The economy of India has been on a roller-coaster ride from the time when Britishers arrived to the present. India’s contribution in the world GDP was almost 25% – but it came down to 2% when the British left. This is how callously the colonizers exploited our economy. India was attacked by many foreigners since ancient times, but this foreign incursion of British was a particularly devastating blow.
The reason for this is that they (British) remained perpetual foreigners in comparison to Turks, Khiljis and Mughals who settled and assimilated in our soil – the reason India is now known as the melting pot of races. The British used three ways to exploit India economically. Firstly, India was made importer of finished goods. Secondly, India was made exporter of raw materials for British industries, and thirdly, India was a land of investment by foreign capitalists.
As a result of these policies, Indian economy suffered several repercussions:
a) It brought several disastrous land revenue policies like zamindari, Mahalwari and ryotwari which were fatal for farmers – as they were compelled to give taxes at an exorbitant rate.
b) Patronage by kings and princes which acted like oxygen for the artisans, craftsmen and workers dwindled due to the Doctrine of lapse and subsidiary alliance. As a result they became unemployed.
c) One-way traffic principle of British was egregious – as Indian goods in Britain were taxed heavily, but on the other hand British goods were tax free – which made Indian goods costly.
d.) Commercialization of agriculture – which means cash crops like indigo were forced by British to be grown by Indian farmers.
All these deleterious efforts completely destroyed the Indian economy.
Later in 1990’s under Narsimha Rao government, Indian economy was opened up by Manmohan Singh the then Finance Minister of India – when the LPG (Liberalization, Globalization and Privatization) Reform took place. From here onward the Indian economy moved at a jet propelled speed. But since a decade, due to the global slowdown, West Asia crisis, rise in crude oil price, jobless growth and advancements in automation and software, we are now witnessing some hiccups in Indian economy like unemployment and fall of Rupee in the international market.