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.
“Englishmen.. have given the people of India the greatest human blessing - peace.” (Dutt). Merely coming to India in the 1600s to trade, the British East India Company established trading outposts. After ridding of French influence in India during the Seven Years’ War and having Indians mutiny against British rule, Britain gained full control of India. India has been under the imperialist control of the British until their independence in 1947. British imperialism caused some negative effects on India through poverty and persecution, but retained more of a positive impact due to its massive improvements in the modernization of India and the overall improvement of Indian civilization.
The International Monetary Fund’s “main goal is to ensure the stability of the international monetary and financial system. It helps resolve crises, and works with its member countries to promote growth and alleviate poverty” (Imforg, 2016). My research seems to point to the main failure of the IMF policies as pointing to the same issues faced by any bank – math vs. people. While its goals may be to help alleviate poverty, those same policies are what causes the patient to become sicker or possibly die from the cure. Economists attempt to apply the rigidity, demanding constraints, and unforgiving answers of mathematics to human nature.
Catherine Caufield provided the flamboyant details of the projects that were sponsored by the World Bank to help the poor people but in reality they made rich people richer. The World Bank is only largest moneylender to the third world of poor countries. World Bank has great influence on the third world countries. It not only provides fund to them but also draft the projects sponsored by it.It determines the outlines, objectives, designs and outlook the all proposed projects. The government of those countries is also influenced by World Bank decisions. In other senses we can say that those countries became the puppet in hands of the bank. In order to keep itself at top position, it spends a large sum on promoting its philosophy of development by organising conferences, symposiums and
India after the growth of over 9% during 2005-08, moderated to growth of 6.7% in 2008-09 because of the global financial crisis due to the fiscal and monetary space, but with time the economy recovered to growth of 8.4% in 2009-10 and 2010-11.
The International Development Association (IDA) have as member to 166 countries. It was created in 1960, the members of this association made contributions that allow the World Bank (WB) provide around 6,000 and 7,000 million dollars annually in credit, with a very low interest, to those 78 countries that are considered the poorest. The international development association is very important for those countries, called "developing", who cannot get financing at market circumstance. This give money for the development of services such as education, housing, water, sanitation, and making investments and reforms to promote productivity and increasing employment. (Learn Economics)
Subramanian, Arvind. India’s Economy is stumbling? The New York Times. August 31, 2013: A19. Print.
Although only recognized as an independent country since August 1947, India has been widely known throughout history. Starting as early as the 27th century BCE with the birth of one of the world’s first highly sophisticated civilization, namely the Indus Valley Civilization, India has been recognized for its rich historical and cultural heritage. While it was only a lot later in its history, specifically during the rule of king Ashoka in the 5th century that the country started to unify; it was during the during the two hundred years of British colonization when this big mass of area in South Asia accepted a unified national flag and became the country that it is today. A country that is home to over 1.2 billion people. A country where its long history has left different layers of deposit that have neither totally merged nor ceased to influence the Indian people. India is one of the world’s most complex societies in which “centuries coexist”, however, this greatness in diversity and culture also seems to hinder development in this country. India has thus been labeled a “third world”, but before we go any further let us try and find out what that means. What is a third world country and how does a country like India fit the image? By 1921, about 84 percent of the world had been colonized since the sixteen century with approximately 168 colonies. During past two centuries the world has seen an increasing number of new nations being born due to the process of decolonization. As the numbers were increasing, especially after 1945, political theorists sought to find a term to categorize these new nations that were considered qualitatively different from older countries of Europe and Northern America and thus termed them as “Third World...
The IMF was not designed to be an aid agency but its role in economic
India is the second fastest growing major economy in the world. Indian economy is diverse and encompasses agriculture, handicrafts, manufacturing, textile and a multitude of services. India adopted socialist inspired approach for most of its independent history with the strict
With a GDP of $1.842 trillion in 2012, India is one of the fastest growing economies (The World Bank Group). Another determinant of a country’s competiveness level is its exchange rate; the Indian Rupee decreased to 60.92 this March from 62.10 in February 2014 per USD. The Indian Rupee averaged 32.51 since 1973, with a maximum rea...
The legal environment of Indian country is favorable for investment. The government has offered many benefits to investors. GDP growth of India is 7.4 percent and it is higher in the world and similar to the growth of china GDP growth (Dhamsana, 2016). The per capita income is 74,930 and the big economy consisting 1.7 trillion.
The domestic businesses as well as international businesses face cut throat competition to enter and survive in the Indian market. They can survive only through customer satisfaction and providing high quality products. The increased foreign direct investment in India has supplemented the domestic capital formation and has improved the balance of payment. Banking, Insurance, communication, transportation, telecommunication, tourism, healthcare, education, consultancy, BPO and other service sectors contribute more than half of the national income in India. As a member of WTO India will reduce the tariff and non-tariff barriers and reduce and repay the foreign debt. Indian business environment is committed to the Indian economy through promoting increased living standards of the people in India. The world economy witnessed recession in the year 2008-09. The stability of the banks and financial institutions was questioned. India’s export sector, inflow of foreign investment, employment opportunities, capital markets, domestic demand of capital and consumer goods were affected due to economic slowdown. But the Indian private and public houses have struggled a lot to bring the Indian economy in the better position again. It is a fact that the Indian business environment is in much better position now and the Indian economy is growing at pace now.
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.
Export- oriented growth model will improve India’s Balance of Payment and help in accumulating foreign exchange reserves (which is very important given the