Indian Economy & ITS Development

-- Joel Joseph Mathews,VIII-C,Indian Learners Own Academy, Kuwait

During the lndus Valley civilization, the Aryan civilization, Mauryan Empire, Gupta Empire etc.the main source of economy for India was agriculture. The fertile soil, rivers and good climate provided great scope for agricultural production in India. During the ancient times, the farmers and villagers were required to provide a part of their crops or produce to the kings or the landlords.

Even at the times of Muslim rule, the economy of India was primarily based on agricultural produce. Towards the later part of the Mughal era, some trade relations were established between the Mughal Empire and the British, French and Portuguese merchants.

The colonial era of India is a significant part of the Indian Economy history. This period brought a considerable change in the process of taxation, which resulted in large scale economic breakdown. During this period a lot of industries like the Indian handicrafts industry suffered huge losses. During Freedom Struggle movement, the Indian Nationalists propagated the idea of Swadeshi Movement, in which the British products were boycotted.

On the other side, British rule also developed the country to a great extent. The financial and banking system as well as free trade was established, a single currency system with exchange rates was brought into being, standardization of weights and measures happened and also a capital market came into existence. Thrust was also given to the development of infrastructure and new telegraph lines were laid, railway lines and roads were constructed.

The opening of the Suez Canal in 1869 helped in increased trade between India & Europe. India gained independence from the British rule on 15th August 1947.Partition led to lot of economic problems in India. Most of the agricultural and irrigated land was located in Pakistan and led to shortage of agricultural products in India. Moreover railway transport network was disjointed due to partition.

Under the great leadership of Jawaharlal Nehru- the first Prime Minister of India, India slowly started developing its economy. Through Nehru’s great vision, the foundation of Indian economy was laid. The Reserve Bank of India was nationalized in 1948. Finally, the development of new irrigation facilities allowed for an increase in the area of cultivatable land availed to Indian farmers. The Banking Regulation Act of 1949 established the foundations of a sound Indian banking system

The Indian government established the National Planning Commission in 1950.The first five-year plan was launched in the first half of 1951, followed by the second five year plan in 1956,with primary focus on agriculture development. From the third Five year Plan onwards, the thrust was on industrial growth and Steel, Coal, cotton, jute and textile industry started developing in a large scale in India.

From 1980 till 1991, growth of Indian economy slowed down. The economic growth rate in the first fifteen years of India’s planned economy exceeded the economic growth rate in the eight years after economic liberalization policies were implemented in 1991by Dr. Man Mohan Singh. These economic reforms were designed to stimulate other drivers of the Indian economy, such as entrepreneurship and free market forces.

Madhya Pradesh, Rajasthan, Maharashtra, Gujarat, West Bengal and Tamil Nadu experienced the highest rates of economic growth during the period 1991–1998. Economic liberalization gave Indian states greater freedom to pursue individual initiatives associated with attracting domestic and foreign investment. Through Foreign Direct Investment reforms, 100%foreign ownership in Indian industrial sectors was possible in India excluding airlines, banks and insurance sectors
India ranks second worldwide in farm output. As on today, India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest cattle population. It is the second largest producer of wheat, rice, sugar, groundnut and inland fish. It is the third largest producer of tobacco. India accounts for 10% of the world fruit production.
India is also the tenth in the world in factory output.

Economic reforms introduced in 1991 brought foreign competition, led to privatization of certain public sectors, opened up sectors only reserved for the public sector and led to an expansion in the production of fast-moving consumer products.

Since the economic liberalization of 1991 till 2016, India's GDP has been growing at an excellent rate. Major decisions by Indian Government like demonetization and implementation of GST , led to slight economic growth slowdown in 2017-18 and Indian economy it is expected to regain its growth to regain its position as the fastest growing economy in the world. India continues its excellent economic development reforms and as on today, India is the 6th largest economy in the world.

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