ARC Internal Seminar: Sudipta Bhattacharyya

ARC Internal Seminar with

Sudipta Bhattacharyya

ICCR Visiting Professor at ARC:

India's liberalisation policies since 1991

India entered into neo-liberalization regime in 1991 as a loan conditionality of the IMF. The latter includes devaluation of currency, trade liberalization, reduction of fiscal deficit through reduction of the subsidy, de-nationalization or privatization etc. This is known as Washington Consensus. It is also known as the free trade regime. In this sense it is nothing new. Historically, the so-called free trade policy was associated with the capitalist industrialization in the north; while for the southern globe it inferred altogether different significance. In south it called for de-industrialization, slavery, forced commercialization and apartheid. The free trade doctrine gained a resurrection in the hands of the IMF and the World Bank in 1980s though its new version has far more adverse implication for the South than that of the classical comparative cost theory. At the height of the double standard the northern countries' advocate for the removal of a trade barrier for the South but continues to play protectionism on their part. This study pointed out that the stabilization that aims at reduction of a fiscal deficit in order to control inflation is nothing but an attempt of withdrawal of the state, in the form of reduction of a food, fertilizer and credit subsidy for the poor. The causal link between fiscal deficit and inflation is not supported by evidence (Mody 1992, Rakshit 1991). As a result of this policy Indian agriculture experienced the lowest ever growth rate since independence which was even lower than the population growth rate. At the same time conversion of 8 million hectares of land from food crop to export oriented crop called for acute food security and mass farmers' suicide. The policy of privatization is also fallacious. The policy of disinvestment does not aim to raise profitability, but again to reduce a fiscal deficit. The disinvestment has been done not of the sick industrial unit, but of the highly profitably run public sector. The industrial sector is also passing through a phase of stagnation. The high growth rate of Indian economy has been supported only by the service sector; which is not at all healthy, nor can it be sustainable.

The Asia Research Centre Internal Seminars is a series of seminars to share knowledge among members. To build up a lively and committed research community, members of the ARC network and other interested scholars will present and discuss their current research at the seminars.

The ARC Internal Seminars are mainly for researchers affiliated with the Asia Research Centre, but other interested scholars are most welcome to attend.

Please note: The centre hosts a small lunch for the participants, so should you wish to attend please inform us no later than two days before the seminar at arc@cbs.dk