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Low on steam State

As I mentioned in my last post, Atul Kohli’s book “State DirectedDevelopment” is a must read to understand the historical reasons for a low capacity state in India. In brief:

  • The British, especially after 1857, realized their limited capacity to uproot traditional structures of ownership of productive resources in India, and also, their ability to extract rent beyond a point. They overcame this issue by entering into agreements/arrangements with Indian elites of the time to act as the agents of the British. Therefore, as long as certain functions were performed by Indian elites in place of the British, the British did not have to invest in state capacity.
  • Consequently, the colonial state in India was a laissez-faire state, with low investments in state capacity. It should be noted that the nature of investment here is markedly different from investments in economic sectors. At issue here is the lack of investment in the capacity to extract and utilize these resources.
  • Independence did not fundamentally alter this laissez-faire model. While we opted for an interventionist approach to the national economy, it was not sufficiently complemented by investments in state capacity. As Kohli points out, the Indian National Congress additionally co-opted many of the same elites within its folds, therefore creating a political class opposed to greater penetration of the state into society.


All these factors have historically contributed to a low-capacity state in India. Additionally, things have not been helped by the lack of understanding of effective manpower planning in independent India. As per conversations I have had, as part of an austerity drive in the late 80s and early 90s, the departmental divisions responsible for manpower assessment were abolished!!

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