sundharam 2009). In 1973, the economy stagnated because of severe budget deficits that resulted in a big foreign exchange crisis. The development pushed the country to a position in which it was difficult to finance imports.
In the midst of the crisis, a new government came into power. Following the change in leadership, the process of globalization was ushered into the Indian Territory (Ruddar & Sundharam 2009). The shift was also accompanied by liberalism and privatization, which allowed for an increase in Direct Foreign Investment. In the new era, information technology played a key role in economic growth (Tirthankar 2006). Having managed to reduce the level of inflation, Indian companies could borrow funds from outside markets. At the same time, literacy levels increased accompanied by higher levels of entrepreneurship. Thereafter, after instituting the above measures, India approximated to a free market, and the state’s growth levels rose and stabilized at 8% (Tirthankar 2006). Thus, it was obvious that foreign investors began investing in the country heavily. Regardless of such progress, the country remained in the process of developing into a completely free market economy.
The bureaucracy and post-liberalism could not match the changing times. Therefore, the prevailing structure contributed to the rise of bottlenecks that hindered growth and development. For instance, poverty has remained a challenge in the country. The effect of the LPG framework has been to give the population hope (Tirthankar 2006). However, post-liberalism has witnessed the expansion of gross inequalities. In particular, when one side of India develops, another regresses. Thus, the prevailing system has not facilitated equitable development. The free market arrangement has conceded the dominance of city life in India even across rural areas. However, rural India still lacks key infrastructural facilities necessary to spur economic growth and development (Tirthankar 2006). The shift towards a free-market economy has allowed for some form of development although concerns persist about the long-term effects on the economy.
Employment is one of the concerns that influence economies. The failure of India to assume a constructive role has contributed to poor performance regarding employment/ unemployment. As recent as 2009 – 2010, the agriculture-based sector accounted for over fifty percent of employment in the country (Ruparelia et al. 2011). According to Khilnani (1998), unemployment in India is at chronic levels due to the dominance of the disguised feature of unemployment. Government schemes focused on reducing unemployment and poverty has facilitated the migration of poor people from the rural to urban areas in search for jobs. Hence, the attempt by the state to provide funds to the youth in order to set up businesses has not solved the unemployment issue.
The falling level of organised employment is largely attributable to the reduction in the size of government. In other words, the encouragement of privatisation and the exit of government from playing some economic roles have contributed to the state of affairs. In addition, increased measures to allow for liberalisation continues to lessen the role played by the state towards the improvement of the economy (Tirthankar 2006). In the above case, the shift towards a free market economy seems not to help the state to play a constructive role that is necessary to enhance the growth and development since the exit of government from some areas of the economy is undermining employment.
Apart from unemployment, corruption is another issue of concern which has remained one of the biggest challenges facing India (Ruparelia et al. 2011). Given that many citizens believe that corruption is a problem in India, fighting the ill is difficult. Whereas in the past, bureaucratic inefficiencies such as red tape supported the institutionalization of corruption, many state approvals as well as regulations and monopolies contribute to the problem presently. The process is not transparent thus allowing for a window for corruption. The government has however made efforts to resolve the problem, which shows that the government has in some cases managed to establish constructive role in a bid to promote development. For instance, the state introduced the Right to Information Act in 2005 to improve transparency since government offices are required to provide any information that is viewed as public (Ruparelia et al. 2011). In addition, the computerisation of public services has contributed to controlling corruption.
The question of whether a free market economy is the antidote to corruption is debatable. In a free market economy, state participation is limited to a regulatory role; therefore, it is not expected to provide services or goods (Kumar, Tapan & Irfan 2005). However, such an expectation cannot be made since the state provides some essential activities. Nevertheless, it is often anticipated that the exit of the state from many market activities allows for healthy competition thus facilitating positive development (Dess et al. 2010). The allegation is however questionable since the existence of market imperfections has the potential of undermining development. For development to take place, the environment must be supportive of economic undertakings by taping into its constructive role. The governments has put in place measures that create such conditions. However, given the endemic levels of corruption, it seems the state has failed leading to underdevelopment and poverty. Examining the education sector emphasises the constructive role of the state. India has progressed in education by increasing the attendance rate in primary education; thus, the levels of literacy have expanded significantly (Panagariya 2008). In the country, the attainment of elementary education is a fundamental right that is protected by legislation. Despite the advances made, India still lags behind the world average on literacy. Accounting for up to 37% of global illiteracy, India lags behind countries of similar status in terms of educational advancement (Panagariya 2008). Despite the abysmal performance, the country has resisted neoliberalism that has targeted the commercialisation of education. In other words, market forces do not influence the delivery of educational services or expansion in the sector. For instance, it is evident that the privatisation of education is a global occurrence. Contrary to the rest of the world, India has embraced the de-commodification of education. In particular, the Education Act provides free elementary education to children aged between 6 and 14. In practice, education is viewed as a tool that facilitates socioeconomic progress among vulnerable sections in societies. India is among the few nations that perceive education to be a fundamental right, and the expansion of state-based education goes beyond schooling (Corbridge, Harriss & Jeffrey 2012a). For instance, since independence, the state has subsidised university education. The provision of such services aligns with the view that the state reached some results in establishing its constructive role in development.
The rich-poor gap is an indicator of development. The wider the gap shows unequal development while a smaller one indicates equal advancement. In India, the gap between the rich and the poor is big (Tapan & Irfan 2004). The difference is also manifested across the different states of India. The variations are obvious due to infrastructural development and availability of socioeconomic opportunities for people. Unsurprisingly, poor states such as Assam and Chhattisgarh account for higher populations than rich ones (Tapan & Irfan 2004). Thus, living conditions, life expectancy, literacy rates, and income differences are common in India. This is another case that shows the government’s failure to tap into its constructive role to develop the country.
During the pre-liberal era, the government in its constructive role as the state attempted to reduce the gap by supporting industrial growth in rural areas and delocalising firms. Despite the efforts, the results were negative since the move led to inefficiencies (Tirthankar 2006). Moreover, after the liberalization of the economy, advanced states continued to expand while the poor ones continued becoming poorer. Therefore, it is evident that the government failed to create the necessary conditions for the growth and development of the country.
India is a large economy globally. However, the level of development in the country is compromised by various imperfections. For instance, wealth distribution disparities are problematic. The state has failed to use its power to ensure equitable development as stats in the country depict disparities. Despite refusing to take liberal approaches of development early on, the focus on welfare has not brought the growth of the country. Thus, the paper finds evidence in support of Dreze and Sen (2011) that India has failed to maximize growth and development largely because of its inability to tap into the constructive role of the state.