Why India still a developing country?

           

     

India got its independence in 1947 and since then the country has been a "developing" country. If anybody was asked what could be the reason for this, pat comes answer that its because of "vested interests of politicians and corruption among law makers and bureaucrats" and this answer is 100% correct. But it would be interesting to analyze what triggered the corruption and how these so called law makers got an opportunity to sabotage country's economy for their vested interests.
I have covered this marginally in one of my previous articles (Read: 10 most corrupt politician in India ).

It would be shocking (especially for those who are relatively beginners to economics) to know that India's growth in per capita income (income per person in the country) was only 1% since Independence to late 1980's. Yes, that means the country was literally stagnant with nil development for almost 4 decades and entire credit goes to the great JL Nehru for his foolish economic policies.(Read: How corrupt are we?)

Now during those 4 decades entire industrial setup, banks, everything were under Govt control who gave away licenses only to powerful businessmen who could "lobby" and "convince" the government. These lobbyists controlled governments, bureaucrats, officers and there started an ugly liaison between businessmen (who could spend money), politicians (who could rule in favor of businessmen), officers, media, judiciary (who were paid by businessmen, controlled by politicians). This era also called as "license raj" restricted the entire country so much that everybody who had some money tried to influence policy makers and thus gave birth to the monster called corruption in India, which we are trying to fight today.

Till 1990, GDP (total worth of goods and services produced) and GNI (total income of the country) of India were among the last 20 out of 180 countries, thanks to 44 years of misrule, mayhem and destruction of economic fabric. So it would not be an exaggeration to say that we actually got real freedom in 1991. Now let us see what happened in 1991 which triggered this 360 degree effect on India and Indian economy.
Globalization & Liberalization:

Those who were born in early 80's could remember that till early 90's, the only cars we could see on the roads were Maruti, Ambassador and sometimes Padmini; BSNL was the only telecom provider, Air India and Indian Airlines were the only airways, Doordarshan was the only TV network; Soft drinks were completely Indianised (Gold Spot, ThumsUp, Limca, Maaza). It means nobody from other countries could invest their money or introduce their products and services in India. So Indian public were deprived of international goods, services, standards in all walks of life.

PV Narasimha Rao directed Manmohan Singh (then finance minister) to open Indian markets to foreign investors to benefit from Foreign Direct Investment (FDI) so that Indian treasury could be bolstered by foreign currency and Indian public could be given access to superior products of international market. Immediately we saw American, Japanese, Korean, European companies flooding India with their products in automobile, telecom, FMCG sectors etc. This was long awaited; the quality of life standards, GDP, GNI, per capita income - all started to increase dramatically and soon India fell in the top 10 economies of the world and is now the second or third fastest (not exactly sure about the ranking) growing economy in the world.

It is predicted that if this growth rate continues, India will overtake France, Germany, Canada, Australia, Japan, UK in another 15-20 years. Beating US and China would be difficult though (at-least immediately). So India can fall under "developed countries" in another couple of decades.

Imperialism:
India is still a developing country because of imperialism. India was imperialized by British in the late 1700’s and the early 1800’s till 1947 until it gained independence or communism. The British started expanding with the help of the “British East India Company”. The British expanded their rule over India. India at that time was one the richest countries in the world. They were rich because they had the most expensive diamond in the World, “Kohinoor Diamond”, at that time India had very less poverty and little corruption as well. The British took the “Kohinoor Diamond”, and have it now in a museum in United Kingdom. The United Kingdom is developed because of our (Indian’s) diamond and not because of their own efforts. After the British rulers were force to leave India in the year 1947, India became a country among countries with the highest poverty and corruption. India was considered well developed before the British expanded their rule. However from 1947, till today it is considered developing. Also, the British leaders led to a separation of a major sector of India, Pakistan. India and Pakistan were separated because of the British. The British not only separated India and Pakistan, it separated many parts of India from India. A good example of this is Jammu and Kashmir. Till today India and Pakistan are in a state of a cold war to decide that which part does Jammu and Kashmir belong to. The people from Jammu and Kashmir are tired of the war between India and Pakistan and want to be known as an independent country. The British separated thousands of Indians from each other. The British broke India from one large country to a large number of small countries.