Economy: Indian Economy after and Before Indipendence

Ancient Indian Economy

India History of Economy begins with the Indus valley civilization between the eras of 3500BC to 1800 BC. At that time economy depend upon the trade which was facilitated by advances in transport. Its citizens practiced  agriculture, domesticated animals, made sharp tools and weapons from  copper,  bronze and  tin and traded in terracotta pots, beads, gold and silver, colored gem stones such as turquoise and lapis lazuli, metals, flints, seashells and pearls. They used to ships to reach Mesopotamia where they sold gold, copper and jewellery. The period was marked by intensive trade activity and urban development.

During Maurya  Empire (c. 321 -185 BC) united most of the  Indian subcontinent. The political unity and military security allowed for a common economic system and enhanced trade and commerce, with increased agricultural productivity. The empire spent considerable resources building roads and maintaining them throughout India. The improved infrastructure combined with increased security, greater uniformity in measurements, and increasing usage of coins as  currency enhanced trade. Between 1st and 17th centuries AD, India is estimated to have had the largest economy of the ancient and medieval world, controlling between one third and one fourth of the world's wealth.

During the  Mughal period (1526–1858 AD) India experienced unprecedented prosperity in history. The gross domestic product of India in the 16th century was estimated at about 25.1% of the world economy.

GDP in Millions of 1990 International Dollars

Years	1000AD	1500 AD	1600 AD	1700 AD
India	33,750	60,500	74,250	90,750
China	26,550	61,800	96,000	82,800
West Europe	10,165	44,345	65,955	83,395
World Total	116,790	247,116	329,417	371,369

British rule

The British East India Company, whose political power gradually expanded in India from 1757 onwards, used huge revenue generated by the provinces under its rule for purchasing Indian raw materials, spices and goods. Thus the continuous inflow of bullion that used to come into India on account of foreign trade stopped altogether. The Colonial government used land revenue for waging wars in India and Europe leaving little for development of India. In short span of 80 years (1780-1860 AD) under Colonial rule, India changed from being an exporter of processed goods for which it received payment in  bullion; to being an exporter of  raw materials and a buyer of  manufactured  goods. More specifically, in the 1750s, mostly fine cotton and silk was exported from India to markets in Europe, Asia, and Africa; by 1850s raw materials, which chiefly consisted of raw cotton, opium, and indigo, accounted for most of India's exports.

After that India's share of the world income went from 27% in 1700 AD (compared to Europe's share of 23%) to 3% in 1950.

INDIA AFTER INDEPENDENCE

1950-1979

After India got independence from colonial rule in 1947, the process of rebuilding the economy started. India went for centralized planning. The Five Year Plans which successfully transformed erstwhile USSR were made a tool for development. First five year plan for the development of Indian economy came into implementation in 1952.

Sectors	Percentage Share in GDP in
	1950-51	2011-12
Primary Sector	59.0	16.1
Secondary Sector	13.0	24.9
Tertiary sector or Service Sector	28.0	59.0

India’s share in world output is projected to jump from 5% as of today to 20.8% by 2040 as per one estimate.

INDIAN ECONOMY – FUTURE PROSPECTS:

India’s share in world output is projected to jump from 5% as of today to 20.8% by 2040 as per one estimate.

World Economy: Future Economic Power Shifts (2008-2040)

(% Share of World GDP in PPP)

	2008	2014	2020	2030	2040
Germany	4.2	3.8	3.4	2.8	2.3
USA	20.4	19.2	17.6	15.3	13.9
Japan	6.2	5.6	4.7	3.7	2.9
China	11.3	16.3	22.2	30.9	37.4
India	4.9	6.3	8.5	14.3	20.8

This future Prospect provide by Indian Government

 

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