India, the NICs and the BRICS
It became commonplace to bracket India with China as the "emerging giants" by the mid-2000s. They had more or less equal populations (around 1,300 million), both were nuclear powers and both sufered deep rural poverty. But India's real importance in the world economy was much less than China's. It was about a third of the size in exchange rate terms (considerably smaller in fact than Britain or France) and 60 percent smaller in PPP terms; its growth rates were only a little above 60 percent of that of China in the late 1 990s, rising briefly to just less than 90 percent in the mid-2000s; its share of total world exports in 2003 was only 0. 7 percent, putting it in 3 1 st position. 63
There were some parallels with the Chinese pattern: an early attempt at state-directed industrialisation (the period of so-called "Neruvian socialism" ) was followed by a few years of stagnation in the mid and late 1970s; and then the introduction of reforms aimed at a much more market based model of accumulation. But there were significant diferences. Lacking the crude power of the Chinese state, India's state and private capitalists were not nearly as successful in subduing other classes (on the one side the old landowning class, on the other the workers and peasants) and so achieved less in the period of state-led primitive accumulation when the Indian growth rate was probably three quarters of China's. They were therefore less able to benefit from a turn to the world market-exporting less and remaining much less attractive to foreign capital than their Chinese competitors. "Reforms" pushed up the rate of accumulation, with investment reaching 25 to 30 percent of GNP. But this could only be sustained on the basis of a growing portion of output accruing to the capitalist class and the upper middle class, at the expense of the workers, peasants and the poor.
As a 2007 report for the IMF showed:
In the 1990s, the top of the population enjoyed a substantially larger share of the gains from economic growth compared to the previous decade. This had significant effects on income inequality, which grew within states, across states, and between rural and urban areas. 64
An analysis of income tax data suggests up to 40 percent of growth ended up in the hands of the top 1 percent of the population.65
The Years of Delusion
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