How Capitalism Works in India?

Arup Kumar Sen

In the theoretical reading of the development of capitalism, some universal parameters like dominance of market forces in the determination of value and withdrawal of the State from public welfare are emphasized. But, capitalism takes specific forms in a particular social formation.

Post-colonial India started its journey with the co-existence of the private and public sectors and the promise of delivering justice to the people with a liberal Constitution. However, the vast infrastructure built by the public sector undertakings facilitated the growth of Indian capitalism with State patronage. This genesis of capitalism served the Indian middle class by creating job opportunities in the “formal sector” enterprises and institutions. On the other hand, a large number of people belonging to the subaltern classes, particularly adivasis and dalits, were left outside the developmental agenda of the State and many of them were displaced from their habitats and livelihoods by the “development” projects of the Indian State. In one estimate, the “development” projects displaced about 60 million people in the first 50 years after independence in India (1947-2000).

India started following the neo-liberal path of capitalism with the support of international financial institutions from the 1980s, which got strengthened over the years. The most important element of this paradigm of capitalism is growing casualization of the workforce, including those engaged in State enterprises, and increasing participation of migrant/contract labour in capital accumulation. The vast number of footloose people displaced by “development” became the dominant workforce of the neo-liberal process of capital accumulation.

What is unique in the present moment of capital accumulation in India is that the State is directly facilitating the process of Accumulation of Capital through its anti-labour and anti-farmer laws. The political dimension of this paradigm of capitalism is unmaking of the constitutional/human rights of a large number of people, particularly those belonging to the minority/Muslim communities. The neo-liberal path of “development” and majoritarian Hindutva politics are the two pillars of neo-liberal capitalism developing in contemporary India.  Understanding this language of Capital is important for imagining the language of resistance against it.

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Jan 30, 2021