6 - Has rural India lost out?

Summary

Is the rising power of a group or class reflected in changes in the economic behavior of the state? If so, how precisely does that happen? The argument so far has dealt with these questions at two levels. In order to proceed to the central task of this chapter – namely, assessing the impact of group power on economic policy outcomes – let me first recapitulate the argument developed thus far.

First, both in party and nonparty politics, an unambiguous rise in agrarian power has taken place, which, in turn, has led to an ideological reformulation of politics on the agrarian question. All political parties support the demand for higher agricultural prices and subsidies, and call for a better deal for the countryside in economic development.

Has the ideological reformulation of party politics influenced economic policy? The second level of the argument has dealt with changes in policy norms. India's agricultural policy was changed in the mid-1960s. Abandoning the principles of low agricultural prices and labor-intensive agricultural development, the post-Nehru government made farm-price incentives and investments in new technology the key norms of agricultural policy. This change took place long before pressures for higher prices emerged in the polity, indicating that a change in policy principles actually led to a new definition of agrarian interests, not vice versa. However, once the new definition of agrarian interests acquired political momentum, the government reworked the principle of price incentives in a manner more favorable to the countryside.