Evolution of Indian Economy

The following points highlight the four important thoughts on evolution of Indian economy. The thoughts are: 1. Classical Economic Thoughts of India 2. Economic Thoughts of Medieval Period in India 3. Economic Thoughts of Nineteenth Century in India 4. Indian Economic Thoughts of Twentieth Century.

Thought # 1. Classical Economic Thoughts of India:

Classical economic thoughts of India are based on the ideas of Vedas, Upanishads, Epics etc. During the reign of Chandragupta, i.e., on 300 B.C., Kautilya wrote a valuable book on economics entitled “Arthashastra”. This book depicts a complete picture of the rural and agrarian economy of ancient India relating to its agriculture, land relations, cottage industries, economic structure etc.

Most of the classical economists of the world broadly accepted the ideas of Kautilya as a base for productivity of labour, exchequer (Revenue), tax, price determination, agriculture etc. Kautilya’s “Arthashastra” and various other ethics were primarily’ concerned with the problem of production and exchange while the other religious discourses primarily dealt with the problem of consumption and distribution.

Indian philosophers during ancient times stressed much on the equal distribution of produced commodities among the general masses of the society.

Thought # 2. Economic Thoughts of Medieval Period in India:

The Medieval period, which had its start from eighth century and continued upto eighteenth century, could not throw much light on the evolution of Indian economic thoughts. During this period kings like Ala-u-din Khilji, Mohammad Bin Tuglaque, Ferozshah, Shershah, Akbar etc. introduced certain measures for economic reforms for the upliftment of the Indian economy.

Among various measures for economic reforms introduced during this period, land reforms and revenue reforms measures off Shershah, revenue reforms and other economic reforms of Akbar were remarkable.

But most of the Indian kings and queens of medieval period were very much preoccupied with immaterial objects at the cost of material objects totally leading towards unnecessary wastage of resources. Thus after Kautilya near about 2000 years have passed away without having any serious development on Indian economic thoughts.

Thought # 3. Economic Thoughts of Nineteenth Century in India:

Since the inception of British regime in India, i.e., during the nineteenth century, modern economic thinking started to develop gradually. During those days economic thoughts of western countries started to influence gradually the development of Indian economic thoughts.

Moreover, Indian economists also started to concentrate on analysing the problems of poverty and colonialism prevailing in the country during those days.

During this nineteenth century some renowned Indian economists like Dadabhai Naoroji (1825-1917), Mahadev Govinda Ranade (1866-1915) and Ramesh Chandra Dutta (1848-1919) had analysed the problem of poverty in India with a new dimension.

Dadabbai Naoroji made a detailed analysis on the exploitation of Indian economy by the British regime and advocated for popular protectionism. Naoroji was also the first person in India who made an estimate of national income in India out of his personal effort.

Mahadev Govinda Ranade, another famous economist of the nineteenth century, also criticised the free trade policy followed in India and also reflected colonial light in the system of international division of labour. Ranade realised the importance of various psychological and institutional factors on the economic development of India.

He had also mentioned the responsibilities of the Government for attaining such economic development. He had analysed the importance of attaining economic development. Thus, Ranade’s contribution to economic thought was a synthesis of British policy of free trade and colonialism and the some other ideas of German historical school.

Moreover, Ranade was also the first Indian economist who thought about the attainment of welfare and economic planning in India.

After Ranade, Ramesh Chandra Dutta was another economist of nineteenth century who in his famous works “Economic History of India”, made a detailed analysis on the “Drain Theory” of Naoroji. In his opinion, the agricultural structure of India was very much responsible for its economic backwardness and low level of living.

Mr. Dutta rightly advocated for the introduction of land reform measures for the upliftment of the conditions of agriculture and also for rapid industrialisation for attaining development and diversification of the Indian economy.

Thus from the foregoing analysis, it has been revealed that the Indian economists of nineteenth century had realised those genuine economic problems of India which were very much connected with British colonialism and they also advocated some measures for removing these drawbacks of Indian economy and also for its upliftment.

Thought # 4. Indian Economic Thoughts of Twentieth Century:

The nineteenth century Indian economic thoughts have laid the foundation stone of Indian economy in the twentieth century. Different economists of twentieth century have contributed various ideas about different problems of the Indian economy. Among these economists Radha Kamal Mukherjee was one who had contributed a lot for the establishment of the base of Indian economic principles.

His two books entitled “The Foundation of Indian Economics” (1916) and “Principles of Comparative Economics” (1921) are worth mentioning. D.R. Gadgil was another economist who made a huge contribution towards planned economic development of India.

K.G. Khambatta and K.T. Shaw had successfully analysed the various causes of backwardness of Indian economy in their books “Wealth and Taxable Capacity of India” (1924) and also estimated the national income of India during the pre-independence period.

After that Dr. V.K.R.V. Rao wrote one book entitled, “India’s National Income” (1939) in which he made an attempt to solve all disputes connected with national income estimation in India. R.C. Desai also prepared a national income estimates during 1931-40.

Moreover, with the growth of Russian Socialists economy alongwith its successful implementation of economic planning a good number of Indian economists opined in favour of socialists economy and economic planning for our country.

Among these economists the name of those personalities like D.P Mukerjee, B.N. Ganguly, Gyan Chand are worth mentioning. Mr. Bisweswaraier is another Indian economist who expressed his opinion in favour of socialistic planned economy for India in his book entitled “Planned Economy for India” published in 1936.

P. C. Mahalanobis was another great Indian economist of the present century whose contribution towards the development of Indian economic thought received much international acclaim and fame.

Mr. Mahalanobis was appointed by the Government of India as Chairman of National Income Committee in 1949, who along with its two other members, V.K.R.V. Rao and D.R Gadgil made first systematic official estimates of national income in India and submitted its final report in 1954. Mr. Mahalanobis also prepared the model for economic planning in India and the same model is still being followed with little variation.

Moreover, in recent years, a good number of Indian economists such as I.G. Patel, L.K Jha, A. Sen, PR Brahmanand, P.T. Lakdawala, S. Chakraborty have made significant contributions towards analysing various economic problems and issues of Indian economy which have received much international praise and recognition.