India experienced a significant decline in economic development in the 1970s and 1980s. The decline was attributed in part to the government’s effort to pacify the contending dominant groups in the country. In this paper, the dominant groups and their interests will be discussed.
The Contending Dominant Groups
The dominant groups were the three proprietary classes that included the following. The industrialist class was the first dominant group in India. This group consisted of leading business families in the country (Bardhan 3-16). Members of this class were the richest since they owned most of the country’s largest companies. The rich farmers were the second dominant group in India. They accounted for nearly 16 percent of rural households. The third dominant group was the professionals who worked in the public and private sectors in the country.
The Interests of the Dominant Groups
The main interest of the industrialists was to lead the industrialization process in India. Specifically, their interest was to dominate the industrial sector of the economy by owning the largest businesses in key industries such as manufacturing. In order to achieve their interest, the industrialists advocated for domestic production of industrial and consumer goods to replace imports (Bardhan 3-16).
This strategy was expected to improve the market share of domestic products, thereby allowing the businesses of industrialists to thrive. The industrialists also had commercial interests. In this case, their interest was to earn high profits by increasing sales and benefiting from subsidies from the government.
The interest of the rich farmers was to dominate the agricultural sector in terms of wealth accumulation. In this respect, they focused on large-scale farming. This involved hiring labor and cultivating large parcels of land to increase profitability while lowering production costs. The professionals’ main interest was to increase their income by working for the government and the private sector. Thus, they took advantage of the scarcity of skilled labor in India to demand for high income.
Government Policies and the Interests of Dominant Groups
The government policies that advanced the interests of the industrialists included import-substitution industrialization and quantitative trade restrictions. These policies reduced the competition from foreign firms in India, thereby enabling the goods of industrialists to dominate the local market (Dutt and Rao 1-52). The government also established several public lending institutions to provide credit to the private sector.
As a result, the industrialists accessed cheap loans that they used to expand their businesses (Bardhan 3-6). The government’s policy of allocating business licenses through a bureaucratic system also advanced the industrialists’ commercial interest. In particular, the industrialists influenced the bureaucratic system through corruption, thereby expanding their production capacities beyond the legal limits.
The government’s land reform policies enabled the rich farmers to acquire huge pieces of land, which they needed to engage in large-scale farming. The government also implemented price support policies so that rich farmers could sell their products at favorable prices to making huge profits.
The rich farmers also benefited from the government’s agricultural subsidy policy. In this case, the farmers reduced their production costs by using subsidized inputs such as diesel and fertilizers. The government’s poor taxation system allowed the rich farmers to avoid paying taxes on their profits.
The professionals benefited from the government’s policy of managing the country through an independent and bureaucratic civil service. Since the professionals were part of the civil service, they deliberately directed education away from the majority of the population. As a result, they created a shortage of professionals in order to avoid competition.
Poverty and Social Well-being in India and China
Pre-reform Advances
China and India have achieved a steady improvement in social indicators due to the advances that they achieved in the pre-reform era. In China, health indicators improved due to the central planning for the provision of medical services (Awakening Giants 115). In the pre-reform era, China had a large number of paramedics who provided medical services at the village level. They focused on treating easily treated diseases and injuries.
They also had a system of referrals that facilitated access to more advanced medical services. As a result, majority of the population was able to access medical services. China also had a rudimentary but effective health insurance that covered majority of the rural population. The insurance eliminated the financial constraints that prevented access to medical services among the rural poor. As a result, health indicators such as child mortality, life expectancy, and underweight children improved tremendously.
In India, health indicators improved because of the creation of the capacity to deal with disease outbreaks. This helped to reduce the prevalence of major diseases such as malaria in the pre-reform era. Consequently, life expectancy increased as mortality rates reduced. In education, China promoted literacy and basic skills through central planning (Awakening Giants 115).
There was adequate financing of education by the central government to improve accessibility. As a result, literacy levels improved significantly during the pre-reform era. In India, the government promoted higher education. Thus, there were more college graduates in India than in China in early 1980s.
Social Wellbeing in India
India has achieved rapid economic growth in the recent years (India Development and Participation 34-129). However, the country’s growing income disparity means that poverty is still a major problem. The wellbeing of the population is also very poor. There is limited access to sanitation, education, and healthcare services. As a result, the rate of illiteracy and mortality remains high.
India’s poverty and social indicators are worse than those of most of its peers. India has the highest GDP among the 16 poorest countries that are located outside the Sub-Sahara Africa region (Dreze and Sen 44-81). However, nearly all countries in this category perform better than India in terms of improvements in poverty and social indicators. For instance, Vietnam’s rate of child mortality, DPT immunization, female literacy, and access to sanitation are much better than India’s.
In the South Asia region, India’s social indicators lag behind those of all countries except Pakistan. For instance, Bangladesh performs better than India in terms of life expectancy, immunization rates, and child survival. In Bangladesh, at least 90% of the population has access to sanitation facilities. However, in India only 50% of the population can access sanitation facilities such as toilets (Dreze and Sen 44-81).
Among the BRIC countries, India has the worst poverty and social indicators. Every country in this category has achieved universal literacy among individuals aged between 15 and 24 years (Dreze and Sen 44-81). However, in India nearly a quarter of the population in this age group is still illiterate.
Although all BRIC countries have eliminated malnutrition among children, the problem is still rampant in India. Moreover, India’s per capita GDP is much less than those of its fellow BRIC countries. Overall, the level of poverty and social wellbeing in India is worse than in most developing and emerging economies.
Works Cited
Bardhan, Pranab. Awakening Giants: Feet of Clay. Oxford: Princeton University Press, 2012. Print.
—.The Political Economy of Development in India. London: Basil Blackwell, 1984. Print.
Dreze, Jean and Amartya Sen. An Uncertain Glory: India and its Contradictions. Oxford: Princeton University Press, 2013. Print.
—. India: Development and Participation. Oxford: Oxford University Press, 2002. Print.
Dutt, Amitava and Mohan Rao. Globalization and its Social Discontents: The Case of India. New York: Center for Economic Policy Analysis, 2000. Print.