The State, Industrialization and Competition: A reassessment of India's Leading Business Enterprises under Dirigisme

For over four decades after independence in 1947, India’s industrialization took place under a regime with an extensive system of controls over private capital. It is commonly believed that during this period of dirigisme, established dominant business families successfully manipulated the system to block competition from new firms and thereby perpetuated their dominance. This paper presents evidence to show that this perception conceals as much as it reveals. The process of industrialization between independence and the onset of liberalization in 1991 is actually marked by a combination of continuity with important shifts in the composition of Indian big business. The paper provides a framework for understanding this combination by revisiting the understanding of how business rivalry under Indian dirigisme actually worked. This is done by placing it within the context of dynamic industrialization and structural change, which unfolded within the specific economic, social and political realities of India. The paper shows that continuity and change amongst the leading private business enterprises had common roots in this competitive context.