The Rise of Statism in Contemporary India : An Institutional Perspective

In the recent past, India has seen a rise of strong state which made its presence felt through se series of difficult measures such as demonetization, abolition of Tin-Talaq practice and article 370 even though none of these are particularly welfare enhancing for the majority population of India. I reckon that these measures merely act as signaling devices; signaling the emergence of a new kind of statism, different from the old, Nehruvian statism which prevailed in India for the larger part of its post-independence history. The usual interpretation for the new regime is given in terms of the state leaders’ ideology which essentially is a supply side explanation. While the supply side argument is a valid one, in this article, I focus on the demand side instead and analyze how the electoral success of the new regime can be seen as a rise in the demand for a strong state. In my view, the answer to this question lies in the relationship three fundamental institutions — state, community and market. I show that historically the state and the communities keep contesting over the legal framework critical for resource allocation. Both the institutions had their moments of wins and losses as unlike many Western societies, in India the state could not dominate the communities. I extend this argument to show that in the recent past, with the emergence of market for club-goods and rise in income inequality, the very balance of power between the state and communities got disturbed, leading to a rise in demand for strong state