Neoliberal Transition and the ‘New’ State Capitalism: The Case of an Indian shadow-bank

Authors: Manasi Karthik*, Johns Hopkins University
Topics: Economic Geography
Keywords: capitalism, neoliberalism, state capitalism, financialization, shadow-banking
Session Type: Virtual Paper
Presentation File: No File Uploaded


In light of debates about the ‘return of the state’ in the Global South, this article examines the financial collapse of a shadow bank in India. In late 2018, the state-owned infrastructure finance company, Infrastructure Leasing &Financial Services (IL&FS), defaulted in what is now India’s largest financial fraud. Ultimately, IL&FS’ default in 2018 revealed an accumulation strategy of socialising risk while swindling the state that resulted in financial fraud.
Following Alami and Dixon (2019), I conceptualise IL&FS as a state-capital hybrid to demonstrate how state-capital entanglements reproduce capitalist crises. I interrogate the concepts of state-led capitalism and finance-led capitalism to argue that this distinction belies an understanding of neoliberalism as a relationship between the state and global financial capital. I examine India’s neoliberal transition to periodise the neoliberal state in India as arising out of the Post-Washington Consensus and highlight the relationship between the state and foreign capital within IL&FS. This suggests that a historically and geographically specific analysis of how the state is itself transformed to reproduce capitalism is more useful than the generalised rubrics of ‘statism’ or ‘state capitalism’ that are being discussed in this special issue.
Manasi Karthik is a doctoral student in Sociology at Johns Hopkins University. She works on state theory and development finance in India from a critical Marxist perspective. Her previous publications have appeared in Geoforum, Conservation and Society, and the Economic and Political Weekly.

To access contact information login