Part of The Best Books of 2012 on Asia and the Pacific

Poverty Amid Plenty in the New India

India's economic reforms of the 1980s through the first decade of this century unleashed private enterprise, encouraged foreign investment, and expanded foreign trade. The policies generated high growth but also stirred controversy over unequal wealth distribution. Kohli's scorching critique argues that a "state-business alliance" dominates Indian policymaking. The political system maintains a façade of pro-poor rhetoric and politicians reach out to disadvantaged ethnic and caste groups, but policymakers remain insulated from pressures for redistribution. Kohli calls this economic strategy "pro-business" rather than "pro-market" because it coddles big firms. To be sure, the Indian version of this strategy provides less direct support to big companies than the classic East Asian versions of China, Japan, and South Korea. But the Indian government suppresses labor activism, and its antipoverty programs do not work. The exclusion of the poor from a fair share of the benefits of economic growth helps explain why they have resorted to caste-based violence and even to the Maoist, or Naxalite, rebellion that smolders in the eastern part of the country.

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