Author: By Auric Mitra, Grade 10A

Over the last 30 years, India has grown to become an economic superpower. India’s most recent economic expansion has brought a record number of people out of poverty. A growing middle class has fuelled impressive consumer growth. It is today the world’s third largest market for smartphones and the sixth largest for cars. India’s software industry employs more than 14 million people. Some credits do have to go to some of India’s private sector too, which has helped build the power, India’s economy has today. Not only that, but these acquisitions have helped change the culture of corporate India, embedding international best practices in some of India’s top companies. For example: Tata Motors bought the Jaguar Land Rover car business from Ford Motors for $2.3 Billion.

In the 1970’s, India had a huge slump in the employment sector. Mainly, this was because, most of the services were owned by PSU’s. Then, there was the problem of the ‘License Raj’. The Licence Raj was an elaborate system of licences and regulation, for anything really. From buying groceries, to getting LPG, or even setting businesses.

Then came 1980. Indira Gandhi was elected for the second time. This time she really wanted to make some change to our economy. So first, to increase our employment from the slump, she put India on the world map, by hosting the Asian Games (or Asiad). While this happened, the colour TV was announced in India, and everyone had their eyes glued on to their TV sets. Private sector companies saw this as an opportunity to start advertising. So, the first colour advertisement in India was made, by a washing detergent known as ‘Nirma’. After that, in pursuit, other companies started to do the same and now it had become a trend. Following Nirma, ‘Bajaj’ and ‘Maruti’ also released colour advertisement, for their scooties and cars. With these advertisements, consumers started having ‘choices’, which increased the demand for these products. To meet up with the increasing demand, companies had to start employing more, which got India out of its employment slump.

In 1990, a new government, Manmohan Singh as India’s new Prime Minister. The first thing he did, was remove the unorganised Licence Raj. After this, things became much easier, simpler, and faster. Later, he connected a lot of PSU’s into Private Sector companies like BSNL and many more. This privatisation created much more employment, from what it was earlier. Afterwards, a new law was passed which allowed FDIs (Foreign Direct Investment). This is what really made India the superpower it is today. What this did is that it allowed dollars and other foreign currency to pour into our RBI, and this increased our economic strength.

The Informal Sector, is the part of the economy that is not taxed or monitored by any forms of government, i.e. they are unbanked or ‘Cash Economy’. The Formal Sector, is where wages and transactions happen through the bank. The informal sector in 1980-1990 used to be 80% of our economy. The advent of FDI’s, improved a lot of the private sector, and the informal sector reduced. According to a report “The higher the education level, the higher the chance to obtain formal employment”. Previously, Agriculture was in the informal sector, and had the highest level of employment. But over the years, employment in Agriculture has reduced and the employment in services has increased.

Indira Gandhi, was the first woman Indian Prime Minister. She became like a face or an inspiration for women to stand up and fight. She empowered a lot of women across the country. One example could be: Kiran Bedi, India’s first woman who joined Indian Police Service in 1972 as a highest ranking officer and is famous for her tough and innovative police strategies. Like Kiran Bedi, women were seeking jobs in the private sector too, like PepsiCo CEO, Indra Nooyi. In Urban India, women participate in the workforce in impressive numbers. For example, in the software industry, 30% of the workforce is female.

Post-Independence, in order to build the country, MahaRatnas were created, like Steel (SAIL), Gas (GAIL), Aerospace (Air India) and much more. Post-Liberalisation, the Indian private sector was faced with increasing domestic and foreign competition, including the threat of the cheaper Chinese imports. It has since handled the change, by squeezing costs, revamping management, and relying on cheap labour and new technology. However, this has also reduced employment generation, and even among smaller manufacturers who previously, relied on labour intensive processes. Therefore, PSUs play a key role in steering the national economy in the right direction.

In conclusion, we can see that India has grown quite significantly over the last 30 years and that there is a substantial amount of development that is going on. Programs like ‘Beti Padhao, Beti Bachao’ will help increase the percentage of women employment. As this development slowly increases with programs like ‘Make in India’, employment will also increase subsequently. Apps like ‘Paytm’ and Internet Banking become more prevalent, the informal sector will reduce, and the formal sector will increase. Finally, although PSUs play a key role in steering the national economy in the right direction, Private Sector organizations are the way for the future.