The 1960s was one of the most eventful and perhaps the most troublesome decade in India’s post-Independence era. This decade saw major events like the two wars – one each with China and Pakistan, the annexation of Goa, the deaths of Nehru and Shastri, the Bihar famine,the abolition of privy purses etc. Near the end of the decade, the then prime minister of India, Indira Gandhi, took another major policy decision -- the bank nationalisation. In 1969 the Government of India decided to nationalise 14 major private commercial banks.
Bank nationalisation was not a new concept for India as in 1955 the Imperial Bank of India was nationalised and renamed as State bank of India (SBI). In 1959 seven subsidiaries of SBI were formed by nationalising seven state banks. But it was the 1969 nationalisation that caused maximum impact on political and economic spectrum so much so that even Jayaprakash Narayan called this step as ‘a masterstroke in political sagacity’.
Decision to nationalise the banks, which has both political and economic undertones, has to be analysed by considering the then prevailing conditions.
After centuries of foreign rule and economic exploitation, the independant India had just started its march towards socio-economic development with a dream of creating equitable society by alleviating the widespread poverty. India had adopted the path of planned economic development which envisaged social i.e. governmental control over the means of production. First two plans laid stress on creating heavy industries which would serve as base of economic development.
From third plan major emphasis was given on agricultural development with the aim of achiving self-sufficiency in food production and thus tackle the grave issue of ...
... middle of paper ...
... like Uttar Pradesh, Bihar, Orissa etc. After nationalisation the professional management made way for public maganemet which caused lower efficiency. As social welfare took precedance over profits many banks started suffering heavy losses. The political interference in daily administration of banks increased which led to rampant corruption. Although the banking habits in rural areas improved significantly menace of illigal moneylenders could not be curbed in large parts of India.
In conclusion, it has be accepted that despite all the demerits the nationalisation of banks was a major step in towards the creation of equitable society. Public sector banks later went on to become catalyst in success of green revolution. In an agrarian economy, bringing banking system under public control was a major shot in the arm for the socialist government of Indira Gandhi.
This bank held government money and controlled the economy by making it easier for local banks to borrow money from it to loan it to manufacturers and factories. As the idea arose the cabinet, Jefferson protested that such a bank was unconstitutional because it favored the north over the south since the bank did not loan money to farmers for land expansions. Being true as it is, the bank drastically boosted our economy and had a great future for our nation. Since it was unconstitutional, a compromise said that the bank would only be funded for 20 years. So as soon as Andrew Jackson was elected, he destroyed the bank. In response to this, our nation suddenly falls into a major depression. No one had jobs and the economy was dying. This showed the brilliance of the national bank and how much it helped our economy. Adding onto this, the bank began the formation of the Federalist and Democratic
69. The Bank proved to be very unpopular among western land speculators and farmers, especially after the Panic of 1819 because it was one of the major contributors to inflation. It held federal tax receipts and regulated the amount of money circulating in the economy. Some people felt that that the Bank, and its particular president, had too much power to restrict the potentially profitable business dealings of smaller banks.
The issue of whether or not America should have a National Bank is one that is debated throughout the whole beginning stages of the modern United States governmental system. In the 1830-1840’s two major differences in opinion over the National Bank can be seen by the Jacksonian Democrats and the Whig parties. The Jacksonian Democrats did not want a National Bank for many reasons. One main reason was the distrust in banks instilled in Andrew Jackson because his land was taken away. Another reason is that the creation of a National Bank would make it more powerful than...
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).
Imperialism in India lasted 190 years, from 1757 to 1947. India was taken over by the British for their interests in the potential for power and goods that were available there. However, the British were pressured to take India by some of Europe, including the French and Dutch, because they all wanted to share the resources that could be removed. The overall effects on the British imperializing India were negative.
In addition to the powerful coordination the Bank possessed, it influenced interest rates for loans to the working class and the rate of inflation in the nation. Because of the use of various bank notes, variegating from bank to bank due to the lack of national currency and mixture of specie, people trusted that each bank would be able to “cash in” their bank note for specie. This did not always hold true, but the Second Bank of the United States was the most trusted of the banks to supply specie in exchange for their bank notes. Because of this most people, in order to protect themselves from losing money, would exchange state bank notes for notes issued by the Second Bank. However, this meant that the Second Bank could threaten the state banks by demanding more gold, which might cause for their bankruptcy. As a result, the state banks were pressured into not being able to over issue their bank notes, which inevitably decreased their importance and power in the nation by decreasing the circulation of their bank notes. This was the greatest argument posed by the leaders of the state banks against the Second Bank of the United States (Roughshod 2).
[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
At that time National Savings and Investment Bank was the only bank which was incorporated by a Parliament Act. There was no regulatory framework which led private sector savings banks to carry out its activities. The main problem that PSDB had to face was that the bank did not have “parate execution” rights which allows to sell mortgage property when loans are defaulted by customers. This “parate execution” gives the rights to recover the loan which defaulted by the customers by passing a board meeting resolution and placing paper advertisement informing about the decision. Since Pauma bank did not have that right, it had to consult civil law to recover loans but it was not practical for the bank.
...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 Bank of England was nationalized in 1946, followed in 1947 by the coal mines, an industry that was unprofitable in recent years that even the owners are pleased to receive payment in compensation. The railways had recently relied heavily on public subsidy, and the gas and electricity companies had in many cases developed as municipal undertakings. They seem of proper national concern. The iron and steel industry proved more controversial, being denationalized and renationalized in subsequent years.
The decision to grant independence to India was not the logical culmination of errors in policy, neither was it as a consequence of a mass revolution forcing the British out of India, but rather, the decision was undertaken voluntarily. Patrick French argues that: “The British left India because they lost control over crucial areas of the administration, and lacked the will and the financial or military ability to recover that control”.
As agriculture has become more intensive, farmers have become capable of producing higher yields using less labour and less land. Growth of the agriculture has not, however, been an unmixed blessing. It, like every other thing, has its pros and cons. Topsoil depletion, groundwater contamination, the decline of family farms, continued neglect of the living and working conditions for farm labourers, increasing costs of production, and the disintegration of economic and social conditions in rural communities. These are the cons of the new improved agriculture.
This can not be done with the same ineffective tactics that were used in the past, so that’s why people are developing new ways to eradicate hunger. When the Second International Conference on Nutrition (ICN2) was held, they discussed the nutrition component and how important it is that it is not overlooked. By paying attention to nutrient-dense foods and recognizing the different entry points for improving nutrition, the ICN2 argues the world will be one step closer in achieving the Sustainable Development Goal. Some of the entry points they discussed include “the promotion of crop diversification…, strengthening local food production and processing, and exploring regulatory or voluntary instruments for promoting healthy diets” (goals 2). Promoting the nutrition aspect of the goal can help achieve it because nutrients are what keep people alive and
Here in this paper we will try to explain and understand the relevance of the various underdevelopment theories and different attributes related to the terms of the Indian Context. Before proceeding directly to the underdevelopment theories, it would be important for us to discuss Karl Marx’s proposition.... ... middle of paper ... ...
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.