India's Rollercoaster ride from 1947-2022

 Journey of
Indian Economy from 1947 to 2022

From a third world country to one of the largest economies in the world the Indian Economy had a rollercoaster ride from 1947 to 2022. Celebrating 75th Independence Day this 15th August, lets have a look from where we were and where are we now.

1. Independence Phase 

 After the independence, India's GDP stood at around ₹2.7 lakhs crores. In 1949 the total foreign Investments stood at around ₹256 crores, Forex Reserves in 1950s were at around ₹1,029 crores. During 1950 and 1960 India emerged as a net exporter of food grains with total food grain production of around 54.92 million tonnes.

2. 1969

India witnessed its worst droughts in the 1960s resulting in an increased dependence on west for the supply of food grains. This crisis led India to be self sufficient in food grains with the help of green revolution. During this phase the Indira Gandhi government nationalized 14 commercial banks including  Bank of Baroda, Allahabad Bank, Canara Bank, Central Bank of India, and the Punjab National Bank, with the aim of boosting the agriculture sector.

3. 1991 (LPG reform)

Without the Liberalization Privatization and Globalization (LPG)  reform Indian economy's journey is incomplete. With rising fiscal deficit ( from 9% of GDP in 1980-81 to 10.4% in 1985-86 and 12.7% in 1990-91) and devaluation of currency and having the foreign exchange reserves that could barely finance 3 weeks worth of imports,  the situation was so grim that Indian government has to mortgage some 20 tonnes of gold for $240 million. Then the Indian government introduced the LPG reform to bring the economy back on track by opening new doors for more opportunities. This resulted in inflow of foreign finance and thus leading to a boom in the stock market.

4. Great Recession (2007-08)

During the period of Great Recession when the largest economies of the world were hit very bad the impact on India's economy wasn't much because the exports accounted for just 15% of GDP. But the government in December 2008 infused about ₹3 trillion into the system that resulted in inflation at 14% and as a result the indian rupee lost its value.

 
5. 2016 Demonetization

 On November 8, 2016 the Indian government declared that ₹500 and ₹1000 rupee notes will not be legal tender anymore. This decision affected even the small vendor and high profile businessman. Sensex crashed nearly 1689 points and Nifty plunged by over 541 points 

6. 2020 Covid-19 Pandemic

Covid-19 was another challenge when all the economies were collapsed with nearly zero production. The 1st wave of the pandemic rose poverty in rural and urban areas by 15% and 20% respectively and nearly 23 crore people were pushed below the poverty line. Though compared to other economies, the recovery of Indian economy was quite stable and witnessing a V shaped recovery.