India celebrated its 76th Independence Day yesterday; the perseverant zeal and fortitude of our freedom fighters led us to our freedom from 200 years of British rule.
But what about the story after our freedom?
In 1949, the RBI was nationalized which was considered to be a premature decision,
In the consequent year, the planning commission was formed which is replaced by NITI Aayog now which is deemed to be much more efficient than the former commission.
In 1953, the unfortunate decision to nationalize Air India was taken which finally is back in the Tata-fold after 69 years.
Then, Dhirubhai Ambani started a yarn trading business-Reliance Commercial Corporation-from a 500 sq ft office in Masjid Bunder in Mumbai in 1958 with a dream to establish India's largest company, and the rest is history.
In 1986, Sensex was launched which boomed after the 1991 liberalization of the economy.
Pre-1991, India was a mixed economy with socialism in its veins. Its average income was 18 percent of the world's average at independence which fell until the 1990s only to climb back up to about 18 percent. But the comeback started after 1991s when India opened up its economy under the PV Narishma Rao-led government. The liberalization eased the socialist controls and the private sector was finally allowed more space to breathe., but the push wasn't enough, as compared to our counterpart China, which was at a similar level pre-1990.
This shift from the Nehruvian model to a more neoliberal model marked a cusp between the old and new India. Although we are still under the shackles of socialism, the policies brought forth are finally bringing the much-required changes to our economy.
Now let's have a look at some data:
India was clearly behind both UK and even China in 1600 which shows how colonialism hurt India. Only in the second half of the 19th century and the early 20th century did India witness a rise which too was largely reversed just before Independence in 1947.
India is a success story in terms of the PPP only to be overshadowed by China.
Recently IMF published a paper titled, Pandemic, Poverty and Inequality: Evidence from India
The most important conclusion from the paper is both extreme poverty and lower-middle-income poverty reduced dramatically. Figuratively, extreme poverty in India was as low as 0.8% in 2019 without witnessing a change in 2020 despite the pandemic by adopting the Pradhan Mantri Garib Kalyan Yojana (PMGKY) model. This leakage-proof food subsidy program, accelerated by Aadhar, will be a stand-out legacy of this government.
In 2014, India launched the "Make in India" mission was announced to invite manufacturing biggies to build in India and export to the world and we can clearly witness its success today. Then the infamous Demonetisation happened which was aimed to weed out the deep-rooted corruption in the system, the jury is still out on whether it was a success or not but one of the greatest ripple effects it had was the launch of UPI, which is currently the most powerful tool of our nation, as it has been launched in countries like France, UAE, Singapore and it'll aim to dethrone the monopoly of the SWIFT*.
In 2017, GST was passed, although it is still a work in progress the benefits of it are immense.
2021 was a year of startups and IPOs, 42 startups in a wide range of sectors, from fintech to edtech, were born in 2021. Four digital IPOs-Zomato, Paytm, Nykaa and Policybazaar debuted in 2021. Also, Nykaa's Falguni Nayar became the richest self-made woman in India after the IPO.
So what lies ahead for us?
India will aim to be a developed nation in the next 25 years. with policies to support domestic production in power, defense, and digital technology. The youth needs financial literacy, the country needs to replace the colonial era policies, financial literacy needs to be more widespread, financial services should be even more accessible, and we need to build more capacity, more banks, and more NBFCs.
We are very much on track to become the third largest economy by surpassing UK, Germany, and Japan.
The future is bright for our country.
*(SWIFT or Society for Worldwide Interbank Financial Telecommunications, is a Belgian cooperative society, overseen by the 11 national banks of G-10 economies, and jointly owned by the more than 11,000 financial institutions and banks that use it.)
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