Transcript Slide 1

During the 19th Century there were attempts to follow
the example of the West in religion and in social and political reform.
Educated India became growingly receptive to modern European
thought.
Raja Ram Mohan Roy (1772-1833), may be said to have initiated a
new age in India's history. The constitutional methods in politics which
he advocated were the beginning of the trend which led to the
foundation of the Indian National Congress in 1885. He also founded
the Brahmo Samaj, a religious group seeking to rid Hinduism of
irrational distortions and practices.
Among other pioneers of religious, social, educational and
political reforms were Ishwarchandra Vidhyasagar in Bengal and
Jyotiba Phule in Maharashtra. They worked actively to improve the
position of women, giving them education and recognizing their rights.
As a reaction against the tendency of some to imitate the West and to
ignore India's own rich and valuable traditions, and also a reaction
to the adoption of the Christian forms of worship, Swami Dayanand
Saraswati (1824-83) established Arya Samaj and urged a revival of
Hinduism in its pristine Vedic form.
The synthesis of the two great forces, the ancient Indian and the modern Western, was
brought about by Ramakrishna Paramhansa (1836-1886) and by his disciple, Swami
Vivekananda (1863-1902). He believed in and preached the superiority of the Hindu path to
spiritual salvation. At the same time, he urged India to adopt the scientific attitude of West.
Vivekananda founded Ramakrishna Mission. He condemned the caste-system, rituals and
superstition and urged people to imbibe the spirit of liberty, equality and free thinking.
The Theosophical Society was founded in U.S.A. and the movement grew in India under the
leadership of Mrs.Annie Beasant, which glorified Indian religion and philosophical tradition
and helped the Indians to recover their self-confidence.
Cultural and Scientific Awakening
The theme of this century was predominantly humanistic and stressed the
freedom of man and equality of all. Geetanjali - the distinctive work of
poet Rabindranath Tagore won him the Nobel prize.
The modern Indian sought to reconcile the ideas and thoughts of the
east and west. Later on, similar trends appeared in paintings and
sculptures as well. In the field of science, high recognition was given to the
works of scientists like Ramanujam in Maths, Dr.C.V.Raman in Physics
for the Raman Effect and Dr.Jagdish Chandra Bose in the field of
Botany.
The Revolt of 1857 severely jolted the British
administration in India and forced its reorganisation. By
the act of 1858, the governing power was transferred
from the East India company to the British crown.
This power was to be exercised by the Secretary of
State for India (member of the British cabinet and
responsible to Parliament) aided by an Indian Council,
which
had
only
advisory
powers.
For administrative purpose India was divided into three
presidencies, namely, Bengal, Madras and Bombay
Presidency. The interests of the British thus became
paramount
in
the
governance
of
India.
QUEEN VICTORIA
The policies and interests of the British in India were
determined by the industrialists, the most powerful
section in British society. Indian resources were also
utilized to serve the interests of the British empire in
other parts of the world and in costly wars.
The British Policy
The queen's proclamations of 1858, promised not to extend British
territories in India by annexing Princely states and they were subordinated to the
British government. By the act of 1876, Queen Victoria assumed the title of
Empress of India. This implied that Britain would protect the Indian states
from internal as well as external danger and get the unlimited powers to
intervene in the internal affairs of the State.
Thus after 1857, India was divided into two parts - British India, directly
governed by the British government and the Indian states ruled by Indian
princes. Britishers gradually stopped their support to the reforms which resulted
in the preservation of social evils. After 1857 mutiny, they followed the Divide
and rule policy, in a aim to create a rift between the Indian Hindus and
Muslims.
The impact of modern western culture brought into being a few movements
which contributed much to the making of modern India. Many Indians realized
that the reform of social institutions and religious outlook of people was a
necessary pre-condition for the growth of national unity.
The Economic Impact
Indian economy was transferred into a colonial
economy whose nature and structure was determined
by the needs of the British economy.
India supplied all the raw material required for the
Britain's Industrial need, especially the cash crops
like jute, cotton, iron ore and became the ready market
for its large-scale finished product. The cottage
industries were destroyed systematically and India
was forced to accept British goods, which were cheaper
than Indian counterpart.
High revenue demands and rigid manners of
collection forced peasants into the clutches of the
moneylenders. Expanding population put greater
pressure on land as there was no corresponding
development of industry. Britain's policy of one-way
free trade ruined India's urban and rural industries,
which further added to the pressure on land.
Development of Transport and Trade
A cheap and easy system of transport was important for the flow of British ready made goods
and the export of raw material to Britain on large scale.
Roads were improved and steam ships were introduced. But real improvement came with the
railways which started in 1853, between Bombay V.T. and Thane. In her trade with other
countries, India usually maintained a favourable balance, which were used for paying off various
kinds of dues charged on India by Britain.
Development of Industries
Upto 1914, Industrial development was mainly restricted in the production of export of those
goods with the natural advantage (jute, tea etc.) and in those areas where competition with
British counterparts was not serious (coarse goods).
During the inter-war period of 1914 - 39, it was in the production of consumer goods for mass
market within India, mainly due to war tariffs and depression.
Finally the last decade of British rule from 1939-47, brought another phase - the production of
capital goods for the domestic market.
SOCIAL
POLITICAL
POLITICAL
1935-1938: The British attempt to appease India's call for independence while retaining
1971-1974:
The
Congress
(R)
party
under
Morarjifocus
Desai
aofparliamentary
Indira
1939-1946:
In determining
India's
future,
Britain's
on gains
the
Congress
Party
and majority.
Muslim League
their prize colony.
The result
is
the
Government
of India
Act
1935,
which
increases
the
Gandhi
consolidates
her
power,
but
a
deepening
economic
crisis,
war
with
Pakistan,
and
civil
diverts
attention
from
social
and
religious
minorities.
Communal
violence
mounts
over
conflicting
visions
of
country's provincial autonomy. In the 1937 elections, India's Congress Party outperforms
disobedience
test
her
administration.
Displeased
with
central
government,
Punjab
unsuccessfully
an
independent
India. deepening the three-way rift between Muslims, Hindus, and the British.
the
Muslim League,
calls for a "Sikh
Autonomous
The government
in world's
turmoil worst.
after Gandhi's
1971 election
is
1947-1950:
India's
poverty andRegion."
social indicators
are amongisthe
Partition unleashes
a wave
1939-1946:
The British hand over power at local and provincial levels, but keep control of
invalidated.
of violence, misery, and loss of life and property, as millions flee Pakistan for India and vice versa.
the
center. AtMore
seems
inevitable,
but
negotiations
theto
Congress
Discrimination
against
the
"scheduled,"
or socially
disadvantaged,
castes
and tribes
(referred
by Gandhi
1975-1977:
Indiraautonomy
Gandhi's
request,
the
president
declares
a state
ofbetween
emergency,
suspending
Party,
the Gandhi's
Muslim
League,
British
reachoutcry
an impasse.
In March
1940,The
themultiparty
Muslim
as
"harijan")
is prohibited
by the and
constitution,
but discrimination
remains
entrenched.
civil
rights.
opponents
are the
jailed
until
public
forces general
elections.
1951-1957:
Violence
continues
following
the
reorganization
of
states
along
linguistic
lines.
New
legal
League demands
and spends
the nextdecentralization
five years building
support inand
Muslimopposition
campaignspartition
as the Janata
Party, stressing
and employment,
wins
a
reforms
to
emancipate
women
are
poorly
enforced.
One
of
the
first
family-planning
efforts
in
the
majority inareas.
The 1946
elections
lead to
further violence.
majority
the Lower
House.
Morarji Desai
becomes
prime minister. India's protectorate of Sikkim
developing
begins. The government grants Dalits, a caste representing 16 percent of India's growing
becomes
aworld
state.
1947-1948:
Britain
partitions the colony, with free India flanked by East and West Pakistan.
population, additional protections against discrimination, despite protests from the upper castes.
1978-1984:
Minister
Desai resigns
after
failing
to India,
bring about
reform.
HeMinister
is brieflyJawaharlal
succeeded
Most
of thePrime
562high
independent
princely
states
join
under
Prime
1958-1966:
The
rate of population
growth
severely
hinders economic
development.
The government
by
Chaudhury
Charan
Singh
and
Chandra
Shekhar.
Renaming
her
party
Congress
(I)
Indira,
Nehru.
In the South,
Telugu-speaking
Hyderabad
tries
unsuccessfully
toforremain
launches anti-poverty
programs,
including food subsidies
and rural
self-employment,
but poverty
rates
Gandhi
iswith
reelected.
In trend,
1984
she
assassinated
by
her
bodyguards
army
to
fluctuate
noMillions
clear
and isfood
shortages
accentuate
inequality.
Theafter
23rdordering
Amendment
to the
independent.
of people
flee
Pakistan
for Sikh
India
and vice
versa
amid the
mounting
storm
a holy
Sikh extremists
shrine
where
extremists have
taken
refuge.
Constitution
extends
existing
affirmative-action
measures
1980.Her son Rajiv replaces her.
violence.
Hindu
assassinate
Gandhi
inuntil
1948.
1985-1987:
Rajiv
Gandhi
temporarily
restores
calm,
but
two
scandalspursues
taint his
Congress
(I) Party.
1967-1974:
Gandhi, seeking
to eliminate democracy
poverty,
reform state
and
places
1949-1955: Prime
India Minister
adoptsIndira
a British-style
parliamentary
withland
elected
and
The
new
Bharatiya
Janata
Party and
(BJP)
incites profits.
the public
celebrating
Hinduaggravates
heritage
ceilings
onnationalist
personal income,
private
property,
corporate
But by
a rupee
devaluation
national
governments.
It retains
thethe
judicial,
administrative,
defense,
and
educational
famine,
labor
unrest,
and misery
among
poor.forActivists
form social
movements
to represent
the
and
opposing
secularism
and affirmative
action
lower castes.
Several
opposition
factions join
structures
and
institutions
set
up
by
the
British.
India
becomes
a
republic
in
1950,
with
a
interests
of farmers,
women,
andNational
environmentalists.
National
civil disobedience
marks
the
Janata
Dal Party
in the
Front. India
and Pakistan
agree not
to 1974.
strike each other's
largely
ceremonial
president
of state.
Prime
Minister
nationwide
1975:
the two-year
stateasofhead
emergency,
Prime
Minister
IndiraNehru
Gandhienjoys
implements
several
nuclear During
facilities.
controversial
social
measures,
including
forced
sterilization
for
the
poor
and
eviction
of
urban
squatters.
support, butRajiv
new opposition
parties
beginelection,
to form.but resigns after failing to form a majority
1988-1990:
Gandhi wins
the 1989
Half
of
India's
population
remains
in
poverty,
but
incidence
begins
to decline.
Fifthand
Five-Year
1956-1961:
The
federal
system
is
reorganized
along
linguistic
lines
intobut
15 The
states
eight
government. The National Front's V.P. Singhpoverty
becomes
prime
minister,
his
government's
Plan includes programs to improve access to health care among the rural poor.
federally administered
territories.and
Separatist
existproves
in pockets
throughout
the
dependence
on the Communist
Bharatiyamovements
Janata parties
untenable.
The latter
1979-1983: A controversial report recommends that 27 percent of all government jobs and university
withdraws
its
and Singh
loses
vote of confidence.
The
minority
opposition
country,
in Muslim-dominated
Kashmir
the Western
region of
where
admissionsnotably
go support,
to "backward
classes,"
whoarepresent
52and
percent
of
thesubsequent
population.
ThePunjab,
proposal
is not
government
collapses
after
four
months.
Sikhs
grow
increasingly
militant.
Democratization
of
the
political
process
leads
to
the
immediately accepted. The Sixth Five-Year Plan aims at training health workers and controlling
1991-1995:
Rajiv
Gandhi
is
assassinated
by
a
Tamil
suicide
terrorist.
The
Congress
Party
prime
communicable
diseases. parties.
Parliament endorses the National Health Policy, criticized for its lack of specific
spread of opposition
minister,
P.V.
Narasimha
Rao,
stronger than
expected,
selecting
(in particular
finance
measures.
1962-1963: India proves
ill isequipped
for the
1962 war
with ministers
China along
the countries'
and
commerce
ministers)
who
will
break
with
the
past.
Support
for
the
Bharatiya
Janata
Party
1984-1989:
The and
government
tries to expand
access
to is
basic
social services
andhome
redirect
to
shared border,
Prime Minister
Nehru's
image
tarnished,
both at
andindustry
abroad.
"backward
areas."
National
PolicyCentral
on Education
initiatesintervention
programs aimed
at improving
the country's
grows
among
theThe
upper
castes.
government
in local
affairs fuels
existing
India
acquires the
formergovernment
French settlement
of Pondicherry
forcibly annexes
education
The central
funds an increasing
number of and
family-planning
programs. the
The
separatistsystem.
movements.
Portuguese
enclaves
of
Goa
and
Daman
and
Diu.
The
state
of
Assam
begins
to
lose
economy
is
unable
to
generate
sufficient
jobs
for
the
rapidly
growing
labor
force.
1996-1998: Two minority coalition governments survive a scant year each. The 1998 elections pit
territory
as non-Assamese
arethe
1990-1994:
Prime
Minister
V.P.populations
Singh supports
affirmative-action
proposals
of 1980,
triggering
riotsthe
in
the Congress
Party's
Sonia
Gandhi,
widow
ofgranted
former autonomy.
Prime Minister
Rajiv
Gandhi,
against
the
North.
Many
of
the
unemployed
join
militant
religious
groups,
rekindling
Hindu-Muslim
tensions
that
1964-1966:
Lal
Bahadur
Shastri
becomes
prime
minister
upon
Nehru's
death.
Anti-Hindu
United Front alliance and the Bharatiya Janata Party (BJP). The vote runs deeply along the lines of
culminate
in violenterupt
riots in
in Tamil
1992. While
percent are stilland
in poverty,
India's agrowing
middle class
demonstrations
Nadu 38
(then
India enters
second
with
caste and religion.
A BJP-led
coalition
barelyMadras),
emerges victorious,
and Atal
Behari war
Vajpayee
contributes to and benefits from the country's thriving high-technology industry.
Pakistan
over Kashmir.
Shastri dies after signing an agreement with Pakistan for a ceasebecomes
prime
minister.improvement
1995-1998:
Noticeable
in several social indicators, including literacy and infant mortality
fire
in Vajpayee's
Kashmir.
to Poverty
the Congress
Party
grows.
state
of Bowing
Punjab to
is
1999-2002:
coalition
fails
to win
a majority
inThe
Parliament.
rates,line
is limited
primarily Opposition
to13-party
urban areas.
worsens
following
poor harvests
and
implementation
of
sociopolitical
demands,
the
government
creates
three
new
Northern
states.
The
Bharatiya
Janata
partitioned
into
Hindi-speaking
Haryana
and
Punjabi-speaking
Punjab.
the 1991 stabilization policies. In particular, relative neglect of the agricultural sector, in favor of industry,
Party
conducts
nuclear
tests,
sparking
counter becomes
tests by Pakistan
and bringing
contributes
to the
perpetuation
of rural
poverty.
1967-1970:
Nehru's
daughter,
Indira
Gandhi,
prime minister.
For theinternational
first time,
sanctions
upon
both
countries.
A
serious
military
clash
in
Kashmir
and
a
series
of
scandals
further
1999-2002:
The
Vajpayee
government
announces
plans
to
reduce
poverty
through
acceleration
of
GDP
the Congress Party majority is reduced, as opposition alliances control almost two-thirds
of
growth.
It
remains
to
be
seen
whether
a
second
generation
of
economic
reforms
will
have
the
desired
the state governments.
Indira Gandhi's imperious style angers some party members, and
undermine
the government.
trickle-down effect. Social spending suffers a significant blow when an earthquake in the Northern state of
the party splits into Congress (O) and Congress (R). Regional parties proliferate, especially
Gujarat
20,000
people, and
injures
anotherand
160,000,
and leaves 600,000 homeless.
in Tamilkills
Nadu,
Punjab,
Jammu
Kashmir.
ECONOMIC
ENVIRONMENTAL
RULE OF LAW
1939-1946: Environmental protection is scarce, limited primarily to forests. The Forest Act and
1939-1946: During World War II, the British impose controls over prices, production, and the use of foreign
1939-1946:
TheCodes
requisitioning
of the
property
military installations
local
economies,
Forest Privilege
grant India
right tofor
demarcate
reserves anddisrupts
protected
forests
and give
exchange. The war sparks inflation, corruption, shortages, and black markets. Disruptions in international
access
to famine
tribes,shortages
villages.
Local
application
of theserioting
rights
areitsat
the discretion
of
while
wartime
spur
a black
market.
Communal
and
massacres
the
trade and
incastes,
Easternand
and
Southern
India
lead the
government
to initiate
"Grow
MoreinFood"
government
officials
and
subject
to
withdrawal
at
any
time.
North
indicate the potential for civil war and hasten plans for partition.
campaign.
1947-1956:
Rapid
state-led
begins,
in an
era of democratic
increasing
pollution
and
1947-1950:
aindustrialization
mixed-economy
approachushering
withpeople
central
planning
and
rapid industrialization
1947-1957:Nehru
The combines
Indian
Constitution
guarantees
the
certain
rights and
dwindling
forest
resources.
National
interest
supercedes
local
claims
to
resource
management.
under the
newlyprotections
established against
Planning discrimination
Commission. Theagainst
government
takes oncaste
a significant
role in the
grants
some
the lowest
"untouchables."
The
government
the
Central
Board
of
Forestry
implement
the
National
Forest
Policy,
economy,
grantingsets
itselfup
a monopoly
in several
defense
andtoinfrastructure
industries.
A complex
systembut
of
The Supreme Court comes into being in 1950. The rise of a massive public sector
and
controls
and
licenses
comes
to
dominate
production,
investment,
and
trade.
large-scale deforestation continues. The Factory Act addresses the discharge of water and
complex
bureaucratic
processes
known agriculture,
as the "Permit
leadsprojects
to institutionalized
1951-1955:
First Five-Year
Plan prioritizes
irrigation,Raj"
and power
in an attempt to
effluents byIndia's
factories.
corruption.
Price
ceilings
contribute
to
the
growing
black
market.
increase
self-sufficiency.
Two
acts
provide
the
legal
framework
for
the
government's
extension
of its
1957-1967: Jurisdictional complexities hamper the implementation of environmental regulations.
1958-1967:
The
army
quells
several
violent
religious
demonstrations.
In
the
states
of
intervention
and
price
controls
in
dozens
of
industries.
Pervasive
controls
give
rise
to
the
complex
State governments have jurisdiction over environmental issues, yet the constitution gives the
bureaucratic
processes
of
the
"Permit
Raj."
Industrial
and
agricultural
production
rise.
Kerala
and Bengal,sweeping
workers stage
at several
Armed
Maoists lead
a terror
central government
powerssieges
to implement
lawsfactories.
with regard
to international
treaties
or
1956-1960:
The
Second
Five-Year
Plan
emphasizes
social
goals
and
industrialization
in
a
protected
campaign
in
Bengal.
In
Muslim-dominated
Kashmir,
a
violent
separatist
movement
gathers
decisions. Industrialization and increased agricultural production lead to widespread pollution of
environment. The Industrial Policy Resolution extends the grasp of the government in the areas of capital
strength.
surface
and groundwater.
and intermediate
goods. Industrial production rises an average of 6 percent per year. Land reform is geared
1968-1974:
Labor
unrest
leads constraints
to national
strikes.
Agitation
for agricultural
linguistic and
religious
1968-1975:
The
Green
Revolution
increases
productivity
and expands
lands.
This in
toward removing basic
socioeconomic
for
rural
populations.
turn
accelerates
the
use
of
chemical
fertilizers
and
overexploits
groundwater
resources.
After
a
separatism
intensifies
in several
of thousands
to India
1961-1964: The
Third Five-Year
Planstates.
focusesTens
on raising
national of
andrefugees
per capitaflock
income
levelsfrom
and
decade
of the
debate,
Parliament
passes
India's first
major
spurred
part
by
expanding
industrial
base.
Private
investment
falls after
as a result
of legislation,
corruption,
extensive
controls,
and
an
East
Pakistan,
which
becomes
Bangladesh
awater
brief
but intense
war in
inlarge
1971.
The
the 1972and
Stockholm
Conference
on Human
Environment.
Anti-dam
campaigns
halt several
inefficient
bloated
bureaucracy.
Continuing
food shortages
the importance
of self-sufficiency
in
Allahabad
High
Court
invalidates
Indira
Gandhi's
1971reinforce
election.
food
grain production
and the need for government procurement of an adequate buffer stock.
hydroelectric
projects.
1975-1977: During a two-year state of emergency, Indira Gandhi's government suspends
1965-1974:
Inefficiency
arisingitsfrom
protected industrialization
to a decline
industrial
1976-1980:
Indiaimposes
amends
constitution
to Maintenance
allow statesleads
toofintervene
in in
theIndia's
protection
of growth
public
civil
rights
and
censorship.
The
Internal
Security
Act
is amended
rates.
Skyrocketing
world
oil
prices
deeply
affect
the
country,
a
large
importer
of
oil.
In
agriculture,
India
health, forests, and wildlife. But the amendment is limited by a clause specifying that it "shall not
be
to
allow
the
government
to
arrest
individuals
without
specifying
charges.
Tens
of
thousands
ushers
in
the
Green
Revolution,
emphasizing
irrigation,
hybrid
seed
development,
and
widespread
use
of
enforceable by any court." Indira Gandhi enacts a series of environmental measures and creates
of
Indira
Gandhi's
opposition
arrested
and
jailed.
fertilizers.
The
resulting
agriculturalare
growth
helps offset
the industrial slowdown.
the Department of Environment. Environmentalists criticize the department for being weak and
1975-1979:
The
Fifth Five-Year
rapidlyand
becomes
obsolete
as leads
government
changes its legislation
priorities to
1978-1984:
A rash
of caste Plan
violence
regional
unrest
to government
symbolic in nature.
respond
to rising
oil prices.curbs
The dramatic
in world
oil prices,
which in
increases
India's Indira
oil bill
that
places
substantial
on civilincrease
liberties.
Conflict
culminates
1984 Inwhen
1981-1985:
The
Act to
finally
lowers
deforestation
1984
India
threefold, attracts
anew
largeForest
numberConservation
of Indian workers
the Gulf
countries
and bringsrates.
in the flow
of foreign
Gandhi
orders
troops
to
dislodge
armed
Sikh
extremists
from
the
Golden
Temple
at
suffers
a
major
environmental
setback
when
poisonous
gas
leaks
from
a
Union
Carbide
plant
at
exchange.
Amritsar,
aPublic-sector
Sikh
shrine.
In the
ensuing
backlash,
Indira
Gandhi
is accident.
assassinated.
Bhopal,
killing
orholy
injuring
thousands
in the
country's
largest
industrial
Uncontrolled
1980-1984:
spending
focuses
on social
services,
agriculture,
transportation,
and Within
mining.
days,
Hindus
retaliate
by
massacring
thousands
of
Sikhs.
emissionslosses
from factories
aroundcompanies
the country
contribute
to major
Mounting
in state-owned
increase
deficits,
whichair
thepollution.
state tries to stem by borrowing
1986-1990:
The
Protection
Act
of
1986
brings
more effective
environmental
heavily.
A substantial
IMF loan
comes
with structural
adjustment
requirements.
Rajiv
Gandhi
1985-1989:
The Environment
Sikh
militant
movement
spreads
through
Punjab,
leading
to emphasizes
additional
economic
liberalization
and
pushes
for
development
of
the
technology
sector.
legislation. The
act establishes
comprehensive
Ministry ofescalate
Environment
andarea.
Forests
to administer
legislation
against
terrorists. aViolence
and repression
in the
Indian
soldiers
1985-1989:
Theenvironmental
government introduces
economic
reforms,
including
reduced quantitative
restrictions
on
and
enforce
laws
and
policies.
The
Environmental
Action
Plan
integrates
clash with Tamil militants, and thousands are killed and wounded. Insurgency breaks out
imports,
decreased
subsidies,
fewer
licensing
requirements,
the
sale
of
shares
in
select
public
enterprises,
environmental
considerations
with
development
strategies,
with
an emphasis
on thereputation
reduction of
as
fighting
spreads
between
Kashmiri
militant
and
army
troops.
RajivIndia
Gandhi's
is
and
tax
reforms.
Corruption
is
rampant,
with
officials
often
bending
the
rules.
continues
to rely on
industrial
pollution.
sullied
by an arms
kickback
scandal.
foreign loans
financecontract
development.
Economic
growth averages 6.6 percent per year.
1991-1995: to
The
government's
plan
to build
several hydroelectric dams, including the Sardar
1990-1995:
Rajiv Gandhi
is assassinated
by a trade
Tamilprotectionism,
terrorist. Riots
the North
follow
V.P.
1990-1994: Policymakers
question
state ownership,
andinlimits
on foreign
capital.
Sarovar Dam on the Narmada River, sparks protests by activists and local communities facing
Doubling
oil
prices
and
violence
at
home
bring
the
economy
near
crisis.
India
borrows
from
the
IMF,
Singh's
announcement
that
27
percent
of central
government
jobs
willjust
go over
to "Backward
relocation.
The
Supreme
Court
halts
construction
at
a
height
of
80
meters,
half
of
agreeing
to speed
liberalization.
The government
sells
off shares
inextremists
its companies
and opensa the
door its
to
Classes."
Hindu-Muslim
conflict
intensifies
when
Hindu
demolish
mosque.
originally
planned Bangalore
height. becomes a hub for the high-technology industry.
foreign investment.
Corruption
in Jammu
and
Kashmir
leads
to
the dissolution
ofincentives
the
stateforgovernment.
Direct
1996-2002:Reform
The
Ministry
Environment
and Forests
strengthens
adoption
of cleaner
1995-1998:
efforts of
show
positive results.
GDP growth
rises to 7
percent, and
inflation falls.
A new
presidential
rule
is
declared
in
1990
and
lasts
five
years.
technologies.
Air and especially
water pollution
remainservices,
the most
problems due
to
private
sector emerges,
in technology
sidesevere
by sideenvironmental
with government-sponsored
R&D
1996-2002:
The
1996
and
1998
elections
are
among
the
fairest
in
Indian
history,
but
are
industrialization,
rapid
urbanization,
and inconsistent
regulation
The isSupreme
Court
efforts
in Bangalore.
India
becomes a major
exporter of software.
Yetenforcement.
economic growth
constrained
by
inadequate
infrastructure,
Byzantine
bureaucracy,
andSarovar
high interest
rates.
nevertheless
marred
by
violence
at polling
stations.
Several
politicians,
including
Prime
allows construction
of the
controversial
Sardar
Dam
to resume
and reach
its originally
1999-2002:
The government
favors foreign
infrastructure
andregional
high technology
consumer
Minister
Vajpayee,
are
charged
with investment
corruption.in Religious
and
unrest over
escalates
in
planned
height
of
138
meters.
products. Deregulation and decentralization of the economy continue. Growth falls slightly to 6 percent in
Gujarat,
Assam,
Kashmir
despite
cease-fires
to by industrial
some rebel
groups.
2000 because
of anand
erratic
monsoon,
a global
slowdown, agreed
and inefficient
capacity.
Prime Minister
Vajpayee announces an ambitious goal of 9 percent annual growth.
TRADE POLICY
MONEY
1939-1947: The rupee is linked to the British pound, resulting in "sterling balances"
from India's trade surplus, which are kept under British control in London.
1939-1946: Britain restricts its colony's trade with other nations by controlling the "sterling
1948-1951: India nationalizes the Reserve Bank and devalues the rupee by 31
balances" from India's trade surplus. U.S. imports, however, increase, financed by lendpercent.
The Reserve
Bank
andII,administers
a restrictive
policy
lease agreements.
By the
endformulates
of World War
trade between
the Unitedmonetary
States and
India
to
fight
off
inflationary
pressures
and
promote
stable
prices
and
higher
production.
is twice its prewar level. India remains dependent on imported machinery, chemicals, and
1952-1960:
The government
other basic inputs
to production.seeks to revamp the banking system to stimulate
development
andisforms
severalmember
specialized
to provide on
credit
to industry,
1947-1951: India
a founding
of theinstitutions
General Agreement
Tariffs
and Trade
agriculture,
small business.
Inflation
remainstolow.
(GATT),
yet and
implements
protectionist
measures
reduce foreign competition. India
1961-1970:
macroeconomic
is geared
toward
growth
and
accounts
forIndia's
2.5 percent
of world policy
exports,
primarily
jute, low
tea,monetary
and cotton
textiles.
Engineering
goodssector
represent
1 percent
of India's
exports.
moderate public
deficits.
Inflation
remains
low, and the current account
1952-1960:
The government
emphasizes
self-sufficiency
overcountry
foreign takes
trade. the
India's
registers a surplus.
For the most
part, capital
entering the
formimport
of
controls
andIndira
tariff Gandhi
policy stimulate
the the
production
import-substitution
goods
by local
official aid.
nationalizes
bankingofsystem,
which expands
rapidly.
manufacturers.
The
government
also
imposes
strict
controls
on
exports.
1971-1979: The rupee is overvalued as part of an import-substitution strategy. The
1961-1969:
of world
trade
shrinks drastically
as the
country
becomes
isolated
governmentIndia's
tightlyshare
controls
foreign
exchange
transactions,
and
the Central
Bank
from the international market. Although exports cover the costs of residual import
closely manages the exchange rate.
requirements, they are limited. Government-owned industries face little competition or
1980-1985: While export growth is slow, an increase in domestic petroleum
pressure to maintain efficiency. As a result, Indian exports compete on the basis of price
production
and reduced petroleum imports keep the trade deficit in check. The
rather than quality.
current
account
deficit
stays and
low. Tax
receiptsbalance-of-payment
rise when comprehensive
tax encourage
reform
1970-1979:
Rising
oil prices
subsequent
difficulties
tightens
enforcement,
and
to lower
taxes
withpolicy
greater
compliance.
India to promote
exports.
Yettaxpayers
the exportrespond
sector suffers
from
India's
of reserving
the
The
rupee
is
allowed
to
depreciate
sharply
in
conjunction
with
economic
manufacture of most labor-intensive, low-tech products for the "small-scale sector" to
liberalization.
promote employment. These small producers are unable to compete for contracts with
1986-1990:
Progress
in tax collection is undermined by renewed tax evasion and
large,
international
buyers.
1980-1984:
India's share among
of worldauthorities.
trade falls toThe
0.4government
percent. Exports
finance
of
insufficient coordination
responds
to 60
thepercent
growing
imports.
1984, Rajiv
Gandhidebt
implements
to stimulate
India's nascent
high-tech
deficit byByborrowing.
Foreign
doubles.changes
India becomes
increasingly
vulnerable
to
industry.
The
government
removes
import
duties
on
select
electronic
goods
and
reduces
external shocks. Increasing oil prices, slow growth in countries trading with India, and
duties
several critical
electronic
companies
are allowed to partner with
politicalonuncertainty
put India
on theparts.
vergeIndian
of a currency
crisis.
foreign
companies.
1991-1995:
India undertakes broad fiscal reform, including reforms to the tax system
1985-1989: The beginnings of trade liberalization are visible. The government reduces
and cuts in the public sector deficit. To boost exports, the government devalues the
import duties and widens investment opportunities for the private sector. The reduction in
rupee by 19 percent and moves it toward partial convertibility to foreign currency. In
tax rates and import deficits is financed through commercial borrowing. Liberalization of
1993,
government
devalues
the rupeegoods.
again and introduces a market-determined
importsthe
extends
to capital
and intermediate
exchange
rises toreform
11 percent.
1990-1994:rate.
The Inflation
1991 economic
package further liberalizes trade. The government
1996-2002:
The
fiscal
situation
deteriorates.
public-sector
risesand
sharply
reduces tariffs and trade barriers, eliminates The
licenses
for most deficit
industries,
slashes
due to weak
and
a lack of
expenditure
both theoppose
subsidies
for revenue
domesticperformance
products and
exports.
Many
powerful control
vested at
interests
central and state
government
levels.
Inflation
falls to
3.5 percent
1999, but bans,
then for
liberalization,
however,
and trade
remains
somewhat
regulated.
The in
government
example,
import of many
consumer
rebounds.the
Public-sector
debt
exceedsgoods.
80 percent of the GDP.
1995-2002: To meet WTO commitments, India agrees to eliminate quantitative restrictions
on many consumer and agricultural product imports, while retaining export subsidies and
incentives. Growth of Bangalore's high-tech industry leads to the export of software and
supercomputers. The United States is India's largest trading partner, followed by Japan,
the European Union, and OPEC states.