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Varshney Describes Trends in Indian Political Economy at WEF's India Economic Summit

November 15, 2011

A new round of economic reforms has been much discussed but slow to materialize in India, and Institute Professor Ashutosh Varshney discussed why in an interview this week in the New York Times India Ink blog. In separate interviews, with Reuters TV, Varshney also discussed India's "Gilded Age" (see video below, the differences in economic growth in India ("a messy democracy") and China (with "an authoritarian political dispensation"), the awakening of urban politics in India, and India's current anti-corruption movement. His "Gilded Age" metaphor was also echoed in the International Herald Tribune

Varshney was interviewed on the occasion of the World Economic Forum's India Economic Summit, where he was invited to speak on a panel on "India's Policy Outlook." 

While the elite political class in India sees the reforms as a way to boost economic growth even higher than the current 7 percent, for most voters in India both the reforms and related growth are relatively abstract concepts, Varshney told the New York Times. The mass political class is more interested in policies that will directly benefit their lives now, he said. And few of the delayed reforms will do that, at least in the short run.

On the WEF panel, Varshney explained that "economic growth has not led to success in mass politics." Talking about three different forms of capitalism state capitalism, entrepreneurial capitalism and crony capitalism he said that "in India we have to increase instances of entrepreneurial capitalism, while crony capitalism has to go down."