Throughout the short history of an independent India, they have relied upon loans to grow their economy. Due to their prior colonization by Great Britain, they received most of their economy from Britain and there was no true need to receive loans. Since the independence of India from its mother- country, India has strongly relied upon the IMF and World Bank to grow its economy to the booming status that it has today.
Until the middle of the 20th century, British investment and trade that was introduced by the British fueled India’s economy. When India gained its full independence in 1947, India was left to find their own means to financial stability. For this, India would have to turn to the World Bank to receive loans to build much-needed infrastructure, create viable international companies and fuel their industry. According to the IMF, India has the second largest labor force in the world with 486.6 million laborers. In order to reach this height, India had no choice but to ask for and receive loans from the World Bank. Since its independence, India has received hundreds of billions of dollars in loans and credit. Currently, India has about 26 billion dollars in loans and around 40 billion dollars in credit. Many of this loan money and credit has gone towards the infrastructure of India in order to begin construction of an economic stronghold within cities. In recent years, the money has gone towards agriculture, steel/ iron, railways and power. Many of the citizens within India do not even have the luxury of electricity due to the vast ruralness of India. Without the loans and credit of the World Bank, India would not be at its current economic level.
There are a multitude of circumstances that have led to the economic surge within India, but the main factor is loans and foreign investment. With the help of the international community, India has grown to the 11th largest economy in the world and the 3rd largest in Asia. Not only has India grown to become of the leading economies in the world, but also it is also the fastest growing. Due to its recent economic success, India has been able to pay back many of its previous loans. Until around 2010, India saw its economy grow at a rate of about 7-7.5% a year, but since then has settled. In 2014, it is expected that “the economy is to to expand by 5.
Though the world economy as a whole has grown in recent years, a factor that is not taken into account is that the number “of the poor in the world has increased by 100 million” (Roy 3). In other words, the gap between rich and poor is widening. For India, this has startling implications. Though it is a nation that is developing in many ways, it also is a nation blessed with over one billion citizens, a population tally that continues to grow at a rapid rate. This population increase will greatly tax resources, which can create a setback in the development process. The tragedy, of course, is that the world is full of resources and wealth. In fact, Roy quotes a statistic showing that corporations, and not even just countries, represent 51 of the 100 largest economies in the world (Roy 3). For a country struggling to develop, such information is disheartening. However, there is also a more nefarious consequence of the growing disparity between rich and poor, and power and money being concentrated in the hands of multinational corporations: war is propagated in the name of resource acquisition, and corruption can reign as multinationals seek confederates in developing countries that will help companies drive through their plans, resulting in not only environmental destruction but also the subversion of democracy (Roy 3).
Between the years 1600 and 1950 british used the land of India to their advantage. During this time, British expansion was at its prime. As time went on Indian culture slowly morphed more and more into British culture. British Tradition became the new normal for the people of india. Most of the indian inhabitants worked as plantation slaves, where they spent their life starving and sweating. They starved because the crops that they harvested were sold by british plantation owners. Cash crops like Tobacco and wheat were harvested and sold because they were in high export demand. India was one of many huge sources of british income because the terrain was ideal for farming. Not only that but they had all of the indian people there to do their
In India the British colonization had more positive affects than negative. For Instance, When the British colonized India they built 40,000 miles of railroad and 70,000 miles of paved roadway. As a result the British made it much easier to travel across India. Another good affect that the British had on India was the jump in agriculture, through large scale irrigation works. About 30 million acres were put into cultivation. Industrialization had also begun. Because of all these reasons almost no famine existed in British colonial India. The English also built many institutions in India and setup a productive government. "They have framed wise laws and have established courts of justice"(The Economic History Of India Under Early British Rule). In addition to all these positive affects, Britain also linked India to the modern world through modern science and modern thought.
The IMF plays a pivotal role in the international economy system. As its initial goal about reconstructs world’s international payment system, such as contributes to surveillance of the global economy, to stabilize exchange rates, to lend money to help countries to resolve emergency situation but with certain conditions and should pay back in a short time. The IMF has done a large number of things to help the world economy, not only in the western countries, but in many developing countries as well.
[6] Kripalani, Majeet & Egnardio, Pete. The Rise Of India. Business Week Online. December 8, 2003. http://www.businessweek.com/magazine/content/03_49/b3861001_mz001.htm
Subramanian, Arvind. India’s Economy is stumbling? The New York Times. August 31, 2013: A19. Print.
India, the second highest populated country in the world after China, with 1.27 billion people currently recorded to be living there and equates for 17.31% (India Online Pages 2014) of the world's population, but is still considered a developing country due to it’s poverty and illiteracy rates. As these nations continue to grow at rates that are too fast for resources to remain sustainable, the government’s in these areas wi...
...an HDI of 0.36. These discrepancies in levels of development have led to an exodus of people, from less developed areas to the areas that have been benefitted by development. This situation seems to depict that predicted by the Dependency theory in which the developed countries progressed due to the exploitation of peripheral nations; the same seems to be happening in India. The states that are wealthier are exploiting the poorer states. It would be difficult to imagine India having the economic status that it now has, if it was not for the terrible working conditions and wages at which the Indians are willing to work and the massive work force available in the country. Now that India has seen economic growth the government should start taking care of its citizens by implementing policies that protect the labor rights of the workforce.
The IMF was not designed to be an aid agency but its role in economic
“If you owe your bank a hundred pounds, you have a problem; but if you owe it a million, it has.(1)”
This report will explore the theoretical approach of Post-colonialism in economic development. The report with the help of India as a case study will aim to explain how the theory of Post-colonialism has shaped understanding and approaches to international development.
“…increasing international trade and financial flows since the Second World War have fostered sustained economic growth over the long term in the world’s high-income states. Some with idle incomes have prospered as well, but low-income economies generally have not made significant gains. The growing world economy has not produced balanced, healthy economic growth in the poorer states. Instead, the cycle of underdevelopment more aptly describes their plight. In the context of weak economies, the negative effects of international trade and foreign investments have been devastating. Issues of trade and currency values preoccupy the economic policies of states with low-income economies even more than those with high incomes because the downturns are far more debilitating.1”
We must avoid the temptation if at any given time our individual national economy is more prosperous than those of our other partner states, to be so arrogant as to forget that our economic situation may be suddenly reversed and that therefore we will soon need close links with our partner states in matters concerning both the intra-regional and extra-regional spheres. West Indian history abounds with instances of countries suffering sudden reversals of their economic fortunes.
Since the poor people do not have steady jobs, their incomes are irregular and unpredictable, and banks have no collateral against which the loans can be given out; thus the banks do not want poor clients from both rural and urban areas. Furthermore, the “geographical distance, the widespread illiteracy, and the diverse backgrounds of borrowers” (in this case the rural poor) and the frequency of high cost transactions make it difficult and non-desirable for the banks to give out the loans to rural poor communities. Banks also believe in the fact that the government’s rules and regulations make it difficult to distribute loans to the poor. India’s rural poor have their own financial needs that are influenced by their location, living situation, and their availability to resources and opportunities.
“India was a latecomer to economic reforms, embarking on the process in earnest only in 1991, in the wake of an exceptionally severe balance of payments crisis”(Ahluwalia 2002).The idea being simple ,there was a need to ...