The Political Economy of Reform Under the UPA, 2004–14: The Tension Between Accumulation and Legitimacy

Abstract

Electoral success during the reform process requires maintaining a prudent balance in meeting the requirements of the two basic state functions of accumulation and legitimacy. Initially, the Congress-led UPA government was the unintended beneficiary of the economic acceleration resulting from a global boom and the earlier economic reforms in aid of accumulation. The growth acceleration, however, also escalated rising expectations. In the effort to advance its legitimacy in order to assure continuance in power, the UPA government emphasized a distributive strategy to the neglect of accumulation. However, the rupture in growth acceleration because of external shock and internal economic mismanagement aggravated the loss of legitimacy stemming from a series of corruption scandals. The consequence was the emergence of an enormous “gap” between rising expectations and the existing reality of economic stagnation and high inflation. It is in the context of this gap that the Congress Party suffered its most severe electoral defeat in history.