1975 to now: The India story

The country had started to turn the corner around the time Business Standard was born. Attention to under-addressed areas can now put it on course to becoming a truly high-growth, 'high-development' economy

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It may not have seemed so at the time, or at least not in the way it might be understood today, but 50 years ago India reached a turning point. At the time, there was an economic crisis and political turmoil, with the decisive action being the imposition in 1975 of Emergency rule by Indira Gandhi. But that was overturned in less than two years. What proved more long-lasting was the new direction in economic policy, barely noticed at the time, and following that, an end to India's long-term underperformance as an economy.

Until then, the country had been a global byword for poverty, dependent on food aid. It had been an economic underperformer, growing more slowly than the world economy. The transition began in and after the second half of the 1970s, following some 15 years of crises in the form of three wars, failed harvests and even famine, a traumatic rupee devaluation and two oil shocks, apart from political instability and a Constitutional crisis.

These had led to a loss of national selfbelief after the early optimism under Jawaharlal Nehru.

Then the country's performance slowly stabilised. Ahead lay a half century of steady economic outperformance, with growth outpacing both low-income and middle-income countries, as well as the world economy. The country, therefore, has an international heft today that it did not enjoy before. Yet, it has not been a "shining" record because of continuing poor socio-economic metrics and rising inequality.

Prior to 1975, and even for some years after that, India's share of the global economy had been consistently on the decline. From 2.7 per cent in 1960, the number had fallen to 1.9 per cent in 1975 before the decline slowed, then stabilised and eventually improved.