Business and Politics in Tamil Nadu (SWP 50)

Contrary to analyses of India’s new model of development that portray influential business groups and politicians as entwined and interdependent, there is strong evidence that the economic success of the state of Tamil Nadu has come about in spite of the actions of politicians rather than with their support. Interviews conducted in autumn 2015 with businessmen in Chennai, together with observations of the practices of state politicians, also do not support the argument that business is able to mold state behavior. Rather, the pro-poor social policies that have been pursued in the context of the competitive populism of the two main Dravidian parties – combined with benign neglect of business groups’ interests – have allowed high growth to be institutionalized in an electoral democracy with large numbers of poor citizens.