Developmental Logic and Resurgence of New State Capitalism in India

Abstract

This paper explores how state capitalism is related to market capitalism in the global South, thereby challenging the dichotomous view frequently adopted in'new'state capitalism literature. We analyze the case of India, where the state has actively mobilized state-own entities to meet new economic challenges. Drawing upon an in-depth analysis of the official documents, this article makes two central claims. First, India's new state capitalism is driven primarily by developmental logic. The government has mobilized state-owned entities to conduct specific development projects that had progressed slowly when the government relied on the private sector. Second, India's new state capitalism has been expanding amid not only liberalized but also liberalizing economic regimes. We argue this by analyzing the role that state-owned entities play in improving the business environment, sustaining fiscal health, and attracting private companies and talent. As such, this article suggests that emerging debates in new state capitalism literature should pay more attention to the critical role that state-own entities play in the development process and facilitating the market economy. It also suggests that the developmental state model is conceptually relevant to explaining the revival of state-centered developmentalism in the global South and India.