Today, 26 January, is India’s sixtieth anniversary of that date in Indian history when the country adopted its constitution. There is no better time to review the story so far and look into the future.
Indian economy’s kickoff was not as good as in other areas of governance. The multitude of restrictions placed on production, sales, import and export nipped the ambitious entrepreneurs in the bud. When many of the sectors were kept out of bounds by reserving them exclusively for public sector, the last nail in the private enterprise coffin was driven in.
Banking, insurance, oil and coal sectors were nationalized to the disappointment of private sector. No wonder India could post only modest growth figures during these decades of regulations.
Things started easing up a little in the 80s due to small-scale liberalization. This was prompted by burgeoning external debts and mounting fiscal deficits is another matter. The small increment in the growth rate was encouraging enough for the government to pursue the liberalization plans on a larger scale in the 90s.
There were skeptics galore arguing that a democracy like India can never achieve the growth equal to dictatorships. The tide began to turn after the turn of the millennium. It reached a crescendo when the growth rate reached an unbelievable 8.5% during 2003-04. Again during 2008-09, the same level of growth was achieved.
When the entire world, including the developed countries was reeling under recession, India emerged a winner with a remarkably quick recovery. The latest feather in its cap is the recent report released by PricewaterhouseCoopers. Based on Purchasing Power Parity (PPP), India is set to become world’s third largest economy, latest by 2012.
No doubt, Indian economy is headed in the right direction.
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