Since the economic reform process of the ’90s, two parallel processes are transforming the Indian state: shrinking opportunities for patronage in the urban economy and

expanding opportunities for patronage in the rural economy. This may well produce two parallel forms of politics in urban and rural areas: an issue-based form of politics in our cities and towns and an identity-based form of politics in our villages.  

The urban economy is dominated by the industrial sector, where patronage opportunities have declined post-1991. The government no longer sets quotas, and licences are fewer and more transparently allocated. The state remains involved in land transactions and in regulatory activity and in a large public sector; but it is smaller now in the urban, industrial economy than ever since Independence and it will probably continue to shrink.

The rural economy is a different story. Here, the reforms have been accompanied by an expansion of patronage opportunities associated with the state, especially during the term of the outgoing government. The UPA introduced a major expansion of the state in rural areas, both through new schemes such as the National Rural Employment

Guarantee (NREGA) and the Rashtriya Swasthya Bima Yojana and through continued implementation of schemes introduced by previous governments, such as the NDA’s Prime Minister’s Gram Sadak Yojna. 

Despite the best efforts of their designers, schemes like NREGA are still riddled with loopholes in implementation. This has expanded opportunities for patronage in the rural economy; and, since both major formations promise an expansion of rural state-led schemes through expanded subsidies on food, credit schemes, state-provided rural infrastructure, and a revamped PDS, among others, rural patronage opportunities should further expand too. 

... contd.