Walsh J.E. A Brief History of India
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A BRIEF HISTORY OF INDIA
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lic policy, and Indian democracy is no longer a “constitutional democ-
racy” in which public decisions are made in a rational manner but a
“populist democracy” (Guha 2007, 680–681).
Other analysts suggest that at the bottom of calls for a rejection of
India’s democracy is the growing recognition of the rich and middle
classes, since the Mandal protests of the late 1980s, that Indian govern-
ment is no longer in their hands. As one analyst suggests, India’s social
structure has changed, from “an elite-mass structure to one with a sub-
stantial middle class sandwiched between these two poles” (Sridharan
2004, 19). “There is a kind of cynicism about how is it going to make
a difference if we go to vote or do not go to vote,” said a Delhi state
minister to Jaffrelot when asked why the middle classes in Delhi
abstained from voting. “. . . Their attitude is ‘I am not ready to try and
make a difference,’ because they feel they are not in numbers adequate
enough to bring about a change” (2008, 46). This perception is echoed
by Pavan Varma in The Great Indian Middle Class (2007): One reason,
he writes, “for middle-class disenchantment with democratic politics
is the perception that the electoral system no longer serves its interests,
either exclusively as it would like, or even preponderantly as was the
case in the past. Elections are about numbers, and the rural and urban
poor are many more in number than the middle class” (55).
Interviewing Dalit students at Jawaharlal Nehru University in 2005,
Jaffrelot found they agreed that the upper castes were now criticizing
democracy because they were losing power in relation to the lower
castes. “There are moves now to subvert democracy,” one Dalit student
told Christophe Jaffrelot. “. . . When democracy was in shambles in the
beginning of the 1940s–1950s, Indian democracy was portrayed as the
shining light of the world. And now when it is actually coming into
its own, when people are participating, people are beginning to voice
what they feel, then democracy becomes something on which we have
surveys conducted about if it is good to vote or not” (2008, 49).
Congress Plans
Although analysts generally agree that it was the BJP that lost the 2004
elections rather than the Congress United Progressive Alliance (UPA)
coalition that won it, nevertheless, the election offered Congress the
opportunity to take power and the possibility of resurrecting its ear-
lier popularity. Up to the 1980s, the success of Congress had lain in
its ability to be a “catchall” party, to combine voters from contending
social groups—from upper castes, Dalits, and Muslims, for instance—to
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INDIA IN THE TWENTY-FIRST CENTURY
create a coalition sometimes of voter extremes. Such coalitions gave
the Congress the ability to poll between 36 percent and 51 percent of
the vote from a wide range of social groups up into the 1990s (Jaffrelot
and Verniers 2009, 3). But the 1990s witnessed the disintegration of the
Congress’s social coalition as the BJP and BSP at the national level and
THE COMMON MINIMUM
PROGRAM, 2004
I
n May 2004, the Congress-led United Progress Alliance released
its Common Minimum Program, a list of programs and commit-
ments its alliance made for the future government of India. What fol-
lows is a statement of the six basic principles to which the government
pledged itself.
To preserve, protect and promote social harmony and to enforce the
law without fear or favour to deal with all obscurantist and funda-
mentalist elements who seek to disturb social amity and peace.
To ensure that the economy grows at least 7–8% per year in a
sustained manner over a decade and more and in a manner that
generates employment so that each family is assured of a safe and
viable livelihood.
To enhance the welfare and well-being of farmers, farm labour and
workers, particularly those in the unorganized sector, and assure a
secure future for their families in every respect.
To fully empower women politically, educationally, economically and
legally.
To provide for full equality of opportunity, particularly in education
and employment for the Scheduled Castes, Scheduled Tirbes, OBCs
and religious minorities.
To unleash the creative energies of our entrepreneurs, businessmen,
scientists, engineers and all other professionals and productive forces
of society. . . .
Source: Young India. “2004: India’s Common Minimum Program.” Available online.
URL: http://www.yidream.org/2004/cmp.shtml. Accessed February 1, 2010.
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A BRIEF HISTORY OF INDIA
314
the growing number of regional parties in the different states took votes
that had previously gone to the Congress.
Now, in the aftermath of the 2004 elections, with Sonia Gandhi speak-
ing for the poor and disadvantaged, Manmohan Singh speaking for eco-
nomic reforms popular among the wealthy and middle class, and rural
voters angry at the BJP over an economic prosperity in which they did
not share, Congress saw the possibility of reestablishing its old domi-
nance. In a Common Minimum Program announced by the Congress-led
United Progressive Alliance (UPA) in 2004, the new government com-
mitted itself to policies designed to maintain the support of its coalition
members. The Common Minimum Program offered a pledge to grow
India’s economy at 7 to 8 percent a year “in a manner that generates
employment,” a commitment to protect the welfare of farmers and farmer
workers, a promise to introduce a new National Employment Guarantee
Act that would guarantee 100 days of employment to the urban and rural
poor and the lower middle classes, and a promise not to privatize public
companies that were profi table and to consider privatization of compa-
nies only on a case-by-case basis (Young India 2004).
Economic Gains
Indian economic reforms had produced dramatic changes in the 1991
to 1996 period in part spurred on by the government’s balance of pay-
ments crisis and measures designed to globalize India’s economy and
introduce competition to formerly protected Indian industries. But
during the coalition governments from 1996 to 2001, market-oriented
reforms had slowed as Indian industries, beginning to feel the effects of
external liberalization and increased competition, became less support-
ive of reforms. By the time of the elections of 2004, the BJP government
had begun a new phase of reforms, this time focusing on the privati-
zation of state-owned companies, new labor laws intended to make it
easier to fi re employees, and foreign investments.
India’s high fi scal defi cits, public debt, and weak infrastructure (power,
ports, transport) were among the most problematic aspects of its economy.
The reforms of 1991–96 had succeeded in lowering the combined center
and states fi scal defi cit from 9.4 percent of GDP in 1990–91 to 6.4 percent
in 1996–97. But by 2000–01 the consolidated defi cit had risen again to
9.5 percent and by 2002–03 to 10 percent. As the fi scal defi cit worsened,
the ratio of India’s public debt (the amount owed by the country to either
internal or external investors) to its GDP also rose from 66 percent of GDP
in 1996–97 to 85 percent in 2002–03 (Ahluwalia 2005, 60).
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INDIA IN THE TWENTY-FIRST CENTURY
By 2004, however, the country was seeing renewed growth in agricul-
ture and industry and in a booming service sector that now accounted
for about half of all GDP. Much of this service sector growth was due to
the Indian software industry, which had grown at an average of 8 per-
cent throughout the 1990s. By 2004 this industry employed 600,0000
people and exported $13 billion of services (Guha 2007, 686). In addi-
tion the outsourcing of work to India had resulted in growth in Indian
centers performing work that ranged from the screening of U.S. medi-
cal tests to the running of Indian-based call centers for credit card and
airline companies. In 2002 there were more than 300 such call centers
in India employing 110,000 people (Guha 2007, 688). Before the 2004
elections, the GDP growth rate had jumped to 8.5 percent (from a low
of 3.8 percent in 2002–03). Although the BJP’s claims of Indian “resur-
gence” were rejected by voters in the election of 2004, some analysts
India’s GDP Growth Rates
Period Percent of GDP Growth
1950–72 3.5
1972–82 3.6
1982–92 5.0
1992–2002 6.0
2001–02 5.8
2002–03 3.8
2003–04 8.5
2004–05 7.5
2005–06 9.5
2006–07 9.7
2007–08 9.0
2008–09 6.7
2009–10 7.5
Source: Reserve Bank of India. “Table 233: Select Macroeconomic Aggregates—Growth
Rate and Investment Rate (at Constant Prices).” Handbook of Statistics on Indian
Economy 2008–09 (2009). Available online. URL: http://www.rbi.org.in/scripts/
AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on%20Indian%20
Economy. Accessed February 1, 2010.
Note that fi gures for 2007–09 are estimates.
*2009–10 data is the RBI estimate as of January 2010.
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A BRIEF HISTORY OF INDIA
316
now think that the India economy was already poised for strong future
growth at that time (Ahluwalia 2005, 57).
Between 2004 and 2009, the Indian economy grew at the average yearly
rate of 8.5 percent, even with the global fi nancial crisis and economic
slowdown of 2007–09. India escaped the worst of the fi nancial crisis
because of its relatively cautious banking policies and low dependence on
exports for growth. Instead domestic demand drove the Indian economy,
especially in the areas of consumer durables and automobiles. Agriculture
contributed approximately 20 percent of India’s GDP while remaining the
area of the economy that employed the most people (slightly more than
half the Indian workforce). The service sector, on the other hand, led by
computer software and outsourcing companies, continued to contribute
more than half of India’s GDP, even while employing only one-third of its
workers. Infl ation remained in the single digits, although it rose from 3.8
percent in 2004 to a predicted rate of more than 8 percent in 2009.
Although efforts were made to reduce the country’s fi scal defi cit
through 2007, fuel and fertilizer subsidies caused it to rise substantially
in 2008 and 2009. Public debt also continued high, at 85 percent of GDP
in 2009. By 2009, however, the weakened global economy had caused the
debt ratios of other world economies to rise even above the Indian level.
As in the 1990s and early 2000s, an estimated 90 percent of India’s public
debt was owed to its own citizens (not to external investors), a relatively
stronger position. For 2010, the Indian government announced plans to
reduce its defi cits by selling shares of government-owned companies and
by reducing fertilizer and fuel subsidies, although it remained to be seen
if internal political pressure would allow these policies to be carried out
(New York Times 2010). For the long term, India’s fi scal defi cit, high level
of public debt, weak infrastructure, need for employment opportunities,
Government Debt as a Percentage of GDP (2009)
Government Debt as a Percentage of
Country Gross Domestic Product (GDP)
India 85
United States 85
China 20
Japan 219
Source: New York Times, 8 February 2010, B1 and B6.
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INDIA IN THE TWENTY-FIRST CENTURY
and need to strengthen both basic and higher educational opportunities
remained problems for its economy.
Agrarian Woes
Since the late 19th century, peasant farmers in India had been produc-
ing crops for both world and all-Indian markets. This commercializa-
tion of agriculture had contributed to the growth of Indian famines at
the turn of the century as peasant-produced food crops were replaced
by crops aimed at nonlocal markets. Now, at the end of the 20th and
start of the 21st century, the increased globalization of the Indian rural
economy again produced distress and disruption among rural commu-
nities as farmer suicides and regional and local struggles over water and
pollution plagued the Indian countryside.
Farmer Suicides
In 2004, shortly after taking offi ce, Prime Minister Manmohan Singh
took offi cial notice of the high rate of farmer suicides by visiting rural
Andhra Pradesh, a state which, by then, had seen 3,000 such suicides
and in which 70 percent of the population depended on agriculture for
their living (BBC News 2004). Newspaper reports of the suicides of farm-
ers had begun to appear regularly in the late 1990s. The heads of farm
families, often deeply in debt to local moneylenders, committed suicide
by hanging, electrocution, or, most often, by drinking pesticide. By 2007,
the total number of suicides for the past 11 years had reached 182,936, an
average of 16,631 suicides per year, and much higher than the rate of sui-
cide among nonfarming populations (Sainath 2009). Almost two-thirds
of farmer suicides had taken place in just fi ve Indian states: Maharashtra,
Karnataka, Andhra Pradesh, Madhya Pradesh, and Chattisgarh.
Farmer suicides are attributed to crop failures, high expenses of cultiva-
tion, and high levels of farmer indebtedness, particularly in regions where
farmers grow cash crops. Food crop farmers in states in the Gangetic
plain and eastern India have seen fewer suicides; these regions are not
as intensively farmed, their cultivation costs are lower, and government
supports for food crops provide some needed stability. Cash crops, on the
other hand, such as cotton, coffee, sugarcane, groundnut, pepper, and
vanilla, require the heavy use of fertilizers, water, and specialized seeds.
These crops are vulnerable to highly volatile global commodity prices and,
at the same time, they have much higher per acre cultivation costs. For
instance, as P. Sainath, a journalist who has written extensively on farmer
suicides, shows, while a farmer in 1991 in a Maharashtrian district might
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A BRIEF HISTORY OF INDIA
318
have bought local seeds for Rs. 7 to Rs. 9 per 1,000 grams, in 2004 farm-
ers growing hybrid cotton from Monsanto seeds would have had to pay
between Rs 1,650 to Rs. 1,800 for a bag of only 450 grams of seed (2009).
In Kerala, as P. Sainath reports, farmers switching from growing paddy to
growing vanilla in 2003–04 saw their per acre costs rise from Rs. 8,000 for
paddy to almost Rs. 150,000 for vanilla.
In 2004, both the Congress coalition at the center and selected state
governments began to provide compensation packages (estimated at
about $3,000) to the families of farmers who took their own lives. In
addition, some states, such as Kerala, have created commissions to
review indebtedness on a case-by-case basis. As news reports point out,
the numbers of farmer suicides has grown even as the number of Indian
people working at farming has decreased: 8 million Indian workers left
farming as a livelihood between the censuses of 1991 and 2001.
Water Fights
Even as high indebtedness and the diffi culties of farming commercial
cash crops drove individual farmers to suicide, rural villages had to
contend collectively with water disputes, water shortages, and/or water
pollution, caused either by regional interstate confl icts or by global
multinationals. As water is increasingly in demand in India, whether
for high-tech crops, bottled water and sodas, or urban city dwellers,
some suggest that water, even more than oil, will be the resource most
crucial for India’s future economic development (Guha 2007, 660).
The regionalization of Indian politics and the concomitant strength-
ening of state governments vis-à-vis the national government (and
national courts) have left the central government increasingly unable
Farmer Suicides, 1997–2007
Total Number of Farmer
Period Suicides in India Average Per Year
1997–2001 78,737 15,747 per year
2002–06 87,567 17,513 per year
2007 16,632 16,632
Total 1997–2007 182,936 16,631 per year
Source: Sainath, P. “The Largest Wave of Suicides in History.” Counterpunch, 12 February
2009, p. 2. Available online. URL: http://www.counterpunch.org/sainath02122009.html.
Accessed January 14, 2010.
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INDIA IN THE TWENTY-FIRST CENTURY
This undated picture shows young men fi lling water cans from a supply truck of the Delhi Jal
(Water) Board, Delhi Government. In water-short cities such as New Delhi, the city govern-
ments contract out to tankers to serve areas without piped connections or clean groundwa-
ter. The Delhi Jal Board was constituted through an act of the Delhi Legislative Assembly in
1998. According to its Web site, it currently sends out tankers on routes through 18 differ-
ent locations in the city.
(Paul Prescott/Shutterstock)
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A BRIEF HISTORY OF INDIA
320
to compel states to accept its mediated decisions in cases of water
disputes. States that hold the headwaters of important irrigation riv-
ers have begun to seize those waters for their own uses. One example
is the struggle between the states of Karnataka and Tamil Nadu over
the Kaveri (formerly Cauvery) River waters. The Kaveri originates in
Karnataka and then fl ows east into Tamil Nadu. While initially most
irrigated farmlands using these waters were in Tamil Nadu, by the end
of the 20th century, the number of acres in Karnataka under irriga-
tion farming was fast approaching that of Tamil Nadu. The two states
disputed each other’s claims to these waters throughout the 1970s and
1980s without resolution. The Cauvery Water Disputes Tribunal, set
up in 1991, has been unable over the past years to bring this dispute to
a negotiated conclusion. By 2007 four states—Karnataka, Tamil Nadu,
Kerala, and Puduchery—were involved in the dispute, and when the
tribunal announced its fi nal resolution in 2007, all four states found it
unacceptable and planned to reopen negotiations.
A similar dispute occurred in northern India. The state of Punjab
had been negotiating the sharing of the waters of the Ravi and Beas
Rivers (whose headwaters were in Punjab) with other states in the
region from the 1920s. But in 2004, the Punjab state legislature passed a
Termination of Agreement Act, declaring it would appropriate as much
of the Ravi and Beas Rivers as it wished before allowing these rivers
to fl ow on to the states of Haryana and Rajasthan. This act is also still
under review by the central government and by the courts.
Coca-Cola and Pollution
Finally, a third kind of water dispute arose in 2005 in the rural village of
Plachimada in the southeastern state of Kerala where the international
company Coca-Cola established a bottling plant in 2000. The growing
competition for water in rural regions is part of the ongoing agrarian crisis
in India, as water privatization threatens to deprive numerous rural com-
munities of the resources for growing crops essential to their livelihood.
Multinational soda companies Coca-Cola and PepsiCo returned to
India in 1993, as part of India’s liberalization of license rules and regula-
tions. The growth and increased prosperity of the middle class in India
have caused both the soft drink and bottled water industries to grow
rapidly. By 2005 the two multinational companies owned 90 factories
in India: 52 for Coca-Cola and 38 for PepsiCo. Soft drink sales alone
had increased by 2007 to $2 billion a year, and almost 80 percent of this
market was controlled by Coca-Cola and PepsiCo. The bottled water
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INDIA IN THE TWENTY-FIRST CENTURY
Thums Up, New Delhi, ca. 1978. One indigenous product whose market share was not dam-
aged by the liberalization of India’s economy was Thums Up, a Coca-Cola look-alike with a
red upward-pointing thumb on its bottle, the fl agship drink of the Parle soft drink company.
In the late 1970s, when Coca-Cola, along with other foreign companies, abandoned opera-
tions in India, Parle stepped in, offering Thums Up to a thirsty Indian market. But when
PepsiCo and Coca-Cola reentered India’s newly liberalized economy in the 1990s, Parle sold
their company to the international Coca-Cola. Ever since, and in spite of Coca-Cola’s subse-
quent efforts to kill off the Thums Up product line—a direct competitor with its own Coke
product—Thums Up has continued to maintain a strong market share, some suggest as
much as half of cola sales in India.
(courtesy of Judith E. Walsh)
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