Essay for Global Political Economy

ESSAY FOR GLOBAL POLITICAL ECONOMY

TITLE: A NATION ARRIVES!

BY: SUMEET GUPTE

A NATION ARRIVES!

• How and why the political changes in India have not changed the economic liberalization policy and led to a growth in the Indian Economy.

India since its independence has been a non-communist, democratic nation with a plural power society. From 1947 to 2015, it has astounded many people, seeing this young nation transform from an agrarian nation to the world’s 3rd largest economy and still continue to be a democratic nation. The question still remains, “How did India manage to keep the pace of economic growth despite of the changing governing parties, which had opposing views in almost all subjects, in its political system?” “How was this marriage between economy and democracy managed?”

The political system in India and the politics of India has interested people all over the world. This might be because the second largest population in the world peacefully votes for one or a collation of parties to run the country for the next 5 years. The Indian political system works on two different strata’s with the national level elections deciding the central or national government and the state level elections deciding the state government.

Looking at the economy of India, it can be said that it is extremely diverse. It ranges from an agricultural background to a now strong industrial sector and a booming service sector industry as well. India is also being called an IT super-power and a major economic player in the world. After its independence in 1947, India was predominantly an agrarian nation. This was also the case in the year 1990 when agriculture still made up about 29.02% of the GDP. Even now (2013) India still has an agricultural sector contributing to about 18.20% to the GDP. However, since the year 1990 there has been a change in the GDP contribution on the Indian economy with agriculture not being the highest contributor to it.

A study over the time period from 1990 to 2014 shows us the changes in the Indian economy and Indian political scenario and gives us the answer to the question around which the essay revolves.

In 1990, India was in a bad economic state. India was facing a huge Balance of Payments crisis. This problem did not crop up just because of the national situation. India until the 1990’s had depended mostly on the Soviet Union for trade and failed to make good economic relations with the Western Countries. It had got used to a shelter and economy where inefficiencies were routinely transferred to consumers. Also the Western investment in the economy was extremely low because of various Government restrictions like the repatriation of profits and high import duties on raw material. In late 1980’s problems in the Soviet Union began to crop up and in 1990 the Soviet Union finally disintegrated into 15 nations. Thus, India’s major buyer was in turmoil.