Culture and Privilege in Capitalist Asia - Jurusan Antropologi ...

256 SALIM LAKHA
conditions lured many graduates of India’s elite universities and institutes to
Western countries, and other parts of the world, where better employment
opportunities have been more readily available. It is these and other diasporic
Indians who in various ways have been one of the important forces contributing to
India’s globalisation.
The state in India succeeded in expanding the industrial base and educational
facilities, especially at the tertiary level, but the limits of state-sponsored
development were evident at least since the 1960s (see Bhagavan 1987:61—2;
Khanna 1987:49). The economic crisis experienced towards the end of the third
FYP (1961/2—65/6), demonstrated that whilst the state had succeeded in
promoting industrialisation, it had not realised the goals it had set for agriculture,
employment and poverty alleviation (Bhagavan 1987:61). According to Frankel,
from an economic perspective the crisis experienced during the third FYP provided
a strong case for a shift in favour of private capital (1978:216), especially
considering the limitations upon the state’s ability to generate substantial resources
for investments in industrial and technological development.
To attribute the crisis solely to an inherent weakness associated with statesponsored
development runs the risk of an oversimplification of the politicaleconomic
forces at work. The ability of the state to continue to play its former role
in industrial development was constrained also by the prevailing coalition of
dominant class interests, especially those of the rural elite, the industrial
bourgeoisie and professionals in the state sector (Harriss 1989). Subsequently,
with the first phase of economic liberalisation (or deregulation) in 1985, private
capital increasingly gained access to the public sector, and the state gradually
began to relinquish its hold over the ‘commanding heights of the economy’
(Bhagavan 1987:72).
The benefits of liberalisation from the mid-1980s were realised mainly by
sections of small and large business, the professional middle class and foreign
capital. For example, the reforms initiated by the Budget in 1985 included lower
taxes for corporations, individuals and owners of wealth; reduction in import duties
for capital goods; tax incentives for exporters; and delicensing of twenty-five
industries (Harriss 1989:89). Foreign capital benefited mainly through more liberal
investment incentives, especially for investors in export-oriented industries and
through easing of import restrictions.
Increased liberalisation since July 1991 has accelerated the process of
globalisation and privatisation of the Indian economy, further benefiting sections of
the middle class, the local bourgeoisie and foreign capital. Policies have developed
entailing a substantial reduction of state regulation over the economy, and a major
commitment to privatisation of state-owned industrial and non-industrial ventures.
Some of the important changes include: concessions to foreign capital which allow
51 per cent equity ownership; substantial reductions in import duties and licensing
requirements; granting permission to Indian businesses to access capital from
stock markets overseas; lowering of taxes; and gradual privatisation of public
sector enterprises. 8