REGIONAL POLITICAL ECONOMY
Delhi’s ‘Regional’ Capitalism
Rana Dasgupta
The regional capitalism of Delhi described in this article
is not a minor energy in the world today. It has
abandoned some of its more provincial ways and also
realised that the particular skills it possesses—the skills
of infiltrating the political machine, the skills of using licit
and illicit money, or legal and extralegal techniques—
open up an immense zone of economic operation that is
largely closed, say, to American corporations.
Rana Dasgupta (rana@ranadasgupta.com) is a novelist based in Delhi.
64
N
early three years ago, I published a book called Capital:
The Eruption of Delhi, which was a meditation on the
changes wrought in the city of Delhi by the new economic
forms which emerged after 1991. One of the arguments the book
made was that the spirit of north Indian business is shaped by
profound forces of local history, and that the capitalism that
has emerged around the capital city is very much a local form.
What kind of forces am I talking about? The first and most
obvious is partition, which was the foundational experience
for the majority of those million or more people who came to
settle in the new capital after August 1947. It was these people
who would come to dominate the city’s economy in the ensuing
decades, partly because of the extremity of what they had
lived. The lessons of partition to those who had been turned
upon by neighbours, lost property, livelihood and relatives,
witnessed rape and murder on a vast scale and finally turned
up in Delhi as refugees were: cherish property and security above
everything else, scorn everything that is not tangible, never
rely on others and these lessons made for a very successful
business community. Their “Punjabi culture” was in many
ways a post-traumatic culture, very much altered from the
expansive culture of pre-1947 Punjab. The slaughter of Sikhs in
1984 only confirmed the city’s population in its paranoia,
which after that was expressed in a more fervent fixation with
physical walls and barriers, which is one reason Delhi is so
extraordinarily a gated city. But paranoia and insecurity never
hurt a businessperson. And as businesses established after
1947 are handed over to the third generation, the driving force
often remains the same: Our historical wounds are infinite and
can never be healed, but the endless accumulation of money
and property will do a lot to help.
The second major force, and the one I am more interested in
today, was the pre-1991 command economy, particularly as it
emerged under Indira Gandhi. The extreme controls she put in
place—of bureaucracy over business, and of centre over state—
made it difficult for sizeable business concerns to operate any-
where in the country without some foothold in Delhi. Business
persons from the South and West began to keep houses in the
capital so they could meet regularly with Delhi bureaucrats.
Many businesses from the North moved their headquarters
wholesale to Delhi so as to be on top of the action—as did
several large Kolkata concerns, many of which were set up by
North Indians during the British era, and now found themselves
paralysed by West Bengal shut-downs.
This migration led to a profound corruption of the capital’s
culture. The people who moved there were not the ones with
new and startling ideas—India’s software companies, for
novemBER 18, 2017 vol liI no 46 EPW Economic & Political Weekly

instance, which were set up in the same era, were set up far
from Delhi, and that was not an accident. No: the people who
were drawn to Delhi in those years were the ones looking to
elbow others out of basic resources—real estate, minerals,
petrochemicals; to get monopolies over highly regulated
assets—such as telecoms or media; or to sell stuff to the
state—construction, heavy industries, etc. They were looking
for partners and patrons in the political and bureaucratic system,
and they inaugurated that fervour of networking, soliciting
and kickbacks which persist in the capital’s social life.
All this is to say that there was a long prehistory to the sudden
emergence, after 1991, of Delhi’s oligarchic elite. Just as in
Moscow, a set of people had been gathering there for 20 years
for whom infiltration of the political establishment, and the
elimination of competition, was a key part of their business
strategy—and what they did after 1991, when the prizes grew
larger by many orders of magnitude, was only more of the
same. But the sudden rush to transfer public assets into private
ownership did further intensify Delhi’s magnetism. More
provincial elites, people who had made fortunes in Lucknow
or Jaipur or Chandigarh, now moved to Delhi—or sent their
sons there—to play the bigger game. With great amounts of
foreign capital now passing through Delhi, the advantages
that could be harnessed there relative to these other centres
were massively increased.
It was in Delhi, too, where the nature and purpose of these
backroom relationships was redefined. The 1970s model—
approvals in return for cash—was no longer productive
enough for either party. In the 1990s and 2000s, politicians,
for their part, were under stark new pressures. They did not
have the know-how or the capital to develop the new infra-
structure and systems which globalisation suddenly required
of them, and their corporate partners therefore took on a far
greater importance. To say nothing of the fact that the cost of
fighting elections rose dramatically in the same period, which
meant that politicians needed to pull in much greater reve-
nues—and the business of politics, like all other business,
needed to be expanded and professionalised. On the other
side, business owners, who had access to valuable capital and
know-how, could do little with them if they did not have access
to basic things like land. The only way to secure this access in
the urgent time frames of the post-1991 scramble was to secure
the resources of the state—to get land signed over to you by
the bureaucracy, for instance, and to have its former owners
evicted by the police.
What these partnerships could now deliver in terms of profits
and development was seen first and most spectacularly in the
village of Gurgaon where, once again, developer K P Singh had
been preparing things since long before 1991. When he began
to acquire land in the Haryana countryside, it was a dry, inac-
cessible place where very little happened beyond the wander-
ings of goat-herders on the baked earth. There were about
eight cars in the whole village and one had to book a phone
call to Delhi an hour in advance. By the early 2000s, Gurgaon
was the largest private township in Asia, a booming expanse
of hypertrophic, high-security apartment complexes which
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REGIONAL POLITICAL ECONOMY
looked down on a landscape of pure commerce. In 2007, Singh
listed his company on the Indian stock exchanges, and the
2008 Forbes list estimated him to be the world’s eighth-richest
man, with a fortune of $30 billion.
The point I have been trying to make so far is that these
Delhi eruptions, epic as they could become, arose from very
local forces. The contemporary commercial logic for Delhi’s real
estate industry, for instance, should not conceal the fact that
they emerged also from the centuries-long history of Punjabi land
dispossession, of which partition was but a recent instalment.
The question now arises: so what? Is the point interesting?
Do we need to spend time arguing that capitalism takes on
regional forms? Whoever believed otherwise? Every business-
person knows how different are negotiations in Boston and
San Francisco, in Paris and Frankfurt, in Shanghai and Beijing.
So why do we need to assert so energetically that Delhi’s capi-
talism is “regional,” and different from Mumbai’s or Chen-
nai’s? Is it not just a pedantic footnote to the big story? Espe-
cially, as the regional distinctiveness I describe above is dimin-
ishing by the day—as many family businesses exhaust their
own potential, seek outside shareholders, bring in professional
managers, and so give way to the general ethos.
Transnational ‘Region’
As long as we regard the story of “regional capitalism” as the
story of the world’s small and fading energies it is prone to
some charge of insignificance. So let me declare my real inter-
est in the idea of “regional capitalism.” It is that the region is
not always small. It is not necessarily even smaller than the
world. The region may be as large as the world, or even larger.
And this, I shall argue in the second half of this essay, is the
case today. The world—if we take that to mean the zone in
which capitalism functions “normally”—has shrunk to a size
smaller than the region—if we understand the region to be
where capitalism functions according to local eccentricities
and irrationalities. And this is not only because of the obvious
contraction of the former. It is also because of the enormous
expansion of the latter. In fact, an enormous transnational
“region” has opened up which rewards precisely those attributes
described above as belonging to Delhi business persons. And in
this sense, the region is rising and taking over the world.
The obsessive national preoccupation of so much postcolo-
nial culture-making and scholarship has helped to convince us
that every postcolonial nation’s story is extremely special and
unique. This obscures the fact that many of the broad currents are
amazingly consistent across this majority of the world’s coun-
tries, which also happen to be producing most of the world’s
economic growth right now. The feeling of historical wrong is
common to so many of these places, and produces similarly
belligerent commercial energies. And so is the heritage of 20th-
century socialism, and the accompanying command economy
structures, which I discussed above in the context of Delhi.
They repudiated not only the imperialist tendencies of great
powers, but also the international capitalist system on which
these tendencies were blamed. We need only to think back to the
Bandung Conference to remember how, for so many postcolonial
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REGIONAL POLITICAL ECONOMY
leaders than and afterwards, any independence worth the name
was socialist independence. The wording of the Bangladeshi
constitution was characteristic:
it shall be a fundamental aim of the State to realise through the dem-
ocratic process, a socialist society free from exploitation, a society
in which the rule of law, fundamental human rights and freedoms,
equality and justice, political, economic and social, will be secured
for all citizens.
Compare Libya:
The aim of the state is the realization of socialism through the applica-
tion of social justice which forbids any form of exploitation.
The story of socialism’s rise and subsequent collapse is the
story of the majority of the world. In one form or another, Indi-
ans share this heritage with most of the world’s population:
with China and with the former Soviet Bloc, and with much of
Africa, Asia and West Asia. And let us not discount too quickly
the enormous moral, anti-capitalist project that this entailed.
For several decades of the 20th century, more than half the
world was told every single day that capitalism was evil: it was
theft, it was spiritual death, it produced a small elite which
enslaved everyone else. By the 1980s and 1990s, when so many
failing projects of centrally planned national development
were finally curtailed—often under the auspices of the Inter-
national Monetary Fund (IMF) and World Bank, if not the Cen-
tral Intelligence Agency (CIA)—a global generation or two had
grown up convinced that capitalism represented the purest
form of moral degradation.
Many of these billions kicked socialism cheerfully aside, but
this does not mean that their doubts about capitalism simply
disappeared. They entered into capitalism fully convinced of
its evil. And capitalism—whether in India or Russia, in Ghana
or Indonesia—usually lived up to their expectations. Socialist
propaganda had told them capitalism produced great suffer-
ing and inequality, and indeed that is what they saw. They had
always heard that capitalism produced greed and selfishness
and moral breakdown, and this too turned out to be true. The
point is that none of the social ills that visited the formerly
socialist world from the 1990s onwards created any metaphys-
ical disturbance, because they were exactly what was sup-
posed to happen. Ministers were supposed to use the authori-
tarian systems built up under socialism to amass billion-dollar
fortunes, business persons were supposed to despoil nature
and ruin the people who lived close to it, and anyone who did
okay was supposed to buy a nice apartment and look after
their kids and shut their eyes to the rest. All this was the bar-
gain you made when you accepted capitalism, which would
always remain a foreign and somewhat mystical force.
Loss of Credibility
This is one of the reasons that capitalist reformism remains
rather weak across this zone. In America, Germany and Eng-
land, which created capitalism, it remains “our” system, and
there is a fervent attachment to the better world it can make.
Setting limits to capitalist excesses, and punishing behaviour
which destroys credibility in the system, is a loftily pursued
66
enterprise. But in the countries which suddenly in the 1990s
succumbed to capitalism, like an illness, after all their defences
had been exhausted, there is no such idealism about this sys-
tem. The enormous pain and destruction it has created are just
the way things are, and there is very little one can do. The only
thing you can do, in fact, is ensure you are one of the winners
rather than one of the losers—to throw your lot in with every-
one else, which is the only virtue that counts anymore. All the
old socialist pieties have been thrown out, and with them the
very idea of ideals themselves. If there is such corruption in
these countries—if state resources can be ransacked to the
extent they are in several countries today—it is not just because it
is possible. It is because the state itself—and the political com-
munity it represents—has gone through a catastrophic loss of
credibility. No reason, anymore, therefore, for elites to defer
their own desires in the name of the state’s old pieties: “the
people,” “the poor,” “the national interest,” etc. They have
found a new faith: markets, private wealth and instant gratifi-
cation—and all they want from the state is that it keep the
masses out of their profits, property and way. Socialism is
dead, and all its tedious virtue too. “Self-interest” is too tame a
term for the gleeful bonfire of class assertion that has erupted
in its place.
This is why the regional capitalism of Delhi, which I descr i-
bed above, is not a minor energy at all in the world today. Of
course, on the one hand, it has learned well how to interface
with United States business and capital, and in this sense it has
abandoned some of its more provincial ways. But on the other
hand it has realised that the particular skills it possesses—the
skills of infiltrating the political machine, the skills of using
licit and illicit money, or legal and extralegal techniques—
open up an immense zone of economic operation that is largely
closed, say, to American corporations. North Indian business
persons have understood that their “region” is in fact most of
the world—and precisely that part of the world that is growing
the fastest—and they have found it is even easier to get locals
kicked off land in Ethiopia than it is in Uttar Pradesh.
EPW Index
An author-title index for EPW has been prepared
for the years from 1968 to 2012. The PDFs of the
Index have been uploaded, year-wise, on the
EPW website. Visitors can download the Index for
all the years from the site. (The Index for a few
years is yet to be prepared and will be uploaded
when ready.)
EPW would like to acknowledge the help of the
staff of the library of the Indira Gandhi Institute
of Development Research, Mumbai, in preparing
the index under a project supported by the
RD Tata Trust.
novemBER 18, 2017 vol liI no 46 EPW Economic & Political Weekly