How the Indian Economy has shaped after Independence?

I will categorize the Indian Economy into three phases:

A. Prior to the Liberalization of the Indian Economy (1947-1991)

B. Post Liberalization of the Indian Economy (1991-2014, May)

C. Positive Sentiment for Business after May 2014 till date

Photo Via TheHindu

a.     Indian Economy during 1947 to 1991

·        Our economy was driven by Agriculture and allied industries.

·        The economy was inspired from USSR.

·      Centralized unit like Planning Commission was assigned the task to make the road map of all the expenditures like planning and allocating funds for major projects.

·      We were born a new nation and the works done by the Government at that time might not be very good yet commendable. They opened world class institutions like IITs, AIIMS, etc

·     Nationalization of Banks was done. It was believed that Private sector are only for profit and hence it was believed that only government run projects can provide growth to the nation. Private sector was looked down upon. Entrepreneurship was a rare species

·     There was less competition and I remember one incident from the book India Unbound, where I read that once someone asked Nehru to encourage competition. His response was like why we need 15 types of Toothpaste.

·      Corruption was rampant but due to lack of transparency and lack of media awareness, everything looked perfect.

·      Licence Raj made it really difficult to do business in India. Foreign companies find it a hard nut to enter Indian market as we were a closed market.

·     As a result, our parents didn't had so many options like we have today. They hoped to get a government job. Private players were not respected baring the exception to Tata, Birlas etc. MNCs was not a buzz word then. Probably that's why people in my home state Bihar, are still so fond of Government jobs.

·       We had seen two revolutions- green revolution and white revolution during this phase. They helped in making India self reliant and decreased the dependency on import. It was a wonderful achievement for India at that time.

·      People had less choice and less expectation then than our generation. Probably they never felt, what they were deprived of. I am reminded of one scene from the Movie Swadesh, where the villagers are telling that the Ravan Vadh ( Burning the effigy of Ravan) looks more beautiful when the power is not there. [ People never mind frequent power cut as they got used to it and started to love it..]

·     Our Foreign exchange reserve was at its rock bottom in 1991 which compelled the then Finance Minister to open the Indian Economy to bring India out of that difficult economic crisis.

b.    Indian Economy after 1991 till 16th May 2014

·        The economic crisis of 1991 let to Globalization of Indian Economy and it turned out to be the landmark event for the World. It opened a floodgate of opportunities for India. It was India's Independence 2.0

·     Although, Globalization was never new to India and Indian species, gold, precious stones, etc was traded with traders from Central Asia, Europe, etc from the time much before the Great Ashoka. In fact the Indian Empire was controlling territories as far as Present day Afghanistan.

·      But, After the colonial rule, India, forgot all the glorious history for some time and then had to start all this from Scratch.

·       Due to opening of Indian Market, many companies tried to enter Indian Market because it has tremendous potential.

·     India had a lot to offer, it has natural resources, cheap labor, hard working people and a huge market to tap. This has changed the entire scenario of the way business is done in India.

·     Monopoly had to pave way for the Competition, which ultimately benefited and created millions of better paying jobs for the Indians. In fact that is the true democracy- For the people, by the people, of the people.

·     The process of doing business has become easier compared to the License raj, prior to 1991 but there is  a long way to go on.

·     Globalization has paved way for companies like Larsen and Toubro to enter into Defence sector despite being a Private Company.  It is possible just because of the Globalization of Indian Economy and subsequent positive decisions thereafter. I am an employee of L&T and our visionary Group Chairman, AM Naik once told us that we are not in Private sector but a National Sector. Major gigantic infrastructure projects like Delhi International Airport, Mumbai International Airport, Hyderabad International Airport, Bangalore International Airport, etc have been constructed by L&T on Turnkey basis because the government has allowed private players to take up these types of Huge Infrastructure Project.( Turnkey basis means doing complete work from scratch to finish including Design, Engineering, Procurement and Construction) Note- L&T is an Indian Conglomerate and her founders, Mr. Larsen and Mr. Toubro were Danish. Though they were foreigners but they were more Indian than most Indians.

·     India is well respect today by all the Developed Nations, just because we have tremendous potential for growth. Developed Countries have market which has saturated or near saturation and they also need us as we have a huge working population and tremendous growth potential.

c.    From 16th May,2014 till date

·      Our current PM, Mr. Narendra Modi, is putting sincere effort to transform the way in which business is done in India.

·   He is travelling to various countries to make strategic partnership with them. He is    promoting his pet Initiative, Make in India, which is well received by CEOs of most of the MNCs. Many feel these are just gimmicks and are not yielding any results. But, I would politely differ as I feel that we have to wait and watch as Rome was not built in a day.

·     Land Acquisition is a major bottleneck: The initiative to pass land bill is crucial for the success of Make in India because I am from  Construction Industry and have seen, faced, experienced and  understand how projects gets delayed just because of unavailability of land.

·    Hope: We must never lose hope. And, I believe that someday India will be a developed country with strong social and family values. Everyday I am learning about new startups and entrepreneurs in India, and they make me believe that India is going to evolve into one of the most desirable places to do a business. Black money and red-tape have to be the thing of the past. We have to move ahead without them.