Business and Politics

Abstract

The political economy of Tamil Nadu presents a puzzle: in spite of politics that are generally considered to be unhelpful to development, the state does relatively well in terms both of economic growth and of human development. The chapter argues that Tamil Nadu is neither a developmental nor a social democratic state, while having some of the features of both. It is, rather, characterized by Bonapartism. While the state has generally been supportive of big business, the relationship between the corporate sector and the political elite is distinctly “arm’s-length.” The power and influence of business groups has not “grown enormously,” as has been claimed elsewhere. Tamil politicians do not rely for financial resources on big business but have their own sources of finance, some of them in semilegal or illegal activities such as sand mining and granite quarrying.