The economic growth in India after independence is a remarkable testimony to the rule of a democratic government over a prosperous nation. It is also a testimony of the immense contribution that the progressive and liberalizing revolution made to the economic development of India. Economic progress and development have in no way rested on the shoulders of anyone.
History and tradition tell us that it was the British that first brought in foreign trade and that the country enjoyed the greatest economic growth after independence. A glance at the history of India will show that the British played a crucial role in the economic development of India. They were the main force behind the creation of different states such as Bombay, Madhya Pradesh, Rajasthan and Uttar Pradesh. All these states are today important economic centers of India.
Economic historians trace the origin of the Indian economy to the age of enclosure. In this era, the economy was strictly controlled by the boundaries of the various kingdoms. For example, there were certain limits to the trading with Rajasthan, which set up a system of regional pricing based on grains and livestock. This led to a division of labor, agricultural land and capital in the country. This led to the establishment of different classifications of castes in the society.
There was a time when all goods and services were priced in terms of gold or silver or gold and silver. However, with the passage of time, economic growth experienced an enormous boom in the economy. With this development came a change in the meaning of money became a representative of value. With the liberalization movement in the country, the economy witnessed another great leap forward. The liberalization policy was accompanied by open access to capital, which was for long only enjoyed by the elite classes of the society. In fact, even the scheduled castes and scheduled tribes were allowed to get involved in the stock market and invest in the money market.
After independence, the Indian economy underwent yet another transformation. A new process of globalization took place in the economy, which allowed Indian currency to be traded globally. Thus, the local currency was transformed into a global currency. India became an economic powerhouse after this change in the economic system. The liberalization policy further enabled the government to pursue its industrialization agenda. The industrialization policy pursued by the government led to a complete transformation in the economic structure of the country, including an influx of capital from abroad and liberalizing the trade system.
Growth in India after independence was highly dependent upon foreign trade and the liberalization policy pursued by the Indian government in the foreign trade field promoted economic growth in the economy. Furthermore, liberalization policy promoted investment in the domestic market through various public-private partnership (PPP) projects, which contributed a significant role in economic growth. These factors combined, making India one of the fastest developing countries in the . . . . . . field of economic development.
After independence, the economy experienced a rapid economic growth. However, this growth moderated after the onset of recession in the late 1970s. Economic inactivity resulted in a decline in real estate prices, slowing down the construction industry in the country. Real estate developers largely pulled out from the market, which resulted in a reduction in the supply of property. Consequently, the demand for property was not able to keep up with the increase in supply, thereby causing a sharp fall in the prices of properties. The impact of these economic setbacks on the construction industry was thus felt and moderate economic growth came down to two percent annual rate in the later years of Independence.
But, this is no longer the case. Today, India has established itself as one of the most economically sound countries in the world. Real estate prices have recovered from their nosedive situation. The financial resources of the Indian government are now easily available to finance big projects and help small businesses. The rise in demand for property has also led to rise in construction of new projects, which have further resulted in even better scenario for the economy. Overall, the scenario today looks promising for economic growth in India after independence.