South Asia in World Affairs Series. Washington, DC: Georgetown University Press, 2014. xvi, 299 pp. (Tables.) US$69.50 cloth. ISBN 978-1-62616-107-8.
Baldev Raj Nayar has written an account of globalization and economic integration in India which steers a middle course between the Scylla of economic boosterism—the brakes came off the economy in 1991 and a tiger was uncaged—and the Charybdis of anti-globalist pessimism—a discourse wherein overwhelming global forces are made the mainspring of an erosion of state capacity and social cohesion in modern India, not to mention of rising inequalities between social groups and across the Indian space economy. Nayar is clear that economic growth has been stimulated by what he calls “economic liberalization” in post-1991 India. In this respect he lines up closely with commentators like Arvind Panagariya and Jagdish Bhagwati. At the same time, Nayar accepts that economic growth has brought with it widening income inequalities, at least in the short run. Importantly, though, Nayar insists that the national economy in India has not been segmented or excessively dislocated by economic liberalization. Rather, there has been significant consolidation of markets and improved linkages across the space economy as a result of new infrastructural developments and trade and investment flows.
Thus described, Nayar’s book takes its place as a very fine and sensible addition to the vast middle ground of studies of globalization in India, and indeed of globalization more generally. The idea that globalization is wholly new or one-directional was disposed of many years ago by critics including Paul Hirst and Grahame Thompson. Where Nayar’s book adds significant value to these stylized debates is by means of his core empirical chapters. Having set the scene and reviewed the literature in chapter 1, Nayar completes the first section of his book with an overview of the state of India’s economy and economic policy making up to 1991. The second and third parts of the book then deal with “the state after economic liberalization” and the “market after economic liberalization.” Under the first heading, Nayar deals incisively with issues of fiscal federalism and the slow process of indirect tax reform in India. These are excellent chapters. Under the second heading, Nayar addresses the integration/disintegration dialectic by means of an extended consideration of trade and investment policies, migration, and the rise of a pan-Indian class of capitalists. Again, this is very well done. Statistics are well marshalled and the narrative accounts are consistently well told.
For all its considerable strengths, Nayar’s account of globalization and economic integration in India also has several weaknesses—as is perhaps inevitable when the canvas is so large. First, the account offered here largely treats as unproblematic the idea of 1991 as some kind of Year Zero in India—the year when economic autarky was put to bed and economic reason was unleashed in its place. All the evidence suggests, however, that the Indian economy was turned around a full decade earlier, even if some of the growth in the second half of the 1980s was heavily debt-financed and unsustainable (as was revealed in the 1991 balance of payments crisis). Second, and relatedly, much of the growth that could be observed in the Indian economy in the 1980s, and indeed subsequently, was driven far more by pro-business reforms (favouring incumbents) than by reforms that were more openly pro-market. Atul Kohli has made this argument as well as anyone and I was surprised his work was not engaged with more closely by Nayar. The particular forms of globalization in India have been significantly affected by this underlying political settlement. Third, again relatedly, precisely because globalization in India has been so partial at the level of the productive economy—consider the absence of Thatcher-style privatizations and the very slow reform of the power sector—the impact of economic globalization has been relatively more marked in the lives of ordinary Indians in the sphere of consumption: what is available to them in shopping malls or the marketplace and the effects that new consumption patterns have on the making of a new Indian middle class. This dimension to globalization—which is also linked to the production of new forms of identity politics in India, as elsewhere—is barely mentioned in Nayar’s account of globalization and economic integration, an unfortunate limitation on an otherwise extremely good and thorough study.
In sum, Nayar has written a book that many students of India and of globalization will find useful. It is well organized, well written and generally balanced in its treatments of key issues. Given that no author can be expected to cover all aspects of economic globalization in one text it is perhaps unfair to suggest that Nayar’s book is limited by its reluctance to deal directly with the new logics of economic consumption in India. But this is a limitation, nonetheless.
Stuart Corbridge
London School of Economics, London, United Kingdom
pp. 457-458