Global Discourses and Local Politics in the Production of Power Policy in India
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Dialogue
Global Discourses and Local Politics in the Production of Power Policy in India
WAQUAR AHMED
ABSTRACT Waquar Ahmed examines the evolution of electric-power policy in India by drawing linkages between global and local national discourses, of development. He focuses on the objectives and goals of the developmental state of India after the end of colonial occupation, and how the transition from Keynesianism to neo-liberalism as the dominant developmental discourse at the global level has impacted India’s power policy. He focuses on the dynamic nature of state-society coalition in India in order to understand how changing coalitions at different points of time in history, have impacted India’s power policy. KEYWORDS India; power; policy; Keynesianism; neo-liberalism
From Keynesianism to neo-liberalism India emerged as an independent nation-state in the year1947, when Keynesianism was the dominant developmental discourse. Keynes, in his General Theory of Employment, Interest and Money (1936) had argued that real investment (in new factories, tools, machines, and greater inventories of goods) was the crucial variable: changes in real investment fed into other areas of an economy. The decision to invest depended on comparisons between expected profits and the prevailing interest rate. Keynes explained interest rate in terms of speculation about future stock prices, which in turn determined interest rates, as savings moved from one fund to another, which again depended essentially on expectations about the future. For example, investors bought machines, thereby providing income to machine builders. In turn these spent money, further increasing national income, with the multiplier effect1 varying with the proportion of additional income that was spent rather than saved, and so on; a decrease in real investment had the reverse effect (Peet with Hartwick,1999). The government could influence this process through interest rate and other monetary policies, shifting the economy from one equilibrium level to another, generally to higher employment levels. Conservative Keynesian economists have viewed the manipulation of interest rates as a relatively non-bureaucratic, non-intrusive method by which the central bank of a country tries to influence national income and employment; an alternative is tax reduction. Liberal Keynesian economists see government deficit spending as a more effective measure: the liberal aspect is that deficit spending improves social services (Peet with Development (2006) 49(3), 94–100. doi:10.1057/palgrave.development.1100275
Ahmed: Power Policy India Hartwick, 1999). Keynesian economic theory, which established the legitimacy of state intervention into market economies with the aim of achieving growth rates decided on the basis of social policy, coupled with socialist objectives of striving for social, economic and political justice and equality of status and opportunity (Austin, 1999) became the guiding principal for development policy formulation of post-colonial India. Keynesianism as the
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