Surplus Without Sovereignty: Nehru’s Fears Return in Today’s India
India's National Flag at Kartavya Path on the Republic Day celebrations (Image PIB)
From the East India Company to domestic oligarchs, India’s Republic Day raises an old question: who really controls the surplus—and the state?
By SAHASRANSHU DASH
Sheffield (United Kingdom), January 26, 2026 — As India celebrates 76th Republic Day, public invocations of sovereignty once again fill official speeches and televised ceremonies. Yet what most decisively shaped the thinking of India’s first generation of policymakers was not, as is often alleged, an ideological romance with socialism, but a hard-headed anxiety about sovereignty itself: the fear that economic abundance could coexist with political helplessness, and that a comprador elite might once again mortgage national power on behalf of organised capital.
India, after all, was conquered not by a crown but by a joint-stock company, abetted by local financiers—a leveraged buyout, avant la lettre. For Jawaharlal Nehru and his cohort, political independence without control over the commanding heights of the economy risked reproducing a familiar historical pattern: economic surplus without national sovereignty, and productivity without agency.
Fiscal Fragmentation and the Commodification of Authority
This fear was not abstract or doctrinaire; it was historical. On the eve of Plassey, despite still accounting for roughly a quarter of world GDP, India lacked a coherent or centralised state. It was a vast, internally diverse agrarian-commercial economy in which surplus was plentiful but weakly consolidated into sovereign power. In fact, late Mughal and post-Mughal India were characterised less by economic collapse than by political disaggregation. Revenue rights were fragmented, military power was increasingly privatised and sovereignty itself became negotiable through tax-farming, debt and patronage.
The jagirdari system, particularly in its late Mughal degeneration, exemplified this separation. Jagirs increasingly functioned not as administrative obligations but as transferable claims on revenue, detached from responsibility for governance or defence. As imperial authority weakened, revenue farming expanded: the right to extract surplus was auctioned to intermediaries who advanced cash to rulers in exchange for short-term fiscal control. Political authority thus became a lease, monetised in advance and liquidated at the peasant’s expense. Sovereignty was no longer a public good but a tradable asset, pledged against future extraction. A political economy in which power was exercised through brokerage rather than consolidation suited the temperaments of Sir Thomas Smythe, James Lancaster and the like.
Alongside this fiscal fragmentation emerged powerful banking houses—the Jagat Seths and their counterparts—whose significance lay not merely in wealth but in positionality. These financiers operated across regimes, extending credit to Mughal officials, regional rulers and European companies alike. Their profits derived from mediation, not autonomy: from arbitraging between contending authorities rather than in anchoring any single sovereign project. By definition, political outcomes mattered less than continuity of extraction. In this sense, a comprador class was already fully formed before the arrival of colonial rule: an elite whose material interests lay in keeping sovereignty negotiable, liquid and collateralised.
Military power, too, was increasingly intermediated. The decline of a unified imperial army gave way to military entrepreneurship: mercenary forces, semi-private commanders and officers-for-hire whose loyalty followed pay rather than polity. Armies were financed through short-term revenue assignments and credit, further entangling coercion with finance. Violence was abundant, but it was not sovereign. Surplus, capital, and force all existed, yet none were consolidated into a political authority capable of resisting capture.
It was this fractured order—and the intermediary class it sustained—that created the opening for the East India Company. The Company did not need to conquer India wholesale; it could buy revenue streams, inherit fiscal machinery and arbitrage between elites who had already learned to treat sovereignty as a tradable asset. Corporate rule thus emerged not from the destruction of a strong state, but from the capture of a weakened one—through the mutual reinforcement of foreign capital and a local comprador class whose interests lay in mediation rather than autonomy.
Democracy as Anti-Comprador Strategy
What Nehru grasped was that this was not merely a colonial pathology but a recurring structural danger. Wherever surplus is detached from political authority, an intermediary class will arise to trade sovereignty for profit. Nevertheless, the fact that his response foregrounded democracy, civil liberties, and parliamentary contestation is precisely what distinguishes Nehruvian socialism from Soviet imitation. Where Soviet socialism sought to contain capital by absorbing society into the state, Nehruvian socialism attempted something riskier and more Indian: to contain both capital and state power by rooting sovereignty in democratic contestation, so that neither could be monopolised by a single elite. Democracy was not a civilisational flourish but a structural necessity: in a society historically ruled through intermediaries, mass contestation was the only mechanism capable of constraining, delaying, and occasionally reversing comprador capture, even as it remained perpetually vulnerable to it.
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That anxiety has proven prescient. Post-1991 liberalisation promised prosperity, but corporate power now scripts India’s domestic and foreign policy to serve oligarchic interests—Adani, Ambani, Tata and others—often against popular welfare and national interest. This is peripheral capitalism reimagined: not foreign ownership but domestic oligarchies conscripting the state apparatus to their balance sheets.
Capture operates through specific channels. Electoral bonds entrenched opaque corporate funding, aligning political competition with capital before elections occur. The Election Commission normalised this through procedural compliance and strategic silence. Democratic form persists but agency is hollowed out.
Regulatory institutions exhibit similar logic. Environmental clearance, energy pricing and infrastructure regulation haven’t disappeared but been selectively retooled. Oversight is diluted, compliance retrofitted and risk socialised. The judiciary has largely abandoned its counter-majoritarian role through deferential jurisprudence and prolonged inaction, insulating large corporate actors from scrutiny whilst maintaining legal appearances. This produces asymmetric governance: politically favoured conglomerates are shielded from accountability by institutions designed to restrain them.
Infrastructure monopolies over ports, airports, power grids and logistics confer strategic leverage beyond mere rents. These chokepoints reshape policy from within, giving corporations bargaining power over the state itself.
Foreign policy exemplifies this dynamic. India’s post-2022 Russian crude purchases weren’t about strategic autonomy but arbitrage through Reliance’s Jamnagar refinery, engineered for heavy sour crude. Indians gained nothing at the pump whilst Ukrainian civilians died. Venezuelan crude purchases—through US-controlled mechanisms recognising Washington’s seizure of sovereign assets—potentially expose India to pillage charges. New Delhi’s silence on Palestinian destruction continues even as Adani deepens ties with Israel’s Elbit Systems amid widely recognised genocide. Media ecosystems shaped by Adani, Subhash Chandra and Rajeev Chandrasekhar normalise Islamophobia and securitised nationalism, manufacturing ideological consent for elite accumulation and geopolitical complicity.
Domestically, mining and infrastructure contracts drive Adivasi displacement and ecological devastation. Agriculture illustrates surplus without agency most clearly: contributing 18-20% of GDP and employing 40% of workers, farmers face stagnant incomes despite growing output. India produces wheat surpluses rivalling Russia-Ukraine combined, yet over half of agricultural households are indebted and tens of thousands have committed suicide. Surplus is extracted through supply chains dominated by fertiliser-seed oligopolies, procurement cartels and traders.
Debt-driven financialisation extends this logic economy-wide, replacing the old Jagat Seth comprador logic in new bottles. Growth decouples from wages, re-anchoring in asset inflation and household debt. Corporate profits soar whilst savings fall and indebtedness deepens. Surplus capitalises into valuations and leverages further accumulation rather than funding productive capacity or public goods. Citizens become borrowers and consumers without voice.
Across sectors—energy, defence, media, mining, agriculture—capital no longer merely influences the Indian state, but actively disciplines it, much as Nehru feared. Policy, diplomacy, and public discourse are subordinated to private accumulation strategies, while democratic institutions hollow out into procedural shells. The only real change has been at the level of pigmentation: the locus of corporate power is now domestic rather than foreign. But the loss of sovereignty—and the helplessness it breeds—stings no less when the old grammar of extraction and repression is translated from eighteenth-century English into twenty-first-century Gujarati.
To be sure, India’s trajectory is neither inevitable nor unique. On the one hand, South Korea demonstrates a contrasting model in which the state disciplined capital through export targets, conditional credit and the credible threat of failure. Capital was powerful, but subordinate to national accumulation goals demanded by a democratic polity. On the other, Brazil illustrates a more oscillatory path: moments of autonomy punctuated by re-oligarchisation and financial capture, producing democratic instability. Democracy alone does not dissolve comprador power—but can make it more accountable and much less absolute.
What Nehru feared was never socialism’s absence, but sovereignty’s erosion—and contemporary events suggest he was right to worry. Yet his hope in a citizenry empowered through democracy might yet learn how to be vocal and reverse the slide into the abyss.
(This is an opinion piece. Views expressed are author’s own.)
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