Indian Economy: Know its Facts & History

Understanding the Indian Economy


The Indian economy is a diverse, complex and vast economy owing to its social diversity, large population and rich mineral deposits. All these factors add to its rapid growth over the years. Understanding the Indian economy is tough. However, let us go through it anyways. 

Introduction

India is emerging as one of the most rapidly growing economies in the world and might be counted among the top three economic powers of the world, in the next 10 to 15 years, owing to its strong democratic and strategic partnerships.

History of the economy

Since ancient times, India had cross-cultural exchanges and trade with many foreign lands.

 Trade routes such as the Silk route, which was used to transport silk and major ports in Gujarat and West Bengal were used for transportation of Indigo, Indian Silk, etc.

The accounts of these trades are ingrained in the works of travellers like Al-Biruni, Fa Hien etc.

The Indian economy suffered a lot under British rule. The Britishers exported raw material from India and imported industry made goods which the local population could not afford.

Also, the huge taxes imposed by the government lead to increasing debt and lowering of wages as unemployment increased.

Post-independence India remained a closed economy. This was in accordance with the view of the government going through a Patriotic Phase.

It was considered that India could stay Self-consumable, due to its large population and low production capacity and imports could compete with local products.

Hence there were massive restrictions on imports; large industries such as Tata Group were targeted as labour exploiters.

The government undertook to manufacture in various sectors which eventually created loss-making enterprises and affected the economy.

In 1991, the government switched to a more liberal economic policy under Manmohan Singh, the then Finance Minister.

Since then, many changes have taken place in the economy.

Current Status of the economy

According to financial reports, India’s GDP increased at a rate of 7.2 per cent in 2017-18 and at the rate of 7 per cent in 2018-19.

The labour force of India could reach 160-170 million by 2020, as estimated by population growth rates.

Read more: What is International Monetary Fund (IMF) & Its Role in World Economy

It is associated with the increment in workforce participation and higher education enrolment, among other factors, as stated in a study done by ASSOCHAM and Thought Arbitrage Research Institute or TARI.

Recently, the foreign exchange reserves reached $426.42billion, its highest ever in history, fuelled by an increase in foreign currency asset.

Future Prospects

 Gross Domestic Product (GDP) is estimated to catch up to US$ 6 trillion by Financial Year 2027 and achieve upper-middle-income status, in the backdrop of digitisation, diplomatic relations, globalisation, and economic reforms.

Demonetisation and Goods and Services Tax (GST) are some of the reforms used by the government, to increase revenue receipts, which are expected to reach up to Rs 28-30 trillion.

India is also moving towards renewable sources for fulfilling its energy requirements. It is working towards fulfilling its target of procuring 40% of its energy from eco-friendly sources by 2030.

With a shift in consumer behaviour and spending pattern, the country is expected to be the third-largest consumer economy (based on Boston Consulting Group (BCG) report).

Hope you got to know something interesting about the Economy of India-its Past, Present and estimated Future.

For more such informative articles stay tuned to OWN TV

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1,703 thoughts on “Indian Economy: Know its Facts & History

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