ABHYUDAYA

To prosper in life
To grow.
Phases of Indian Economy
Pre-colonial period
British colonisation
Post Independence in 1947 to 1991
After Liberalization, Privatisation &
Globalisation
Indian Economy Before British Rule
India had the world's largest economy from the
1st to 11th century, and in the 18th century
32.9% share of world GDP in 1000 AD
28.9% share of world GDP in 1500 AD
24.4% share of world GDP in 1700 AD

Source: The World Economy: Historical Statistics, Angus Maddison

Trade Flourished
Trade Flourished
Economy during 16th Century
Mughal India was the
second largest economy
in the world.

The GDP of India in this

century was estimated at
about 24.5% of the world
economy, in comparison
to China's 25% share.
Economy during 17th Century
The annual revenue of
Emperor Akbar's was
£17.5 million
Great Britain in 1800,
which totalled £16
million.
The GDP of Mughal
India was estimated at
about 22.6% of the
world economy.
Akbar's Royal Chamber
Source image :http://www.flickr.com/photos /
 Economy during 18th Century
Annual revenue the
Emperor Aurangzeb
exceeded £100 million.

 India emerged as the

world's largest economy,
followed by China and
Western Europe

Image Source : http://historicalsofindia.com/images/agra-fort-agra.jpg

Impact of British Rule
India become a target market
India's colonisation by
the British coincided
with major changes in
the world economy.
Industrialisation, and
significant growth in
production and trade.
India had become
market for superior
finished European
goods.
Policies of the British Raj
The economic policies
of the British Raj
effectively bankrupted
India's large handicrafts
industry .

Caused a massive drain

of India's resources.
End of colonial rule
 India's share of the world
income fell from 22.6% in 1700,
comparable to Europe's share of
23.3%, to a low of 3.8% in 1952.

 Industrial development stalled

 Agriculture unable to feed a

rapidly growing population,

 Lowest life expectancies, and

low rates for literacy.

Source : An estimate by Cambridge University historian Angus Maddison reveals

Development for accomplishing their trade &
exploit the Indian Market
Railways & Telegraph
Post
 EVOLUTION
OF
INDUSTRIAL
POLICY IN
INDIA

After
Independence
Independence to 1991
Influenced by the colonial experience which was seen by
Indian leaders as exploitative in nature.

 Policy tended towards protectionism.

Many industries were nationalization in the mid-1950s.

Licences, regulations and the accompanying red tape,

commonly referred to as Licence Raj.
Voice of the Industry
Excerpts from interview of Rahul Bajaj to
business line newspaper dated 15th August 2007
Japan, South Korea have
protected and developed their
industry.

MNC’s were not allowed to

invest in Japan, imports of
vehicles was restricted

Import duties and non-tariff

barriers were extensive.

Our policy during the 1950s

and 1960s was correct.
Excerpts from interview of Rahul Bajaj
Globally Competitive
 Risked becoming an economy
which had companies with
screwdriver operations.

 Such companies exist even today

in some countries like Egypt and
Pakistan.

 Many companies benefited as a

result of this policy and used it to
acquire size which after 1991
helped them become globally
competitive.
Transformation of Indian Industry
 Restrictions on imports.

 Collaboration with their

principals and entered the field
of manufacturing.

 Transformation from trading to

manufacturing .
Green Revolution
 More than 2300 high yielding, hybrid
varieties of food grains have been
developed.

 World’s first hybrid cotton, pearl millet,

the first hybrid sorghum, the first hybrid
castor, the first hybrid mango are some
of the amazing achievements.
Between 1960 to 2000

Production of rice Wheat production went up

increased from 35 to 89.5 from 11 to 75 million
million tonnes. tonnes

Problem of plenty, with Government go

downs overflowing with wheat stocks.
Yellow Revolution
Increase in production of
different oilseeds.
Imports of oilseeds
eliminated .

In 1993-94 foreign

exchange worth Rs 24633.5
million was earned
through the export of
oilmeal and oilcake.
Blue Revolution
Enhanced fish
production from 0.75
million mt in 1951 to 5.4
million mt in 1997.
Function of a development bank
To provide the financial infrastructure necessary
for industry, the Government set up a number of
development banks.
• Industrial Finance Corporation of India (IFCI) (1948)
• Industrial Credit and Investment Corporation of India (ICICI) (1955)
• Industrial Development Bank of India (IDBI) (1964)
• Industrial Reconstruction Corporation of India (1971)
• Unit Trust of India (UTI) (1963)
• Life Insurance Corporation of India (LIC) (1956).
Training & Development Skills
It also set up Indian Institutes of
Technology, National Institute
of Technology, Management
Institutes and Engineering
Colleges to train persons with
higher management and
technical skills.

We have therefore had no

shortage of skilled manpower to
cater to the growing
requirements of industry.
BACKWARD AREA DEVELOPMENT
 Before Independence, industries
were mostly located in and around
port cities like Mumbai, Kolkata or
Chennai.

 Baroda, Coimbatore, Bangalore,

Pune, Hyderabad, Faridabad, Rajkot,
and many others, grew up as new
industrial cities.

 The Central & State Government

selected a few backward districts and
offered capital subsidy for industries
set up in these areas.
SCIENTIFIC RESEARCH
The State set up 48
national laboratories to
undertake applied
research in chemistry,
physics, electronics,
botany, etc.,
why India went for liberalisation?
What happened in 1991
India started having balance of payments
problems since 1985, and by the end of 1990, it
was in a serious economic crisis.

The government was close to default, its central

bank had refused new credit and foreign exchange
reserves had reduced to the point that India could
barely finance three weeks’ worth of imports.
Metamorphosis
controller to regulator
The catalyst required to transform the economy through badly
needed reforms to unshackle the economy.

Controls started to be dismantled, tariffs, duties and taxes

progressively lowered, state monopolies broken, the economy
was opened to trade and investment,.

private sector enterprise and competition were encouraged and

globalisation was slowly embraced.
TRAI
Telecom regulatory
Authority of India

Ministry of Communications
& IT; Department of
Telecommunications

To make measures to

facilitate competition and
promote efficiency in the
operation of
telecommunication services
SEBI
SEBI – Securities &
Exchange Board of India

Ministry of Finance;
Department of
Economic Affairs

To protect the interests

of investors in securities
IRDA
Insurance Regulatory
& Development
Authority

Ministry of Finance

To protect of the

interests of the policy
holders
Petroleum and Natural Gas Regulatory
Board
Ministry of Petroleum
& Natural Gas

To protect the interest

of consumers by
fostering fair trade and
competition.
Why market should not be allowed to
have complete freedom
The motive of all business entities is to make profit and an
unbridled economy will lead to a huge problem where
people are treated as commodities.

The companies will swindle the people

The free market will not care for every section of the
society.
Why market should not be allowed to have complete freedom ?

No airline will fly to Will Fed Ex and Blue Dart

northeast if the ministry deliver letter at Ladakh,
doen’t put a condition Leh and tribal areas, you
need India Post
Why market should not be allowed to have complete freedom ?
 We need STATE to prevent
US companies from
patenting Basmati rice as
“Texmati” and patent use of
turmeric for cosmetics

We need STATE to prevent

farmers suffering from
Genetically Modified
“Terminator Seeds”
Conclusion
THANK YOU

Lets salute our STATE …..

 Be Proud for our progress and the position we are in today

Lets together give a standing

ovation for the STATE.