Economy of India

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Quotes on economic activity and policies in and of India through the ages.

Economy through various periods

Colonial Economy

  • "The village communities are little republics, having nearly everything they want within themselves, and almost independent of any foreign relations. They seem to last where nothing else lasts. Dynasty after dynasty tumbles down; revolution succeeds to revolution; Hindoo, Patan, Mogul, Mahratta, Sik, English are all masters in turn; but the village communities remain the same... If a country remains for a series of years the scene of continued pillage and massacre, so that villages cannot be inhabited, the scattered villagers nevertheless return whenever the power of peaceable possession revives. A generation may pass away, but the succeeding generation will return. The sons will take the place of their fathers; the same site for the village, the same position for the houses, the same lands, will be occupied by the descendants of those who were driven out when the village was depopulated..."


  • "India's bane is the profesional 'povertywallas': the politicians who have incessantly mouthed slogans such as 'garibi hathao' … and the economists who write continually about 'abysmal poverty'. Both have generally espoused policies, such as defending public sector enterprises at any cost, discounting and even opposing liberal reforms, promoting white-elephant style projects that use capital-intensive techniques on unrealistic grounds such as that they would create profits and savings when in fact they have drained the economy through losses..."
  • The doctrine of controls and regulation on private enterprise led to: "a nightmare… [a]n untrained army of underpaid engineers… operating… without clear-cut criteria, vetted thousands of applications on an ad-hoc basis… months in… futile microreview…. again lost months reviewing the same data… interministerial licensing committee… equally ignorant of entrepreneurial realities… also operat[ing] upon ad hoc criteria in the absence of well-ordered priorities…. seek approval for the import of machinery from the capital goods licensing committee… foreign agreements committee… state financial institutions. The result was enormous delays… years… with staggering opportunities for corruption…"



  • “...The ease with which firms are able to enter into and exit from business activities is an important determinant of the investment climate. For business start-ups, a large number of clearances have to be taken both at the Central and State level. Such a system introduces delays and creates avenues for corruption. Studies show that with a heavy regulatory burden on business, India still ranks in the bottom quartile of comparable nations in the ease of doing business…. Indian labour laws, particularly Chapter VB of the Industrial Disputes Act, 1947, allow firms less latitude … Small-scale reservation has not succeeded in producing the expected results, and has constrained investment in some critical sectors, such as knitwear, with large growth potential. There is little justification for continuance of such reservations…. Easing the entry-exit barriers will be critical…”

Pro Views

  • "…in July 1991… with the announcement of sweeping liberalization by the minority government of P.V. Narasimha Rao… opened the economy… dismantled import controls, lowered customs duties, and devalued the currency… virtually abolished licensing controls on private investment, dropped tax rates, and broke public sector monopolies…. [W]e felt as though our second independence had arrived: we were going to be free from a rapacious and domineering state…"
    • By: Gurcharan Das
    • Source: Ibid

Dissenting Views

  • "We need not feel embarrassed to advocate economic nationalism...Our government functionaries also must not feel shy to work closely with business. Jointly they should ensure that India's economic interests are protected -- through trade, investment, and foreign policy measures.."



  • "It is almost a cliché to describe India as rich in institutional infrastructure and poor in physical infrastructure."
  • "Terminals at gateway airports like New Delhi and Bombay are shabby, crowded and chaotic. Nearly every aspect of airport services, from runway maintenance to air traffic control and baggage handing, needs huge upgrades to cope with the increased demand."


  • "If we stop thinking of the poor as victims, or as a burden, and start recognising them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up."
    • By: C K Prahalad
    • Source: The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. ISBN 0131467506

Indian Economic thinking

Jawaharlal Nehru

  • "We have achieved political freedom but our revolution is not yet complete and is still in progress, for political freedom without the assurance of the right to live and to pursue happiness, which economic progress alone can bring, can never satisfy a people. Therefore, our immediate task is to raise the living standards of our people, to remove all that comes in the way of the economic growth of the nation. We have tackled the major problem of India, as it is today the major problem of Asia, the agrarian problem. Much that was feudal in our system of land tenure is being changed so that the fruits of cultivation should go to the tiller of the soil and that he may be secure in the possession of the land he cultivates. In a country of which agriculture is still the principal industry, this reform is essential not only for the well-being and contentment of the individual but also for the stability of society. One of the main causes of social instability in many parts of the world, more especially in Asia, is agrarian discontent due to the continuance of systems of land tenure which are completely out of place in the modern world. Another-and one which is also true of the greater part of Asia and Africa-is the low standard of living of the masses.

India is industrially more developed than many less fortunate countries and is reckoned as the seventh or eighth among the world's industrial nations. But this arithmetical distinction cannot conceal the poverty of the great majority of our people. To remove this poverty by greater production, more equitable distribution, better education and better health, is the paramount need and the most pressing task before us and we are determined to accomplish this task. We realize that self-help is the first condition of success for a nation, no less than for an individual. We are conscious that ours must be the primary effort and we shall seek succour from none to escape from any part of our own responsibility. But though our economic potential is great, its conversion into finished wealth will need much mechanical and technological aid. We shall, therefore, gladly welcome such aid and co-operation on terms that are of mutual benefit. We believe that this may well help in the solution of the larger problems that confront the world. But we do not seek any material advantage in exchange for any part of our hard-won freedom."

Mahatma Gandhi

  • "God forbid that India should ever take to industrialism after the manner of the west... keeping the world in chains. If our nation took to similar economic exploitation, it would strip the world bare like locusts."
  • "Democracy must in essence, therefore, mean the art and science of mobilising the entire physical, economic and spiritual resources of all the various sections of the people in the service of the common good of all."
  • "We have believed and we do believe now that freedom is indivisible, that peace is indivisible, that economic prosperity is indivisible."
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According to a reent book, there are four sources of today India’s Economic Thought (The Indian Economy, J.J. Boillot by Gyan Books New Delhi, january 2008) 1/ The Gandhian economic concepts were embodied in the plan formulated by Shriman Narayan and Acharya S. N. Agarwala in 1944. This plan contained a development strategy and a view of social organisation far removed from Nehru’s. Though these ideas may smack of economic romanticism, they had a profound influence on economic thinking during the decades following Independence with the birth of a significant movement of cooperative organisations and NGOs that are still alive and influential 2/ The first modern economic ideas made their appearance in 1938 with the setting up of a National Planning Committee under the leadership of Jawaharlal Nehru, one of the main figures of the Indian independence movement. Inspired by Fabian socialism during his long stay in Great Britain, Nehru also admired the success of the then prevalent Soviet model. India has been under his influence till the early1980s. 3/ Another trend situated to the far left of the Nehruvian ideology led to the birth of the Communist Party of India in 1925 (CPI). Although it supported the nationalist movement, the Communist Party had a strong identity based on Soviet orthodoxy before its split in 1964 leading to the creation of a pro-Chinese faction calling itself CPI (M). Today Bengal or Kerala States governement are strongly influenced by this mixed economy ideology. 4/ The last line of thinking appears deeply rooted in the caste system with the influential traders and money lenders big supporters today of the liberal ideology of Adam Smith laissez-faire. Over the years, the liberal economic ideology gradually assumed importance among the two main political parties that dominate national politics, the Congress and the BJP.