Indian Economic History Essay
The Dragon and the Elephant: India and China in the Asian Century Essay Topic No 1 “It is the context and circumstances prevalent in any nation that should determine its policies and strategies of growth” (Methane, 2010, p. 159). Illustrate the truth or falsehood of this statement with reference to either India or China “An ounce of practice is worth more than tons of preaching” (Mahatma Gandhi, 1946). Economic thought is an ever-adapting philosophy, which has been ‘preached’ by many differing schools of thought throughout the centuries.
In this current global economic context, the majority of worldwide economic strategies and polices adhere to the neo-liberalism ideologies of deregulation, appropriations, financial and trade liberation’s (Methane, 2007, p. 4). These guiding principle policies were firstly introduced with the creation of the Breton Woods Conference in 1944 after the conclusion of the Second World War. The significance of the Breton Woods Agreements, in regards to Indian’s Journey to economic growth and development, is that it set the world stage up for global adoption of liberalism and capitalist ideologies.
Although the Breton Woods System eventually collapsed in 1973, global ejaculatory institutions of the liberation’s agenda such as the World Bank, the International Monetary Fund (MIFF) and
Need essay sample on "Indian Economic History"? We will write a custom essay sample specifically for you for only $ 13.90/page
A result of the Western World dominating the reconstruction of a war torn global economy, as the distinction between the developed and developing nations became 2 increasing apparent. In response to the emergence of economically inefficient and undeveloped nations such as India, the West once again ‘preached’ a liberalized economic strategy known as the Washington Consensus in 1989, which was supported by the World Bank, the US Treasury and the MIFF.
However, the Western solution for the developing world did not prove to be successful, what did in fact produce economic efficiency was a heavily regulated and centrally planned economy which occurred with the Indian Independence in 1947. For over five decades, the Indian government slowly ‘practiced an ounce’ of liberation’s rather than completely opening up their economy to globalization and the free market. A result of this protectionist strategy is that modern India maintains the second steadiest Indian Economic History By cookbook in the service industries (Guppy, 2009, p. 19). The failure of the Washington Consensus alludes to the notion that one single economic formula, which does not consider a nation’s context, religion, social cohesion, geography, economic and political interests, simply cannot be efficient. Taking into consideration the context of the world economy today, the developing roll is undeniably heading towards a significant transformation with India being one of the leading nations to transition into and dominate the global economy. As Methane asserts: “India is a superpower waiting to happen.
The odds are stacked in her favor, the challenge is to ensure that this is the case for a long time to come” (Methane, p. 18). 3 India has been characterized as the outsourcing service centre of the world for business process operations and clinical research activities of global corporations. However, Indian’s Journey to success is considered unorthodox in that whilst it leads tit economic growth, it continues to be characterized by deprivation and social inequalities such as poverty and a high infant morality rate.
Furthermore, India is an excellent example of a functioning dualistic economy. For example, it is among the most industrialized nations of today which leads the world in the Information and Technology industry (IT), with their 350,000 IT and engineering graduates each year, and yet the majority of it’s Gross Domestic Product (GAP) is comprised from the agricultural sector where in 1991 it equated to 30% of all GAP (Rudolph, 1987, Table One, p. 5).
The rural sector of India remains vital today as 70% of the total Indian population dwell in either small rural villages or farms (World Hunger and Poverty Facts, 2013). India has therefore managed to combine its impressive economic achievements, which can match that of the developed world, whilst continually facing humanitarian issues present in developing nations. This conclusion suggests that economic development does not necessarily have a correlation with human development. Until recently, a common view of development referred to rising income levels and overall economic growth of a country.
However, in recent years a shift towards sousing upon humanity issues and circumstances rather than monetary concerns reflects the new definition of a nation’s development, which can be measured by the Human Development Indicator (HID) produced by the United Nation Development Programmer in 1990. Discussions on the ‘goals of development’ now involve emphasizing the reduction of poverty, rather than raising the average levels of income per capita (And & Ravioli, 1993, p. 133).
Therefore, government 4 policies and strategies, of developing nations such as India, have experienced more attention in the role of social services particularly in basic healthy and education as infrastructure acts as the backbone to any nation, without easy access to clean water, transportation, education, health and social welfare benefits, citizens cannot improve their living standards. Contrary to the ‘preached’ Western liberation’s agenda, India enforced Five Year Plans, which is a common economic and political strategy of socialism and communism, to stimulate the economy and create new employment opportunities.
This central government planning strategies were designed to address the issues present in India during that time for instances the sixth plan (1980-1985) as focused upon increasing the industrial productivity of the economy and improving electricity supply. This strategy of addressing contextual issues proved to be successful as by the mid sass’s electricity production and supply had increased by 45% (Government of India, 1957, p. 27-29).
Similarly to China, the Indian government heavily invested and regulated in a command economy by focusing upon the production sector being mainly steel, coal and hydro-electricity production, and the agricultural sector. After a series of Five Year Plans, the Indian economy had increased heavy industrial productivity to equate to 26. % of all GAP. Moreover, with the East Indian Company (1601) and British Imperial Empire (1875 – 1947) legacy and heritage still embedded within the Indian culture, the emergence of the service sector rapidly took off due to the common tongue for business in India was conducted in English.
As a result, the service sector of India today equates to approximately 55. 7% of total GAP (Keller, 2013). By addressing contextual concerns and taking advantage of their historical circumstances, India was able engage and attract foreign direct investment (FED) which ultimately brought advanced technology 5 ND Western managerial skills to India, essentially allowing them to play a significant role as an exporting nation in the world economy.
When comparing India to China, India has managed to not flood the US market to the extent that Chinese exports have. A potential reason for this may be due to the fact that India experiences a higher level of corruption within business dealings, which may also allude to why China has consistently outperformed India in the past (Kerr et al. 2000, p. 50). Arguably the over regulation and bureaucracy of the economy is in much need of change.
For India this means a change in political leaders and party, which in this case is difficult to find a government that is dedicated to fighting corruption, creating more Jobs with appropriate wages, building and maintaining foreign investment to alleviate the devastating effects of poverty, which the rest of Asia has started to leave behind (The Economist, 2012). Furthermore, Ray and Gosh (1996, p. 0) emphasis that it is Indian’s deep cultural issue of the caste system, which acts as the root to the majority of government and business related corruption found in the departments of labor, agriculture, public health, forestry and the police force. (Lam, 1989, p. 44) Unfortunately the consequences linked to the caste system such as favoritism, bribery and discrimination, will take years to change as it is a religious belief and tradition so embedded within the Indian society, culture and history. With a nation’s economic growth policy is considered true.
Labor unrest and unemployment due to the high level of corruption is a significant challenge facing the Indian government and legal system; as labor is such an essential resource that India has in abundance (Warnock & Dashiki, 2012). Therefore, it is in Indian’s best interest to address the humanity issue of corruption in order to stimulate the economy towards economic efficiency. This proves that by firstly addressing human development issues 6 a political party can achieve economic growth, which is evident in the Indian state of Kraal.
The Indian state of Kraal occupies approximately 1. 18 % of the total land area of the country and has a population of thirty million, being larger than Canada, which represents only 3. 44% of the total Indian population (Primarily, 2000, p. 3). Regardless of this, Kraal has become a paradox to many economists and development experts. The state of Kraal has mystified the economic principle that improvement in the tankard of living for ordinary people can only come about once rapid economic development has been achieved.
Kraal today is characterized as a social-democratic state, which maintains a low birth, infant morality and population growth rate combined with a high level of literacy. Kraal is the only state in India, which has been declared fully literate (Keller, 2013). It is the only state where females outnumber the males in the population at 1. 04:1 compared to Indian’s ratio of 0. 93:1 (Primarily, 2000, p. 4) . If Kraal was it’s own nation it would rank 77th in the world HID (United Nations, 2013).
In historical, economic and political terms, Kraal’s development experience differs dramatically from the rest of the continent, as it is the only freely elected communist state in the world. Kraal’s transformation was based on popular manipulation and public action in terms of peasant and worker manipulation conducted within a social-democratic political framework (Primarily, 2000, p. 9), whereas, the rest of India was exposed to the authoritarian Raja Dynasty. As Kraal governed under socialist ideologies, government policies involved giving back to the citizens by redistributing wealth among the population.
For example, land forms, subsidized rice schemes, social welfare benefits such as age care pensions were allowed, and the process of positive discrimination for low caste groups occurred. An argument proposed by Primarily suggests that due to Kraal’s 7 advantageous geography and historical conjunctions, the imposed government policies to improve human development contributed to its success rate for example as the undifferentiated access to clean water led to the prevention of water-borne bacteria and parasites (Primarily, 2000, p. 26).
In conclusion, a revolution in global business is underway with India as one of the leading nations. India armed with ambitious leaders, attractive low costs, appealing products and services sort by all and modern facilities and systems makes India one of the most rapid growing markets in the world economy. India is indeed a will be to improve their living standards by reducing the poverty rate. The approach forward for India may not lie with the Western capitalist ideologies offered by the MIFF and World Bank but rather by looking internally at Kraal’s success in development.
Kraal may not have experienced rapid growth in GAP per capita, but they have for the past several decades achieved remarkable improvements in social humanity sues such as adult literacy, stabilizing population growth, infant morality, life expectancy, and narrowing the gender and spatial gaps, which is prevalent in other Indian states. By adhering to a domestic economic model, India as a nation could significantly improve on the HID Index. With regards to the proposed question, there is no simple, single answer.