INDIA: Economic History and Development

1

Profile
Full Name: Republic of India
Native Name: Bharat Ganrajya
Capital City: New Delhi, Delhi
Largest City: Mumbai

Geography
Location:
South Asia; bordered by the Arabian Sea,
the Bay of Bengal, Burma, and Pakistan
Coordinates: 2000 N 7700 E

Area
Total: 3,287,590 km
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Land: 2,973,193 km
2

Water: 314,070 km2

Demography

Population:
1,210,193,422 (2011)
1.28 billion (2013 estimate)
Growth Rate: 1.28% (2013 estimate)

Brief History
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2500 BC Dravidian civilization
1500 BC Aryans invade India and conquered the Dravidians
1400 BC The Vedas, the Hindu scripture, was written
800-600 BC The sacred scripture, the Upanishads written
518 BC Persians conquered Pakistan
500 BC Jainism was founded in India by Mahavira Jains
326 BC Alexander the Great moved into India
324 BC
The Mauryan Empire was established by Chandragupta Maurya including Afghanistan and parts of
central Asia
272 BC Ashoka, the grandson of Chandragupta Maurya, becomes the emperor of India
185 BC The Maurya Empire ended

1
Central Intelligence Agency. World Factbook: South Asia: India. Retrieved November 10, 2013 from
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
2
History India Timeline. Retrieved December 15, 2013 from http://www.datesandevents.org/places-timelines/22-history-india-
timeline.htm
Wolfram Alpha. India Fast Facts. Retrieved December 15, 2013 from http://www.wolframalpha.com/input/?i=india&t=crmtb01
50 The Kushans established an empire in northern India
320 The Gupta Indian dynasty reunited northern India initiating the "golden Age" of India
700's Muslim armies from Arabia invade India
1206 Qutb ub-din Aybak establishes the Delhi Sultanate
1398 Timur conquered India resulting in the decline of the Delhi Sultanate
1498 Vasco da Gama becomes the first European explorer to reach India
1500's
Christianity was introduced to India by the Europeans and in the early 1500s Sikhism was founded by
Nana
1526 Babur established the Mughal Empire
1600
Queen Elizabeth I granted a charter to the East India Company established trading posts in Bombay,
Calcutta, and Madras
1658 The Strict Muslim, Aurangzeb, ruled India and tried to force Hindus to convert to Islam
1774 Warren Hastings appointed the first governor general of India by the East India Company
1857 The Sepoy Rebellion
1858 The British government ruled India via an Indian Viceroy- called the British Raj
1876 Queen Victoria was given the title Empress of India by the British Parliament
1885 Burma became an Indian province
1905 The British government divided Bengal into separate Hindu and Muslim sections
1920
Mohandas Gandhi became the leader of the Indian independence movement and the Indian National
Congress
1935 The Government of India Act and the creation of a new constitution
1940
Muhammad Ali Jinnah demanded that a new country be formed from India for the Muslims, which
would be called Pakistan
1946 The British government agreed to grant India independence
1947 British and Indian leaders agreed to divide the country into India and Pakistan
August, 1947 India became independent
January, 1948 Gandhi was assassinated
January, 1950 A new Indian Constitution was ratified and Jawaharlal Nehru became the Indian first prime minister

History of Economic Development
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Indian economy before the colonial period. The Indus Valley Civilization, which historians believe to
have flourished between 2800 BC until 1800 BC, revolved around trade between different cities, alongside their
citizens' applications of agriculture, animal husbandry, and weaponry. Precious stones and metals were sold, as
well as, pottery from terracotta. They are also known to have developed a uniform system of weights and
measures. By 600 BC, the Mahajanapadas minted coins out of silver.
India had been successful to develop international trade since as early as the first century BC.

3
India Text. History of Indian Economy. Retrieved December 16, 2013 from http://indiatext.net/history-of-indian-economy/.

Indian economy during the colonial period. The British East India Company, whose political power
gradually expanded in India from 1757 onwards, used huge revenues generated by the provinces under its rule
for purchasing Indian raw materials, spices and goods.
The colonial government used land revenue for waging wars in India and Europe leaving little for the
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.
Indian economy before liberalization. Policies of India were primarily inspired by the
Soviet economic planning under which a strong emphasis was laid on increasing the domestic self-sufficiency
and reducing the reliance on imports. These policies were primarily protectionist and marked by
excessive economic interventions and business regulations. Also, during this era the major concern of the
government was to develop large and heavy public sector industries.
The Government of India, under the leadership of Indias first Prime Minister, Jawaharlal Nehru, along
with statistician Prasanta Chandra Mahalanobis formulated an economic policy which laid a prime focus on the
development of heavy industry in country by both the public and the private sector.
The Green Revolution in country, triggered by the improved irrigation facilities, increased use of
fertilizers and the introduction of high-yielding varieties of seeds improved the economic conditions of the
country and enabled a better link between industry and agriculture in India.
In 1991, as a result of the reforms demanded by the IMF (International Monetary Fund) in return of
allotting India bailout loan of US$ 1.8 billion, economic reforms were adopted. The tariffs and the interest rates
were reduced which in turn ended the public sector monopolies in certain sectors, and foreign direct investment
were approved in many sectors. The economy was later marked with financial liberalization.
As of 2013, the economy continues to grow at a faster rate, but GDP per capita remains low due to low
productivity.

Sources
Central Intelligence Agency. World Factbook: South Asia: India. Retrieved November 10, 2013 from
https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
History India Timeline. Retrieved December 15, 2013 from http://www.datesandevents.org/places-timelines/22-
history-india-timeline.htm
Wolfram Alpha. India Fast Facts. Retrieved December 15, 2013 from
http://www.wolframalpha.com/input/?i=india&t=crmtb01
India Text. History of Indian Economy. Retrieved December 16, 2013 from http://indiatext.net/history-of-
indian-economy/.
Images
Map of India. http://www.mapsofindia.com/images2/india-map.jpg
Flag of India. http://upload.wikimedia.org/wikipedia/en/thumb/4/41/Flag_of_India.svg/225px-
Flag_of_India.svg.png