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India is a country with a rich history and culture. Home to the Indus Valley civilization and a region of historic trade routes and vast empires, the Indian subcontinent was identified with its commercial and cultural wealth for much of its long history. Four major world religions, Hinduism, Buddhism, Jainism and Sikhism originated here, while Zoroastrianism, Judaism, Islam and Christianity arrived in the first millennium AD and mingled into the region's diverse culture. India became a modern nation-state in 1947 after a struggle for independence that was marked by widespread nonviolent resistance. The history of India can be divided into four major segments, the ancient era, the medieval era, the modern era and the post-independence era.
The hallmark of Indian history dates back to the stone age with paintings at the Rock Shelters of Bhimbetka in Madhya Pradesh. These paintings symbolise the earliest known traces of human life in India. The first known permanent settlements appeared over 9,000 years ago and gradually developed into the Indus Valley Civilization, dating back to 3300 BCE in western India. It was followed by the Vedic Civilization, which laid the foundations of Hinduism and other cultural aspects of early Indian society. From around 550 BCE, many independent kingdoms and republics known as the Mahajanapadas were established across the country.
The empire built by the Maurya dynasty under Emperor Ashoka united most of South Asia in the third century BCE. From 180 BCE, a series of invasions from Central Asia followed, including those led by the Indo-Greeks, Indo-Scythians, Indo-Parthians and Kushans in the north-western Indian subcontinent. From the third century CE, the Gupta dynasty oversaw the period referred to as "The Golden Age" of Indian history. Among the notable South Indian empires were the Chalukyas, Rashtrakutas, Hoysalas, Pallavas, Pandyas, and Cholas. Science, engineering, art, literature, astronomy, and philosophy flourished under the patronage of these kings. Paintings at the Ajanta Caves in Aurangabad, Maharashtra were made in the 6th century.
Following invasions from Central Asia between the tenth and twelfth centuries, much of north India came under the rule of the Delhi Sultanate, and later the Mughal dynasty. Mughal emperors gradually expanded their kingdoms to cover large parts of the subcontinent. Nevertheless, several indigenous kingdoms, such as the Vijayanagara Empire, flourished, especially in the south. In the seventeenth and eighteenth century, the Mughal supremacy declined and the Maratha Empire became the dominant power. From the sixteenth century, several European countries, including Portugal, Netherlands, France, and the United Kingdom, started arriving as traders and later took advantage of the fractious nature of relations between the kingdoms to establish colonies in the country.
During the first half of the twentieth century, a nationwide struggle for independence was launched by the Indian National Congress and other political organizations. Led by Mahatma Gandhi, and displaying commitment to ahimsa, or non-violence, millions of protesters engaged in mass campaigns of civil disobedience. Finally, on 15 August 1947, India gained independence from British rule, but was partitioned, in accordance to wishes of the Muslim League, along the lines of religion to create the Islamic nation-state of Pakistan. Three years later, on 26 January 1950, India became a republic and a new constitution came into effect.
The history of India is a mingle between the East and the West. India has always been an invader's paradise, while at the same time its natural isolation and magnetic religions allowed it to adapt to and absorb many of the peoples who penetrated its mountain passes. No matter how many Persians, Greeks, Chinese nomads, Arabs, Portuguese, Britishers and other raiders had their way into this great country, many of them merged into the society giving rise to a country full of diversity in terms of culture, religion, language and architecture.
Economic History of IndiaIndia's economic history can be broadly divided into three eras, beginning with the pre-colonial period lasting up to the 17th century. The advent of British colonisation started the colonial period in the 17th century, which ended with independence in 1947. The third period stretches from independence in 1947 until now. Pre-colonial The citizens of the Indus Valley civilisation, a permanent and predominantly urban settlement that flourished between 2800 BC and 1800 BC, practised agriculture, domesticated animals, used uniform weights and measures, made tools and weapons, and traded with other cities. Evidence of well-planned streets, a drainage system and water supply reveals their knowledge of urban planning, which included the world's first urban sanitation systems and the existence of a form of municipal government.
India has been one of the earliest issuers of coins in the world (circa 6th Century BC), along with the Chinese wen and Lydian staters. The origin of the word "rupee" is found in the word rup or rupa, which means "silver" in many Indo-Aryan languages. Silver coins were minted during the reign of the Gupta king Kumara Gupta-I (AD 414-55).
The 1872 census revealed that 99.3% of the population of the region constituting present-day India resided in villages, whose economies were largely isolated and self-sustaining, with agriculture the predominant occupation. This satisfied the food requirements of the village and provided raw materials for hand-based industries, such as textiles, food processing and crafts. Although many kingdoms and rulers issued coins, barter system was prevalent. Villages paid a portion of their agricultural produce as revenue to the rulers, while its craftsmen received a part of the crops at harvest time for their services.
Religion, especially Hinduism, and the caste and the joint family systems, played an influential role in shaping economic activities. The caste system functioned much like medieval European guilds, ensuring the division of labour, providing for the training of apprentices and, in some cases, allowing manufacturers to achieve narrow specialization. For instance, in certain regions, producing each variety of cloth was the speciality of a particular sub-caste.
Textiles such as muslin, Calicos, shawls, and agricultural products such as pepper, cinnamon, opium and indigo were exported to Europe, the Middle East and South East Asia in return for gold and silver. Assessment of India's pre-colonial economy is mostly qualitative, owing to the lack of quantitative information. One estimate puts the revenue of Akbar's Mughal Empire in 1600 at £17.5 million, in contrast with the total revenue of Great Britain in 1800, which totalled £16 million. India, by the time of the arrival of the British, was a largely traditional agrarian economy with a dominant subsistence sector dependent on primitive technology. It existed alongside a competitively developed network of commerce, manufacturing and credit. After the fall of the Mughals, India was administered by Maratha Empire. The Maratha empire's budget in 1740s, at its peak, was Rs. 100 million. After the loss of Panipat, the Maratha empire disintegrated into confederate states of Gwalior, Baroda, Indore, Jhansi, Nagpur, Pune and Kolhapur. Gwalior state had a budget of Rs. 30M. However, at this time, British East India Company entered the Indian political theatre. Until, 1857, when India was firmly under the British crown, the country remained in a state of political instability due to internal wars and conflicts.
Colonial Colonial rule brought a major change in the taxation environment from revenue taxes to property taxes resulting in mass impoverishment and destitution of the great majority of farmers. It also created an institutional environment that, on paper, guaranteed property rights among the colonizers, encouraged free trade, and created a single currency with fixed exchange rates, standardized weights and measures, capital markets, a well developed system of railways and telegraphs, a civil service that aimed to be free from political interference, and a common-law, adversarial legal system. India's colonisation by the British coincided with major changes in the world economy-industrialisation, and significant growth in production and trade. However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world, with industrial development stalled, agriculture unable to feed a rapidly growing population, one of the world's lowest life expectancies, and low rates of literacy.
An estimate by Cambridge University historian Angus Maddison reveals that 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. While Indian leaders during the Independence struggle, and left-nationalist economic historians have blamed colonial rule for the dismal state of India's economy in its aftermath, a broader macroeconomic view of India during this period reveals that there were sectors of growth and decline, resulting from changes brought about by colonialism and a world that was moving towards industrialisation and economic integration.
Independence to 1991 Indian economic policy after independence was influenced by the colonial experience (which was seen by Indian leaders as exploitative in nature) and by those leaders' exposure to Fabian socialism. Policy tended towards protectionism, with a strong emphasis on import substitution, industrialization, state intervention in labour and financial markets, a large public sector, business regulation, and central planning. Jawaharlal Nehru, the first prime minister, along with the statistician Prasanta Chandra Mahalanobis, carried on by Indira Gandhi formulated and oversaw economic policy. They expected favourable outcomes from this strategy, because it involved both public and private sectors and was based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system. The policy of concentrating simultaneously on capital- intensive and technology-intensive heavy industry and subsidising manual, low-skill cottage industries was criticized by economist Milton Friedman, who thought it would waste capital and labour, and retard the development of small manufacturers.
India's low average growth rate from 1947-80 was derisively referred to as the Hindu rate of growth, because of the unfavourable comparison with growth rates in other Asian countries, especially the "East Asian Tigers".
After 1991 It has been predicted that India will become the third largest economy of the world by 2035 based on predicted growth rate of 5.3 to 6.1%. The country was cruising at 9.4% growth rate until the financial crisis of 2008-09 which inflicted the countries world over.
In the late 80s, the government led by Rajiv Gandhi eased restrictions on capacity expansion for incumbents, removed price controls and reduced corporate taxes. While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account. The collapse of the Soviet Union, which was India's major trading partner, and the first Gulf War, which caused a spike in oil prices, caused a major balance-of-payments crisis for India, which found itself facing the prospect of defaulting on its loans. In response, Prime Minister Narasimha Rao along with his finance minister Manmohan Singh initiated the economic liberalisation in 1991. The reforms did away with the Licence Raj (investment, industrial and import licensing) and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors. Since then, the overall direction of liberalisation has remained the same, irrespective of the ruling party, although no party has tried to take on powerful lobbies such as the trade unions and farmers, or contentious issues such as reforming labour laws and reducing agricultural subsidies.
Since 1990 India has emerged as one of the wealthiest economies in the developing world; during this period, the economy has grown constantly, but with a few major setbacks. This has been accompanied by increases in life expectancy, literacy rates and food security. While the credit rating of India was hit by its nuclear tests in 1998, it has been raised to investment level in 2007 by S&P and Moody's.[dead link]. In 2003, Goldman Sachs predicted that India's GDP in current prices will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035. By 2035, it was projected to be the third largest economy of the world, behind US and China.
