75 Years of India’s Independence: A Temporary Historical past of the Indian Financial system

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India received independence from British rule on 15 August 1947. After attaining political independence, India’s founding fathers confronted a path stuffed with challenges on each the social and financial fronts. The political management began the journey with the hope of creating the nation self-reliant economically and politically.

Initially, famine and starvation prompted India to hunt exterior assist a number of instances for its meals safety. Illiteracy was one other main backwardness for the financial system. On the time of independence, the inhabitants of India was about 34 crores and the literacy price was solely 12 % or about 40 million. Different challenges had been low financial potential because of stagnant agricultural progress and a poor industrial base.

A long time after independence, Manmohan Singh, India’s former prime minister, as soon as famously mentioned: “The brightest jewel within the British Crown” was the world’s poorest nation by way of per capita revenue within the early twentieth century.

For the reason that nation received independence in 1947, it has gone by way of many ups and downs in its financial system like agrarian disaster, three wars, 1991 privatization transfer, demonetisation, introduction of Items and Companies Tax (GST) and many others.

Among the highlights of the journey listed here are Indian Financial system,

1951: Former Prime Minister Jawaharlal Nehru introduced the primary five-year plan within the Parliament. It was primarily based on the Harrod-Domar mannequin with some modifications. Its primary focus was to develop the principle industrial space of ​​the nation.

1969: India went by way of its worst drought within the Nineteen Sixties, and needed to rely on the surface world for meals and grain provides. However the disaster got here as a boon and the nation understood the significance of growing self-sufficiency in meals grains and therefore, the Inexperienced Revolution turned a actuality.

1991: The golden interval of India’s financial journey started that 12 months. With the devaluation of the forex, the federal government’s rising fiscal deficit, India’s exterior debt almost doubled from about $35 billion on the finish of 1984-85 to $69 billion by the top of 1990-91. International alternate reserves had dried as much as such an extent that India might barely finance three weeks’ value of imports.

The federal government of PV Narasimha Rao as Prime Minister and Manmohan Singh as Finance Minister introduced a collection of insurance policies that modified the face of the Indian financial system in 1991 – liberalisation, privatization and globalisation.

2008: The biggest chapter in US historical past was adopted by an epic monetary and financial collapse – the recession of Lehman Brothers. Whereas different nations had been going through the worst, the financial progress price in India stood at 6.7 per cent through the monetary 12 months 2008-09. Reportedly, India was much less affected as its exports accounted for simply 15 per cent of GDP.

2016: The time period “demonetisation” was launched within the annals of financial historical past of India. On 8 November that 12 months, Prime Minister Narendra Modi introduced that the Rs 500 and Rs 1,000 notes wouldn’t be authorized tender. Just some months after demonetisation, Parliament handed an essential invoice on the Items and Companies Tax (GST).

2020: The nation sees one other setback within the type of the coronavirus pandemic. In line with a report, the primary wave of the COVID-19 pandemic pushed 23 crore folks under the poverty line. The report mentioned that poverty has elevated by 15 % in rural India and 20 % in city India through the previous pandemic 12 months.

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