India which was, at one time, tagged as a “Third world country”, has now made it to the list
of one of the most famous ones today. This journey had various downfalls and aggressive
changes both in financial and socio-economical realities.
Some milestones the Nation saw during this journey of 75 years are:
1948 – Industrial Policy Resolution proposed a mixed economy
This was the most important time for India as it was Independent India’s first resolution
under the supervision of the first prime minister of India, honorable Jawaharlal Nehru.
Earlier, eight influential industrialists proposed the Bombay plan including Tatas and Birlas,
who viewed the economy to be a substantial public sector one, with state supervision to
protect and claim fair trade.
Later, in 1948, Industrial Policy Resolution proposed a mixed economy for rapid
development of heavy industry, by both public and private sectors.
1950 – Planning commission was set up to oversee five-year plans
Planning commission was instituted by the government to formulate India’s five year plans.
India’s emergence from a beaten country during the days of the Raj to an independent nation with ambitious developmental goals, has a vital contribution from the Planning commission.
In 2014, NITI Aayog replaced the planning commission and became a more robust think tank
that works together with stakeholders for developing the country.
1951 – Agricultural focus and irrigation boost.
In 1951, the first five-year plan was launched focused on agriculture and irrigation in order to
boost farm output, the reason being India was losing foreign reserves on food-grain imports.
In 1956, a second five-year plan was launched which laid the foundation for economic
modernization with a hope to serve India’s long-term growth.
1953 – Nationalization of airlines.
In May, 1953 Air corporation act came into force to make Aviation a power of India. Several
airlines named Air India, Air Services of India, Airways (India), Bharat Airways, Deccan
Airways, Himalayan Aviation, Indian National Airways, Kalinga Airlines, and the Air India
International merged and were named as Indian Airlines and Air India International. They
were taken over by the Government of India, and Aviation ceased to be within the purview of
1957, Mundhra scandal, independent India’s first big financial scam.
Independent India’s first big scam took place in 1957 known as Mundhra Scandal. Evidence
was found that Life Insurance Corporation (LIC) had bought fraudulent stock worth Rs 1.24
crore in six companies owned by Kolkata-based Haridas Mundhra, without consulting with
its investment committee.
Due to this event, T T Krishnamachari, the finance minister resigned.
1964 – persisting inflation, food shortages, the war with China had exposed more of
India’s economic weakness.
Major events occurred after Nehru’s demise, Lal Bahadur Shastri became India’s Prime
India was already suffering from quick industrialisation of the nation causing a large
reallocation of funds away from the farm sector. With the same food shortages worsened,
inflation spiked and China had exposed more of India’s economic weakness.
There, the new prime minister moved away from centralised planning and price controls, and
he renewed focus on agriculture.
The Reason for this was that India was on the verge of mass famine, and food aid imports
from the US were beginning to hit India’s foreign policy autonomy.
1966 – devalued the Indian rupee from Rs 4.76 to Rs 7.50 to a dollar in one swoop.
It was a dire situation as the wars had left the economy severely weakened and the vital
monsoon rains had also failed, worsening food shortages and causing a sharp spike in
Food grains were required to be imported and seeking foreign aid also posed a serious risk to India’s political economy.
Indira Gandhi piloted a number of policies in an attempt to trigger economic growth. In an
attempt to come out of the crisis the rupee devalued to Rs 7.50 to a dollar in one swoop.
1969 – Nationalization of banks.
From 50s to 91, several industries, companies were nationalised by the government. Not only airlines but many other sectors were nationalised such as banking, life insurance, general insurance and mining.
Indira Gandhi announced nationalisation of 14 leading banks. The move was aimed to
encourage businesses in order to serve the needs of the economy.
1991 – India asked for a $1.8 billion IMF bailout loan which demanded de-regulation in
In 1991, the Soviet Union collapsed, hitting a spike in oil prices, resulting in a major balance-
of-payments crisis for India, which found itself facing the prospect of defaulting on its loans.
India had applied for a $1.8 billion bailout loan from the International Monetary Fund (IMF)
which demanded de-regulation in return.
New reforms were introduced with Manmohan Singh being finance minister. These reforms
had an aim to liberalise the Indian economy by doing away with the Licence Raj.
Tariffs and interest rates were introduced as well, as it ended many public monopolies,
allowing automatic approval of foreign direct investment in various sectors.
2008-09 – India’s fiscal deficit touched 6% from just 2.7%
The Government of India announced three stimulus packages in the space of three months
between December 2008 and February 2009, totalling Rs 1,86,000 crore or 3.5% of the
India’s fiscal deficit touched 6% of the GDP in 2008-09, from being just 2.7% in the previous
year. Subsequent to which RBI eased monetary conditions dramatically and the government
continued with the stimulus in 2009-10 too which led to fiscal deficit touching 6.4% of the
However, the government failed to close the tap and the fiscal stimulus was never
2016 – Demonetization
November 8, 2016, Prime Minister Narendra Modi appeared on national television and said
all Rs 500, Rs 1,000 high value notes will turn invalid by midnight. All of us remember the
rush we felt during that time.
The move was aimed at flushing out black money hidden from the taxman. This
announcement led to nearly 86 percent of the currency in circulation becoming invalid by
2017 – Goods and services tax introduction.
1st July 2017, GST was introduced. A whole new revolution in the world of indirect taxation.
It was really ambiguous to live up to that situation with a whole new phase introduced in the
With all these changes earlier it was hard for the citizens to understand and cope up with
changes so wide. Despite all the efforts by the government it was a lot of mess but eventually things got better.
2018 – re-introduction of long term capital gains tax, mutual fund reclassification, ASM
list and PNB scam.
With entering in 2018, the Indian economy has really gotten better. Many changes came into
force at this time but initial changes have made people of India strong enough and boosted
them to grow better with the aim of financial stability.
Finance minister, Arun Jaitley, proposed to re-introduce long-term capital gains tax on gains
arising from the transfer of listed equity shares exceeding Rs 1 Lakh at 10 percent, without
allowing any indexation benefit.
Also, steps to get better investments were taken by SEBI by reclassification of mutual funds.
Additional survival measures were taken as well.
Also, this year PNB scam was discovered.
Further, such things have happened in following years –
2019 – corporate tax rate down to 22%, merger of 10 banks and PSU Insurance companies, push to start ups and cheaper home loans.
2020 – Covid-19 hitting India hard, ban on Chinese apps, Tata's again getting control of Air India, amazing export and manufacturing by India of vaccine, masks and other pharma requirements.
2021 – 1.5% GDP growth marking Rs. 147.35 trillion.