LAUSR

The last three decades have witnessed governance transformations in India and China. China gave up autarkic communism and engaged the world. India gradually gave up its somewhat more liberal import substitution-based closed economy model and engaged the world by giving greater primacy to private companies. India began to open up the economy to private investment from the mid-1970s but trade and international orientation arrived only after 1991 (Mukherji, 2014a). By this time, the Chinese economy had become a powerhouse. India’s rates of economic growth surpassed China’s only in recent years, when the Chinese economy had become much larger than India’s. India is the most rapidly growing economy among the Group of 20 countries that discuss the globe’s financial architecture. The Indian state grew from a within a colonial apparatus quite unlike the Tilly-esque war-making and tax collection route to statehood (Tilly, 1990). Nor did it evolve from struggles between labor and capital, impacted deeply by the arrival of capitalism (Acemoglu & Robinson, 2006; Moore, 1966). India chose a democratic path in 1947, when its middle class was thin and the institutional pillars of capitalism were weak. There was a hegemonic view within the state of marrying democracy with socialism (Ganguly & Mukherji, 2011; Kaviraj, 1997). India is home to a weak state in an eco-system powerfully shaped by social forces. The state can neither make a Dengist nor a Lee Kuan Yew type move to swiftly turn the page toward a new policy paradigm. Comprehending India’s path requires reconciliation of two apparently contradictory views of the state. The first is the view that India is a weak state. Second, despite being a soft state, policy ideas and changes in worldviews within the state, matter. Third, and consistent with the second point, the Indian model is neither a coerced version of the Washington consensus nor is it a veneration of the Beijing consensus. Policy makers are acutely aware of global developmental paths. What paths they choose, and how gradually such paths get entrenched, despite social forces, lies at the heart of India’s developmental journey. This article discusses the nature of India’s gradual model governing growth and welfare.