Economic Reforms

ECONOMICS ASSIGNMENT

SCMS - Cochin

Submitted by: Vivek.S

QUESTION

“India & China were the largest economies in the world up to the 18th /19th Centuries”. Substantiate this statement. What were the major causes of the decline faced by both countries till the latter half of the 20th Century?

India and China, the two big economies of Asia ,& now the most promising economies of the world came through a long period of transition. In the earlier periods india and china were the most affluence and innovative economies, at a time when the now prominent Europe was inhabited by a group of uncultured cave men.

The wealth of india and china was so immense that traders from every part of the world came to them in large numbers. The natural factors was responsible for such a situation and the ruling class also contributed.According to the prominent economist & politician,

Subramanian Swamy, “ Even as late 1750‟s, the prevailing standards,

China and India were the most developed countries in the world. India had 28.9% of the world GDP during 1000 A.D. China had 22.7%. In 1500 A.D, India had 28.4% and China had 25% of the world GDP at tha time. In 1913, India had only 7.6% and China had 8.7% GDP. In

1950, India had only 4% and China had 4% of the world GDP. “ This clearly tells about the affluence of Indian and Chinese economies in the 18th century and its decline in the 20th century.

INDIA

In the beginning of the eighteenth century, the basic unit of the Indian economy was the self-sufficient village economy. The income of the government came from the land revenues levied on each land granted. The village communities and the percentage of the land revenues remained unchanged with the change of the rulers and the dynasties. The large scale of the domestic and the foreign trade brought into existence the merchant capitalist. The banking system also became active with the growth of extensive trade. The growth of the trade gave

rise to the...