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Business and labor market flexibility in India: the importance of caste

Published online by Cambridge University Press:  20 January 2017

Lawrence Saez  and
Zaad Mahmood
Lawrence Saez*
Affiliation:
SOAS – Politics, Thornhaugh Street, London WC1H 0XG, United Kingdom of Great Britain and Northern Ireland
Zaad Mahmood
Affiliation:
Political Science, Presidency University, 86/1 College Street, Kolkata 700023, India
*
Corresponding author: Lawrence Saez, e-mail: ls4@soas.ac.uk
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Abstract

Since the enactment of economic liberalization in India in the early 1990s, variation in investment climate and labor market reforms across sub-national states has been linked to the increasing relevance of business in policy making. This article argues that the influence of business on policy is conditioned by wider political dynamics. We argue that the reform orientation of states correspond to the position of business classes and caste-based groups within the support base of political parties. We show that caste identification plays an important role on the position of political parties towards business liberalization policies. Thus, we conclude that the relative power of business across the states appears to vary due to the relation between business and government, which in turn is structured by the salience of business castes as an electorally relevant group.

Type
Research Article
Information
Business and Politics , Volume 18 , Issue 2 , August 2016 , pp. 171 - 198
Copyright
Copyright © 2016 Walter de Gruyter GmbH, Berlin/Boston 

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