Economic reform in India is something which is under close study. The phrase is commonly used to describe the events, post-1991. The country however has seen a number of distinct eras, which had definite differences from the economic practices of the previous eras. In a sense, economic reform can be said to have started with the first large scale integration of the country from many small kingdoms and provinces to a large entity under one government. Jump to: navigation, search 1991 (MCMXCI) is a common year starting on Tuesday of the Gregorian calendar. ...

Economic Reform in India can be primarily divided into the folowing eras.

1. The Pre-British Era
2. The British Era
3. The Nehruvian Era
4. The Nationalist Era
5. The Post-Reform Era

Jawaharlal Nehru (जवाहरलाल नेहरू) (November 14, 1889 - May 27, 1964), also called Pandit (Teacher) Nehru, was the leader of the (moderately) socialist wing of the Indian National Congress during and after Indias struggle for independence from the British Empire. ...

The Pre-British Era

This was a period in Indian history where for the fist time, large areas of the land was brought under the control of a single entity either the Lodhis, The Suris or the Mughals. Though coinage and commerce with neighboring states was practiced, it is in this era that noticeable use of Macroeconomic stimuli like building of roads, tombs and gardens was introduced (most likely unconsciously). Large scale building projects like the Grand Trunk Road (2500 kilometers long - 16th Century), Tuglakabad, Fatepur Sikri, Taj Mahal were carried out in this period. This lead to urbanization of alternate locations and creation of skilled labor pools, concentrated around these cities. This process started with the Suris (notably Sher Shah Suri) and ended with Aurangazeb. THE LODHI DYNASTY / TRIBE THE LODHI DYNASTY The Afghan Lodhi dynasty ruled over the Delhi Sultanate and included the prominent ruler Ibrahim Lodi. ... Suri is the name of a sedentary pastoral Nubian tribe and its Nilo-Saharan language in southwest Ethiopia, near the Sudan border. ... The Mughal Empire (alternative spelling Mogul, which is the origin of the word Mogul) of India was founded by Babur in 1526, when he defeated Ibrahim Lodi, the last of the Delhi Sultans at the First Battle of Panipat. ... Coinage is: currency The right or process of making coins The creation of a neologism, or new word; see word coinage This is a disambiguation page — a navigational aid which lists other pages that might otherwise share the same title. ... The Grand Trunk Road (abbreviated to GT Road in common usage) is the Indian Subcontinents first, largest and oldest major road, linking Sonargaon in Bengal (now in Bangladesh) with Kabul in Afghanistan via the Khyber Pass. ... Jump to: navigation, search The Taj Mahal. ... Jump to: navigation, search This article needs to be cleaned up to conform to a higher standard of quality. ... Abul Muzaffar Muhiuddin Muhammad Aurangzeb Alamgir (November 3, 1618 - March 3, 1707), also known as Alamgir I, was the ruler of the Mughal Empire from 1658 until 1707. ...

The British Era

Even under the Delhi rulers, India was not fully integrated under one government. The Western and Southern parts of the country were still outside the influence of the Delhi empire. With the arrival and the rapid establishment of the British East India Company as a single trading block, the economic landscape changed. With the Company influencing decisions in different parts of the country, there was a general direction given to the governance and to the economy as such. The British soon formalized the colonization of the country and with this, the economic policies began to reflect those of the British Empire. Jump to: navigation, search This article deals with the city of Delhi. ... Jump to: navigation, search The British East India Company, sometimes referred to as John Company, was a joint-stock company of investors, which was granted a Royal Charter by Elizabeth I on December 31, 1600, with the intent to favour trade privileges in India. ... It has been suggested that this article or section be merged with Colonialism. ... Jump to: navigation, search The British Empire in 1897, marked in pink, the traditional colour for Imperial British dominions on maps The British Empire was the worlds first global power and the largest empire in human history, a product of the European Age of Exploration that began with the...

Large scale trading with other countries, formation of industries like textile and steel happened in this era. This also saw the discovery of petroleum and the setting up of a refinery in Digboi, Assam.

The British Era was characterized by the country growing into an economic block and also by industrialization of many parts of the country notably Bombay (now Mumbai), Calcutta (Kolkata) and Madras (Chennai). This article or section should be merged with Mumbai Mumbai (previously known as Bombay) is the worlds most populous conurbation, and is the sixth most populous agglomeration in the world. ... This article is on Calcutta/Kolkata, the city. ... Madras refers to: the Indian city of Chennai, formerly known as Madras, the former Indian state, now known as Tamil Nadu (Plural of Madra): Ancient people of Iranian affinites, who lived in northwest Panjab in the Uttarapatha division of ancient India. ...

The Nehruvian Era

This era started out with the independence and was marked by a high degree of uncertainty with respect to the direction the country had to take. Nehru was enamoured by the Socialist model of development and envisioned an economy directed by the government. The country under him adopted the Socialist model of development. This marked, in a sense, a reform from the British economic model. Under this model a Planning Commission was set up and a process of generating Five-Year Plans was initiated. Jump to: navigation, search Five-Year Plans or Piatiletkas (пятилетка) were a series of nation-wide centralized exercises in rapid economic development in the Soviet Union. ...

The central idea was that the country had to progress in orderly steps. The first plan focused on Agriculture and the second on Industries. Though Agriculture remained shackeld by lack of labor reform, industrialization picked up in a big way. The large industrial institutions that today form the Navratnas had their roots in this period, either as separate companies or as departments in the respective ministries.

Macroeconomically, this period was important in that the country saw a large amount of investment in the infrastructure sector. This period saw large projects like dams, steel plants, refineries, fertilizer plants, hydel power stations etc. being built. This era also saw the establishment of the premier education institutes of India, like the Indian Institute of Technology, the Regional Engineering Colleges, which focused on development of human capital. These institutions of this era have formed the backbone for supply of the manpower to the technology sector. Indian Institutes of Technology (IITs) are the premier educational institutions for science and technology spread all over India . ... Regional Engineering College (RECs) are premier schools of engineering and technology education in India. ...

The initial success was not matched and the country was not able to generate enough capital to sustain growth. Planning estimates often went awry and delays became commonplace. Subsequent to the Chinese War of 1962 the economy was in shambles and the reform in agriculture had failed. India by this time had to depend on aid of food from the US and other countries. The PL-480 wheat from the US had become a symbol of the collapse of this mode of development. 1960 alone saw $1524 Million in aid from USAid. [1]

The Nationalist Era

The period after Nehru was politically fluid and notable reforms did not happen immediately. After Indira Gandhi became the Prime Minister, the economic process in the country changed direction. Till this period, the state was primarily a planner of the growth, with high degree of private participation. From this period onward the state became the planner and the executor of macroeconomic policies. Jump to: navigation, search Indira Priyadarshini Gandhi (इन्दिरा प्रियदर्शिनी गान्धी) (November 19, 1917 – October 31, 1984) was Prime Minister of India from January 19, 1966 to March 24, 1977, and from January 14, 1980 until her assassination in 1984. ...

This period saw the success of the Green Revolution which effectively freed India from starvation. There was lesser dependence on aid.

Mrs. Gandhi had a deep suspicion of foreign companies and this lead to the nationalization of all foreign owned companies. Primarily the nationalization was done in the Banking and the Refining Sector. This period saw the formation of large companies in these sectors. Notably Indian Oil Corporation, Hindustan Petroleum, Bharat Petroleum. The State Bank of India became a parent organization for these banks and all banking was brought under the Reserve Bank of India. State Bank of India (SBI) is the largest bank in India. ...

During the seventies, India moved closer to the Socialist bloc and the development was often in collaboration with these countries. A number of Indian companies tied up with Russian or Soviet Bloc companies to manufacture products in India. This lead to some degree of high technology finding its way into the Indian industries. However, this period was characterized by the near total withdrawal of Western companies from India.

Despite near complete food sufficiency, this period saw very little overall development of the country. An emergency saw a change of government resulting in a non-Congress coalition forming the government. This government introduced a Two-Year planning process understanding the requirement of faster change in plan allocations. The government collapsed and the later government under Mrs. Gandhi went back to the five-year plans.

The major successes in this period were the development in space and nuclear frontiers.

After the assasination of Mrs. Gandhi in 1984, Rajiv Gandhi became the Prime Minister. The overwhelming majority for this government allowed for some bold deisions on the economic front. This period saw the opening up of the telecom sector and the focus on high-technology. Jump to: navigation, search Rajiv Gandhi (राजीव गान्धी) (August 20, 1944 – May 21, 1991), the first son of Indira and Feroze Gandhi, was the Prime Minister of India from his mothers death on October 31, 1984 until his resignation on December 2, 1989 following a general election defeat. ...

Though there were some positives, the general impact of this period has been largely negative. Investment stagnated and to fund government investment, tax rates were very high, (more than 50% in some cases). The savings rate was also poor. To further fund and sustain its expenditure, government had to rely on internal and external debt. The debt figures were huge and most of the new aid and debt was going towards servicing these debts.

The First Gulf War saw high oil prices and the Indian economy, largely dependent of Gulf oil was on the verge of collapse. There was a debt repayment crisis and the forex reserves were near zero. This period saw India pledging its gold to boost up reserves. With this balance of payment crisis the nationalist period also came to an end. Jump to: navigation, search C Company, 1st Battalion, The Staffordshire Regiment, 1st UK Armoured Division The 1991 Gulf War was a conflict between Iraq and a coalition force of 34 nations mandated by the United Nations and led by the United States. ...

The Post-Reform Era

The balance of payment crisis in the early 90s prompted a re-think on the economic direction that the country was taking. In 1991, the Forex reserves of the country went down to as low as $ 1 Billion (enough for just 2 weeks of imports) and the inflation touched 17% in the month of August. The fiscal defict was nearly 10% of the GDP and the Current Account Deficit nearly 3% of the GDP. Unlike earlier economic crisis felt, which were primarily of supply in nature, this was an monetary crisis.

The response to this crisis was measured and comparitively painless on the economy. India undertook short term stabilization measures and long term economic reform in the wake of this crisis.

In the short term, India engaged in some stabilization measures. The primarily included, pledging of gold to meet short tem payment, a de-valuation of the rupee, tightening of imports, change in monetary policy and some international loans. This process succeeded in ensuring that the crisis was tided over.

Once the short term was delt with India embarked on structural reform of the economy.

References

1. Indira Rajaraman; Recent Economic Reforms in India [2]

2. Vijay Kelkar; India’s Reform Agenda: Micro, Meso and Macro Economic Reforms [3]

3. Lawrence R. Klein , T. Palanivel: Economic Reforms and Growth Prospects in India[4]