The indian economy and the licence raj

It was coined by Indian statesman Chakravarthi Rajagopalachariwho firmly opposed it for its potential for political corruption and economic stagnation and founded the Swatantra Party to oppose these practices. The quantity of goods they were allowed to produce was determined by the licence regime, not by free-market demand. Before the process of reform began inthe government attempted to close the Indian economy to the outside world. The Indian currency, the rupee, was inconvertible and high tariffs and import licensing prevented foreign goods reaching the market.

The indian economy and the licence raj

The spice trade between India and Europe was the main catalyst for the Age of Discovery. The indian economy and the licence raj inscription shown, is a Sanskrit invocation of Lord Shiva.

The combination of protectionistimport-substitutionFabian socialismand social democratic -inspired policies governed India for sometime after the end of British rule. The economy was then characterised by extensive regulation, protectionismpublic ownership of large monopolies, pervasive corruption and slow growth.

Evidence of well-planned streets, a drainage system and water supply reveals their knowledge of urban planningwhich included the first-known urban sanitation systems and the existence of a form of municipal government.

Both the Malabar and Coromandel Coasts were the sites of important trading centres from as early as the first century BC, used for import and export as well as transit points between the Mediterranean region and southeast Asia.

Historians Tapan Raychaudhuri and Irfan Habib claim this state patronage for overseas trade came to an end by the thirteenth century AD, when it was largely taken over by the local Parsi, Jewish, Syrian Christian and Muslim communities, initially on the Malabar and subsequently on the Coromandel coast.

These traders built a Hindu templewhich suggests commerce was active and prosperous for Indians by the 17th century.

The indian economy and the licence raj

Villages paid a portion of their agricultural produce as revenue to the rulers, while their craftsmen received a part of the crops at harvest time for their services. Silver coin of the Gupta dynasty5th century AD.

Mughal era — See also: Muslin trade in Bengal and Economy of the Kingdom of Mysore The Indian economy was large and prosperous under the Mughal Empireup until the 18th century.

The Mughal economy functioned on an elaborate system of coined currency, land revenue and trade. Gold, silver and copper coins were issued by the royal mints which functioned on the basis of free coinage. Key industries included textilesshipbuildingand steeland processed exports included cotton textiles, yarnsthreadsilkjute products, metalwareand foods such as sugaroils and butter.

This marked a determinative shift in India's trade, and a less-powerful impact on the rest of the economy. As the painstaking statistical work of the Cambridge historian Angus Maddison has shown, India's share of world income collapsed from Indeed, at the beginning of the 20th century, "the brightest jewel in the British Crown" was the poorest country in the world in terms of per capita income.

From the beginning of the 19th century, the British East India Company 's gradual expansion and consolidation of power brought a major change in taxation and agricultural policies, which tended to promote commercialisation of agriculture with a focus on trade, resulting in decreased production of food crops, mass impoverishment and destitution of farmers, and in the short term, led to numerous famines.

The British East India Company, following their conquest of Bengal inhad forced open the large Indian market to British goods, which could be sold in India without tariffs or dutiescompared to local Indian producers who were heavily taxedwhile in Britain protectionist policies such as bans and high tariffs were implemented to restrict Indian textiles from being sold there, whereas raw cotton was imported from India without tariffs to British factories which manufactured textiles from Indian cotton and sold them back to the Indian market.

Get the print edition

British economic policies gave them a monopoly over India's large market and cotton resources. It also established a system of railways and telegraphs, a civil service that aimed to be free from political interference, a common-law and an adversarial legal system.

However, at the end of colonial rule, India inherited an economy that was one of the poorest in the developing world, [] with industrial development stalled, agriculture unable to feed a rapidly growing population, a largely illiterate and unskilled labour force, and extremely inadequate infrastructure.

Subsequently, the policy of discriminating protection where certain important industries were given financial protection by the statecoupled with the Second World War, saw the development and dispersal of industries, encouraging rural—urban migration, and in particular the large port cities of BombayCalcutta and Madras grew rapidly.

India News | Analysis | Opinion | Polls | World News | Politics | Business | Economy

Despite this, only one-sixth of India's population lived in cities by Leaders of the Indian independence movement and economic historians have blamed colonial rule for the dismal state of India's economy in its aftermath and argued that financial strength required for industrial development in Britain was derived from the wealth taken from India.

At the same time, right-wing historians have countered that India's low economic performance was due to various sectors being in a state of growth and decline due to changes brought in by colonialism and a world that was moving towards industrialisation and economic integration.

Economic historian Prasannan Parthasarathi presented earnings data which showed real wages and living standards in 18th century Bengal and Mysore being higher than in Britain, which in turn had the highest living standards in Europe. Licence Raj Indian economic policy after independence was influenced by the colonial experience, which was seen as exploitative by Indian leaders exposed to British social democracy and the planned economy of the Soviet Union.

Steel, mining, machine tools, telecommunications, insurance, and power plants, among other industries, were effectively nationalised in the mids. Figures are inflation-adjusted to International Geary-Khamis dollars. Tata, when Tata suggested state-owned companies should be profitable [] Jawaharlal Nehruthe first prime minister of Indiaalong with the statistician Prasanta Chandra Mahalanobisformulated and oversaw economic policy during the initial years of the country's independence.

They expected favourable outcomes from their strategy, involving the rapid development of heavy industry by both public and private sectorsand based on direct and indirect state intervention, rather than the more extreme Soviet-style central command system.

I even need the government's permission for the salary I pay to a senior executive. Tataon the Indian regulatory system, [] Sincethe use of high-yielding varieties of seedsincreased fertilisers and improved irrigation facilities collectively contributed to the Green Revolution in Indiawhich improved the condition of agriculture by increasing crop productivity, improving crop patterns and strengthening forward and backward linkages between agriculture and industry.The economy of India is a developing mixed economy.

Choose the subscription that is right for you

It is the world's sixth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP). The country ranks th in per capita GDP (nominal) with $2, and nd in per capita GDP (PPP) with $7, as of After the economic liberalisation, India achieved % average GDP growth annually.

Users can access online services to apply for the driving licence provided by the Ministry of Road Transport and Highways. Downloadable forms to avail services to obtain driving licence, learner licence and learner licence for mock test are also available.

Did the Licence Raj in India do any good at all? | Musingsof a wanderer

The Licence Raj or Permit Raj, a result of the decision to have a planned economy, was the elaborate system of licences, regulations and accompanying red tape that were required to set up and run. License Raj In , India was a new country racked by pains of the Partition and the dire poverty of her people.

Nonetheless, the Indian Constitution bestowed the right to vote to every adult, making her the first democracy to guarantee universal adult franchise at birth. Does 'culture' in some way help to explain the fact that the same Indian economy that was stagnating for the first fifty years of the 20th century began to grow at a respectable clip after and was amongst the fastest growing in the world by the end of the century?

pejoratively called 'Licence Raj'; Did the British Raj impoverish India? Licence Raj, refers to the involved various licenses, regulations and accompanying red-tape that were required to set up and run businesses in India between and The Licence Raj was the result of Indian Planned Economy where each and every aspect is controlled by States and Central Government.

India: How a rich nation became poor and will be rich again | Gurcharan Das