India, once referred to as the ‘Golden Bird’, was one of the richest economies of the world. It all began with the Indus Valley Civilization and the economy depending heavily on agriculture. Supporting this, was trade, domestication of animals and metallurgy. As new urban centres surfaced in the Northern part of the country, trade and commerce took a quantum jump.
As we all know, ancient India thrived predominantly on agriculture. This filled stomachs and provided for a handful of other reliant industries like textiles and trade, but a few took to menial jobs as well. Be that as it may, this was not all that governed the economy. Social order, religion and family ties also had a vital role to play. The uncompromising caste system and indissoluble joint families were strong influences and were here to stay for a long time to come, still prevalent in some parts of the country.
As the Maurya Empire spread its roots across the country, the economy saw radical changes. For the first time ever, the country was unified as one which made trade routes more secure and trade naturally saw a hike. Moreover, during their reign infrastructure was attended to and roads were maintained, further boosting the trade, and hence, the economy. Maritime trade boomed and the famed ‘Silk Route’ was established.
With the establishment of the Delhi Sultanate came a decline to the economy. Although it faced a rough start, Delhi Sultanate was responsible for putting India on the map of the growing world system. India had integrated mechanical technology into its production processes and the textile production shot up. India was now, not very far behind the Middle East, with respect to the GDP per capita.
The Mughal Empire followed and brought with it prosperity and wealth. A uniform customs and tax administration system was enforced pan-empire. Under the able Mughals, the economy flourished like never before. With the onset of the 18th century, Mughal India had become the biggest economy of the world, leaving China and Western Europe far behind. The GDP growth that India saw during these years, exceeded the prior 1500 years. With an elaborate and extensive road system, uniform currency and unification, India was back on its feet.
However, in the early half of the 18th century, the Mughal Empire fell into decline. With Delhi sacked in Nader Shah’s invasion of the Mughal Empire, the treasury emptied, tens of thousands killed, and many more carried off as slaves with their livestock. This caused the weakening of the empire and led to the emergence of post-Mughal states. The Marathas replaced the Mughals, while the smaller regional kingdoms declared autonomy. The country was fragmented and the economy saw a much-anticipated fall. Multiple invasions, the thirst for territory and relatively poor administration, brought the economy to its knees.
The worst was yet to come. With the coming of the Europeans, the face of the economy changed. Productivity and export of processed goods declined to morph India into an exporter of raw materials and importer of manufactured products. The British fixated their attention on spices and Indigo, and eventually, other production was almost wiped out. With money and resources flowing out of the country and directly into Britain, the economy plummeted.
Setting up a legal system, telegraphs and a well-developed system of railways was done at the expense of world trade. Industrial development stalled and agriculture was stifled, as the new infrastructure continually exploited resources.
The Great Depression of 1929 had a rather minor, indirect impact on India. Deflation increased the burden of debt on people, thousands of civilians were losing jobs, and the government did nothing to soften the blow.
Post-independence however, India opted for a socialist-inspired economic model based on liberalization, privatization and globalization. Attention was given to heavy industries, and hence began the long-drawn process of industrialization. India has witnessed rapid growth in some of its economic sectors in the seventy years since and has had a fairly stable economy over the years. Only time can continue this tale and tell us if the situation is for better or worse.
– Anusha Misra