Subject: Indian Society

India's transition to a liberal economy in 1991 has significantly influenced ethnic identities and communal relations, creating both opportunities and challenges for social cohesion.

Impact on Ethnic Identity

• Economic Stratification: Post-liberalization has led to uneven development across ethnic groups, with some communities experiencing faster upward mobility while others remain marginalized.

• Cultural Commodification:

  • The market economy has commercialized traditional ethnic practices and customs.
  • Rise of ethnic entrepreneurship through specialized markets catering to specific community needs.

• Identity Assertion:

  • Growing middle class among minorities has led to increased demands for representation in economic spheres.
  • Enhanced social media presence has strengthened ethnic networking and cultural preservation.

Impact on Communalism

• Economic Disparities:

  • According to CSSS data, communal incidents increased by 84% in 2024 compared to 2023, partially attributed to economic competition.
  • Limited occupational mobility across three generations for disadvantaged groups has intensified communal tensions.

• Political-Economic Nexus:

  • Economic insecurities are often exploited for political mobilization along communal lines.
  • Competition for limited resources has sometimes manifested as communal conflicts.

State Response and Welfare Measures

• Targeted Welfare Programs:

  • Telangana allocated ₹3,591 crore for minority welfare in 2025-26, up from ₹3,003 crore in 2024-25.
  • Karnataka increased minority welfare allocation by 33% to ₹4,535 crore in 2025-26.

• Institutional Mechanisms:

  • Implementation of Equal Opportunity Commission recommendations.
  • Focus on inclusive growth through targeted skill development programs.

The post-liberal economy's impact on ethnic identity and communalism requires a balanced approach through Sabka Saath, Sabka Vikas (inclusive development) and strengthening of constitutional values like secularism and equality. The success of initiatives like Stand-Up India and Pradhan Mantri Jan Vikas Karyakram demonstrates the potential for inclusive growth while preserving ethnic identities.