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Indian Economic growth
The document summarizes the history and development of the Indian economy from ancient times to present day. It discusses how the economy was negatively impacted during British colonial rule but began to grow after independence through import substitution industrialization and nationalization of key industries. Economic reforms since 1991 opened the economy to foreign investment and global trade, leading to strong growth rates of around 7% annually over the past few decades and positioning India as the 7th largest economy globally. Recent years have seen some slowing but growth is projected to remain around 7-8% through 2016-17.
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Indian Economic growth
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- 3. Economics is thestudy of how people choose to use resources. Resources include the time and talent people have available, the land, buildings, equipment, and other tools on hand, and the knowledge of how to combine them to create useful products and services.
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- 5. The Economy ofIndia is the seventh- largest in the world by nominal GDP and the third-largest by purchasing power parity(PPP). The country is classified as a newly industrialised country, one of the G- 20 major economies, a member of BRICS and a developing economy with an average growth rate of approximately 7% over the last two decades.
- 6. Indian economy in Britishera 1793–1947
- 7. The economic policiesof the British Raj caused a severe decline in the handicrafts and handloom sectors, due to reduced demand and dipping employment. After the removal of international restrictions, Indian trade expanded substantially and over the long term showed an upward trend. The result was a significant transfer of capital from India to England, which, due to the colonial policies of the British, led to a massive drain of revenue rather than any systematic effort at modernization of the domestic economy
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- 10. Indian economic policyafter independence was influenced by the colonial experience, which was seen by Indian leaders as exploitative, Domestic policy tended towards protectionism, with a strong emphasis on import substitution industrialization, a large government- run public sector, business regulation, and central planning, while trade and foreign investment policies were relatively liberal. Five-Year Plans of India resembled central planning in the Soviet Union. Steel, mining, machine tools, telecommunications, insurance, and power plants, among other industries, were effectively nationalized in the mid- 1950s.
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- 12. The collapse ofthe Soviet Union, which was India's major trading partner, and the Gulf War, which caused a spike in oil prices, resulted in a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans. India asked for a $1.8 billion bailout loan from the International Monetary Fund (IMF), which in return demanded de-regulation.
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- 15. Starting in 2012,India entered a period of more anaemic growth, with growth slowing down to 5.6%. • a plunging Indian rupee, • a persistent high current account deficit • slow industrial growth. Hit by the U.S. Federal Reserve's decision to taper quantitative easing, foreign investors had been rapidly pulling out money from India though this has now reversed with the stock market at near all-time high and the current account deficit narrowing substantially. India started recovery in 2014-15 when the growth rate accelerated to 7.2%. In 2015, Indian went through a startup boom and manufacturing growth skyrocketing due to which the growth in 2015-16 accelerated to 7.6%, which means for the first time since 1990 India grew faster than China which registered 6.9% growth in 2015. The economic growth is expected to be 7.7- 8.0% in 2016-17.In Mid 2015 during the global stock market rout, India also witnessed a sharp fall in stock markets and the rupee weakened. It was repeated again in January 2016.
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