New Developmentalism and its Discontents: State Activism in Modi's Gujarat and India

Abstract

Regimes around the world are experimenting with combinations of economic liberalization and revived state‐activist strategies, producing ‘new developmentalist’ hybrids. This article suggests that a distinctive variant of new developmentalism is emerging in India. Its paradigmatic example crystallized in Gujarat, before and during Narendra Modi's tenure as Chief Minister (2001–14), and was taken national during Modi's first term as India's Prime Minister (2014–19). While scholars have highlighted the aggressively pro‐business industrial policy of the ‘Gujarat model’, closer examination reveals that this state intervention was more direct and extensive than previously acknowledged. The state took on a diversity of functions, particularly focused on infrastructure. These included not only classic developmental activities such as midwifing new industries or supporting select private enterprises, but also corrective functions: disciplining consumers, compensating reform losers, and repairing the bureaucratic apparatus. Today, in the face of predictions of radical deregulation or corporate rule, this reinvented statism is visible at the all‐India level. However, its history also illustrates the brittleness of India's new developmentalism, including its tendencies towards incumbency bias, resource misallocation, and debt. Political responses have often weakened accountability rather than tackling underlying problems. Both in India and elsewhere, the sustainability of new developmentalism appears uncertain.

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