India's Economic History
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IndiaÆs economic history has been a case study for economists of the ôPublic Choice Theoryö school. The maxim held by all free market economists is that people are motivated mainly be their self-interests. Although people often do act based on their concern for other people, the basic motive behind a personÆs actions is typically a concern for their own self. Public Choice theorists take this self interest and ascribe it to the people in power. Public Choice economists believe that people acting in the political marketplace are motivated by self interest, whether they be voters, politicians, lobbyists or bureaucrats (Shaw). The Indian economy has been thoroughly dominated by the Indian bureaucratic class for over two centuries. Its economic policies have served to keep the vast majority of the country in poverty. In modern history, the policies implemented by the Indian Government and its bureaucrats were brilliant only in the manner in which they maintained the power and influence of the Indian elites. Until the last decade, India had one of the worst economic systems in the world for almost two centuries. It was an economy that was built from the corrupt foundations laid by the British Empire. The British imposed their ôpermanent settlementö in 1793, promising it would bring huge economic and social benefits to the impoverished colony. When the British Enquiry Commission reviewed the results of the settlement, they found that ôÆthe settlement fashioned with g
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tion in the 1950Æs, soviet central planning was the governing economic philosophy. NehruÆs goal was economic self-sufficiency. In order to achieve this goal, Nehru cut off imports through punitive tariffs in order to create a protected domestic market that fostered the expansion and creation of domestic companies and producers. While domestic production did increase, the goods produced were low quality, and the policies stifled the rate of economic growth in the country. A prime example of Indian economic policies in the Nehru era is the fact that the only two makes of automobiles available in the country for forty years were copies of 1950Æs British Austin and Hillman cars. Nehru advanced his policies in a series of five year plans, which among other things attempted to eliminate the importation of consumer goods and luxuries by instituting high tariffs and low quotas. Some items were banned outright. Licenses were required for all new businesses, and enterprises in seventeen industries were nationalized. The Indian government required businesses to get bureaucratic approval for raising and lowering their production as well as for hiring and laying off workers. Government subsidies were used to prop up failing businesses.
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Some common words found in the essay are:
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Approximate Word count = 1366
Approximate Pages = 5 (250 words per page)
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