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Indian History

Concise History of India

2500 BC The Dravidian civilization

1500 BC The Aryans invaded India and conquered the Dravidians

1400 BC The Vedas, the Hindu scripture, was written

800-600 BC The sacred scripture, the Upanishads, was written

518 BC Persians conquered Pakistan

500 BC Buddhism was founded in India by Siddhartha Gautama

500 BC Jainism was founded in India by Mahavira Jains

326 BC Alexander the Great and his Macedonian army moved into India

324 BC The Mauryan Empire was established by Chandragupta Maurya which included Afghanistan and parts of central Asia

272 BC Ashoka, the grandson of Chandragupta Maurya, became the emperor of India

185 BC The Maurya Empire ended

50 AD The Kushans established an empire in northern India

320 - The Gupta Indian dynasty reunited northern India initiating the "golden Age" of India

700s Muslim armies from Arabia invade India

1206 Qutb ub-din Aybak established the Delhi Sultanate

1398 Timur conquered India causing the decline of the Delhi Sultanate

1498 Vasco da Gama, of Portugal, became the first European explorer to reach India

1500 Christianity was introduced to India by the Europeans

Early 1500s Sikhism was founded by Nana

1526 Babur established the massive Mughal Empire

1600 Queen Elizabeth I, of the United Kingdom, granted a charter to the East India Company established trading posts in Bombay, Calcutta, and Madras

1628 Shah Jahan, the ruler of the Mughal Empire, built the Taj Mahal

1658 The Strict Muslim, Aurangzeb, ruled India and tried to force Hindus to convert to Islam

1757 The Battle of Plassey - Robert Clive, an agent of the East India Company, led forces which defeated the Mughal governor of Bengal

1774 Warren Hastings was appointed the first governor general of India by the East India Company

1857 The Sepoy Rebellion

1858 The British government ruled India through an Indian Viceroy- called the British Raj

1876 Queen Victoria was given the title Empress of India by the British Parliament

1885 Burma became an Indian province

1885 The Indian National Congress was formed

1905 The British government divided Bengal into separate Hindu and Muslim sections

1914 - 1918 First World War

13 April 1919 The Amritsar Massacre

1920 Mohandas K. Gandhi became the leader of the Indian independence movement and the Indian National Congress

1935 The Government of India Act created a new constitution

3 September 1939 The United Kingdom declared war on Germany beginning World War II

1940 Muhammad Ali Jinnah demanded that a new country be formed from India for the Muslims, which would be called Pakistan

1939 - 1945 WW11

August 1945 The United States dropped atomic bombs on Hiroshima and Nagasaki

1945 World War II ended

1946 The British government agreed to grant India independence if they could agree on a form of government

16 August 1946 Muslims held nation-wide demonstrations calling for the establishment of Pakistan

1947 British and Indian leaders agreed to divide the country into India and Pakistan

15 August 1947 India became independent

30 January 1948 Gandhi was assassinated

26 January 1950 A new Indian Constitution was ratified and Jawaharlal Nehru became the Indian first prime

1952: India's first general elections are comprehensively won by the Congress Party of India.
1962: Conflict between India and China over boundary disputes.
1965: Kashmir is again the cause of conflict between India and Pakistan before the UN intervenes.
1971: India and Pakistan go to war over the independence of Bangladesh.
1971: India signs a pact with the Soviet Union.
1974: India conducts its first nuclear test.
1984: The Gold Temple in Amritsar, being used as a refuge by Sikh separatists, is raided by the Indian army.
1984: Indira Gandhi, in her second spell as prime minister, is assassinated in New Delhi by her Sikh bodyguards.
1987: Indian troops are sent to Sri Lanka on a peacekeeping mission.
1990: The Indian army withdraws from Sri Lanka.
2001: More than 20,000 people are killed by an earthquake in the Indian province of Gujarat.
2002: War between India and Pakistan looms as Pakistan responds to India's testing of nuclear-capable missiles with tests of its own.
2003: India and Pakistan agree a ceasefire in Kashmir.
2004: The Asian tsunami kills thousands in coastal areas.
2006-2008: Terrorist attacks in various parts of India:
2006: A bomb in Mumbai kills 187 train passengers; police blame Islamic militants based in Pakistan.
2007: A train from New Delhi to Lahore in Pakistan is bombed, killing 68; many were Pakistanis.
2008: over 173 people died in a coordinated shooting and bombing terrorist attack

Globalising India

Globalising India

by Matthijs Nieuwenhuis 2005

Globalisation may not be a new concept, but for European politicians and business leaders, it may as well have been the buzzword of the year in 2005. It seemed every time managers and prime ministers announced another economic reform or downsizing, the reason they gave was "globalisation." Patrick de Vos, a Belgian social scientist, has just published a book about his travels in rapidly globalizing India, where many Western companies have outsourced production.

What is globalisation?
"It's like a steam engine, in which you have to maintain a difference in temperature, in order to maintain drive. The system rests on the possibility of generating profit through the exploitation of the socially weak".

This is what Patrick de Vos writes in his book India Unbound. It means that the essence of globalisation is the endless search for cheap labour. Businesses move production to countries like China and India, because they can hire cheap labour there. This keeps the price of a product low and increases profits. But there's more, says De Vos. There's also a social cultural exchange:

"Streams of people go to a specific place and take with them money, culture, and political and cultural ideas that change the place". So aside from its economic impact, globalisation also has a strong impact on a country's culture.

Businesses moving their activities to the Far East has given large sections of European society a negative image of globalisation. A common view is that "people in China and India are becoming increasingly wealthy at the expense of our jobs and standards of living". Many European jobs do indeed move along with the companies that build a factory in India, for instance.

"The city of Bangalore in southern India is a key hub in the world of computers and information technology and a textbook example of globalisation. All well-known technology or IT companies have descended on the place. Microsoft, IBM, Intel, Siemens, Motorola and Philips are only some of the close to 1400 technology companies that settled in Bangalore over the years.

Although two-thirds of these are Indian companies, two-thirds of total investments come from abroad."

The idea that globalisation only has negative effects on Europe needs rectifying. Setting up shop in India helps a company survive, for instance, and also saves jobs in Europe. Without cheap labour, groups like Philips would be driven from the market and all their jobs would be lost.
"[Philips] is a company with three headquarters, one in Eindhoven in the Netherlands, one in Bruges in Belgium and one in the Indian city of Bangalore. You could say that the partial move to India was negative for those who lost their jobs as a result of the new factory being built there. But if you look at the big picture, even they benefit from it. The move makes Philips stronger on a competitive world market and the company continues to exist. If it didn't, there would also be unemployment", says De Vos.


Drawbacks of globalisation
The mass arrival in India of companies and prosperity also has its negative side. People and the environment are suffering from the explosion of activity. De Vos writes in his book:

"In the twilight around us, there are scenes of crowded poverty and forever increasing want. We move slowly past a festering, overcrowded anthill of underfed and neglected people. In the damp air, the black smoke mingles with exhaust fumes and the penetrating smell of urine. The endless coughing bouts of our driver don't bode well. In a smog city like Bombay breathing can seriously damage your health."

Countries that once seemed out of reach are now increasingly easy to reach.

On the other hand, poverty is also increasing at a fast rate. This presents Europe with problems.

"The continuous flow of migration from poor to rich countries shows that the problem of large-scale poverty and exclusion is no longer someone else's problem. The globalisation of poverty is increasingly our problem."

Europe benefits from globalisation, but the flow of illegal immigrants in search of happiness and wealth is also part of it. This means it will remain an important topic in the coming years, which will see important cultural, economic and political changes. And one word will be heard again and again: globalisation.

India The Superpower

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India The Superpower
by Pieternel Gruppen 27-12-2006

India is rapidly emerging as a major economic force in the global arena. India is the world's largest democracy, it's the second most populous country in the world and has one of the fastest-growing economies. it's an increasingly dynamic member of the international community. Nevertheless, in spite of the big economic success alot of Indians still live in considerable poverty.

The centre of New Delhi brims over with energy. More and more international companies are opening their offices in the Indian capital to benefit from the economic growth which this year reached almost nine percent.

People
It's the people of India who are behind the economic progress, says Dutch businesswoman, Tina Uneken, corporate Director of Bhart Airtel, India's leading provider of telecommunications services.

"I have never seen before such consolidation, ambition and enthusiasm and such determination to make things happen. Over the last four or five years I have seen a change. As the world started to take note of India, people have become more confident and they have started to reflect on themselves and say: 'Hey, is this India, is this us and are we capable of doing this?'. That makes all the difference."

Growth
Economic growth started in 1991 when the government decided to liberalise the economy. The technological revolution in the late 1990s did the rest. But not everyone benefits. Street children, knocking on the windows of cars stuck in traffic, remind the CEOs and expats of Delhi of the country's poverty:

India now has as many as 26 billionaires but at the same time 300 million Indians survive on less than a dollar a day. Almost three million children die annually as a result of poor nutrition and easily preventable illness. The India of today is only shining for a few. Inequality exists between states in the south and the north, between urban and rural areas, between rich and poor.

Bad governance
Millions of people are lagging behind because of bad governance says Tarun Tejpal, editor in chief and publisher of Tehelka, a leading Indian newspaper:

"We are usually hampered by governance. How will government deliver? Government will deliver when civil society and media holds it to account. We placed too much faith in a kind of bureaucracy at a certain point in time."

"But the bureaucracy has not delivered at the level we thought it would. And we were not able to hold it to account."

Not only bad governance but also bad education are often singled out as hampering India's growth. The public education system is in a poor state with fewer than ten percent of children making it to tertiary education.

Struggling
According to Dutch businesswoman Tina Uneken, international companies are still struggling to get people who can perform the jobs. An equal chance for a good life for everyone, that is, according to education rights activist Shabnam Ramaswamy the only condition to becoming a real superpower:

"I will be really thrilled and proud if we are a superpower when we will have a more equal society with equal opportunities. At the moment I am ashamed and sick of the term superpower. If we have a more just world then we would be a superpower - not because of our military or technical power - then I will be a much prouder Indian."

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Indian Economy - Markets

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India on fire

Feb 1st 2007 The Economist

India's growth rate is close to China's; but signs of overheating suggest that this pace cannot be sustained

The economy is sizzling and foreign businessmen and investors are swarming to Bangalore and Mumbai to grab a piece of the action. India's year-on-year growth rate could well hit double figures at some point in 2007, and the country may even grow faster than China for at least one quarter. But things are so hot there is a big problem: India's current pace of expansion may not be sustainable.

On the face of it, the figures are compelling. India's real GDP grew by 9.2% in the year to last September (the latest numbers available). Over the past four years it has clocked up an average annual pace of more than 8%, compared with around 6% in the 1980s and 1990s—and a measly 3.5% during the three decades before 1980, when highly interventionist policies shackled the economy.

India seems to be reaping the rewards of reforms that were made in the early 1990s. These massively lowered barriers to trade and liberalised capital markets. As a result, total trade in goods and services has leapt to 45% of GDP, from 17% in 1990.

Economic growth is likely to remain strong this year, driven by booming investment and consumption. The government's five-year plan to 2011-12 has an ambitious target of 9% average annual growth. Most Indian economists expect at least 8% over the next five years. Some, such as Surjit Bhalla, of Oxus Investments, think even 10% is feasible, thanks to a surge in investment.

Optimism is abundant. Indian businessmen were the most upbeat among 32 countries surveyed recently by Grant Thornton, a London-based accounting firm: 97% of the respondents were bullish about the future. Indians are rightly proud of the huge global success of firms such as Infosys, or of Tata Steel's £5.8 billion ($11.3 billion) acquisition of Britain's Corus this week. They point to new mobile-phone subscriptions, which are running at a higher monthly rate than in China, as evidence of their economy's vigour and modernity. But look again. Perhaps the only thing really growing faster in India than China is hype.

Recent visitors to Delhi were greeted by a poster campaign by the Times of India announcing “India poised”. But poised for what? The economy is displaying alarming symptoms of overheating. This implies that demand is outpacing supply and hence the pace of growth is unsustainable. Despite lower oil prices, wholesale-price inflation has risen to 6%, which is above the 5.5% upper limit set by the Reserve Bank of India (RBI). India does not have a single rate of consumer-price inflation, but the crude average of the rates for industrial, non-manual and agricultural workers is above 7%. Capacity utilisation is higher than at any time in the past decade and severe skill shortages have caused wages to rocket.

The RBI is also concerned about a credit boom. Bank lending to firms and households has expanded by 30% over the past year. Lending on commercial property is up by 84% and home mortgages by 32%. Asset prices look bubbly. After rising more than fourfold over the past four years, India's stockmarket is one of the emerging world's most expensive, with a price-earnings ratio of more than 20. House prices in many big cities have more than doubled over the past two years.

Against this sweltering background, the RBI's interest-rate decision on January 31st looked timid. It raised its overnight lending rate by a quarter-point to 7.5%, but left the reverse repo rate (which it uses to drain excess liquidity from the banking system) unchanged at 6%. Over the past couple of years interest rates have risen by less than the rate of inflation, so they have fallen in real terms.

The inflation numbers probably understate the degree of overheating. When demand outpaces supply in an open economy it is more likely to show up in a current-account deficit than in inflation. India's deficit widened to more than 3% of GDP in the three months to September—a huge swing from a surplus of almost 4% in the first half of 2004. And the true gap between domestic demand and supply is even bigger. Yaga Venugopal Reddy, the RBI'S governor, recently drew attention to how India's current-account deficit is larger once you exclude the money sent home by Indians abroad. These remittances do not reflect domestic demand or supply, but are more like a capital inflow. Excluding workers' remittances, India's deficit is running close to 5% of GDP — larger than the equivalent deficit during India's balance-of-payments crisis in the early 1990s.

Keeping up with demand
The risk of a financial crisis is slight, because India has the cushion of $180 billion of foreign-exchange reserves, which is equivalent to 11 months' imports, and its external debt is small. But this misses the point. The reason for concern about India's widening current-account deficit is not that it heralds a financial crisis, but that it is a signal of how supply cannot keep pace with red-hot demand.

Furthermore, unlike China and most other Asian emerging economies, India is heavily dependent on short-term portfolio capital inflows, rather than foreign direct investment, which is longer-term. Short-term capital has accounted for four-fifths of capital inflows into India over the past three-and-a-half years—although, encouragingly, foreign direct investment did pick up strongly last year. This means India is vulnerable to rising interest rates if there is a sharp reversal in the appetite for risk in global financial markets.

How fast can India grow?
Most standard methods of estimating the trend—or potential—rate of growth (the maximum at which an economy can expand without triggering a rise in inflation) arrive at figures of around 7%. But business people, investors and an unusually large number of economists, are convinced that India is undergoing a “paradigm shift” and so backward-looking historical data are now irrelevant for assessing future growth.

India's capacity for growth has certainly increased over the past decade, thanks to earlier reforms. Yet given widespread signs that India is already exceeding its speed limit, there is a high risk that if the economy continues to grow at 9% or more, it will get ever hotter. Inflation will climb higher and financial imbalances will widen, running the risk of a hard landing. India has no genuinely independent central bank to put on the brakes. And policymakers are understandably reluctant to cool demand when India needs rapid growth to create jobs and reduce poverty.

An alternative to slowing demand is to boost supply by speeding up reforms and attacking the many bottlenecks caused by inadequate infrastructure, dreadful public services, skill shortages and rigid labour laws. But improving infrastructure and education not only takes time, it also requires money, and India's fiscal finances are far from healthy.

On the surface, the government has made great strides to cut its budget deficit. The IMF forecasts the deficit for central and state governments will fall to 6.2% of GDP in the fiscal year ending in March, slightly below budget and down from a peak of 10% in 2001-02. Some of the reduction is due to greater fiscal prudence and reduced tax evasion, but it also reflects a cyclical upswing in tax revenue on the back of the economic boom and low interest rates, thanks to the global liquidity glut. If interest rates rose because foreign investors lost their appetite for risk, or if the economy slowed, the budget deficit would widen.

It already looms dangerously large. Chetan Ahya, Morgan Stanley's economist in Mumbai, calculates that off-budget items, such as oil and power subsidies, amount to another 1.8% of GDP. This puts the total deficit closer to 8% of GDP, the biggest among the main emerging economies. India also has the highest ratio of public debt to GDP, at 80%.

The budget deficit could swell further over the next few years. Generous tax exemptions for exporters in special economic zones may erode future revenues. And the government's Sixth Pay Commission, due to report by April 2008, is likely to lead to a big rise in public-sector pay. Its predecessor's report marked the start of a sharp downturn in public finances; and the new recommendations will be implemented in 2009, an election year.

Again, the concern is not that India's public borrowing causes a financial crisis. Most of it is funded through domestic, not foreign, debt and controls on capital outflows ensure that domestic savers buy government bonds. The real problem is that India's weak fiscal position constrains its future growth by leaving no room for more public spending on infrastructure, education and health.

Leaving the farm
The growth optimists point to India's favourable demography. The population of working age will continue to rise for several decades, whereas in China it is expected to fall. This, it is argued, will boost India's workforce and both saving and investment. Furthermore, 60% of India's labour force is engaged in low productivity farming. As workers shift from agriculture to more productive jobs in industry and services, this will automatically boost GDP growth. Yet this assumes the newcomers will all find jobs. If those jobs do not appear, the so-called demographic dividend will more likely turn into a demographic disaster. Some 60% of the demographic bulge will come in five poor and badly governed states.

This is just one example of how economic commentators tend to confuse India's long-term potential (what is feasible provided the best policies are put in place) with its current potential (ie, non inflationary) growth rate. That India has huge long-term potential is undeniable, but without reforms the country cannot fully exploit it.

All agree that the biggest obstacle to growth of 9% or more is India's infrastructure—especially its lousy roads, ports and power. According to the World Bank, the average manufacturing firm loses 8% of sales each year from power cuts. India spends 4% of its GDP on infrastructure investment, compared with China's 9%. In absolute dollar terms, China spends seven times as much on its infrastructure.

India's government has ambitious plans to increase total infrastructure spending to 8% of GDP over the next five years. This will involve some increase in government spending, but the idea is for the bulk of it to be financed by public-private partnerships. That will be hard.

Private investors, especially foreign ones, still shy away from sectors like electricity and roads because they are uncertain of earning a reasonable return. Only about half of all electricity generated is paid for, because power is stolen and bills are left unpaid. Saumitra Chaudhuri, the economic adviser at ICRA, a credit-rating agency, argues that public-private partnerships first require regulatory reforms to protect the interests of both investors and consumers. As the World Bank put it in a report last year, “when systems are failing, it is not enough to fix the pipes, one needs to fix the institutions that fix the pipes.”

Another obstacle to growth in manufacturing is India's labour laws, which are among the most restrictive in the world. Firms employing more than 100 people cannot fire workers without government permission, which discourages expansion. Today's central government cannot scrap these laws because it relies on the support of the communist parties. In theory, the state governments can apply the laws more flexibly, especially in the special economic zones, but this is unlikely to lead to more flexible labour markets overnight.

A third big problem is the dreadful quality of public services, from education and health to the provision of water. Half of urban households lack drinking water within the home; one quarter have no access to a toilet, either public or private. Many public services in cities have worsened in recent years. In Bangalore water is now available for less than three hours a day, compared with 20 hours in the early 1980s. This may be another reason why workers are not moving in from rural areas as rapidly as in China.

Nor are young Indians equipped for more productive jobs in the towns. The quality of education and health care is dire. A survey in 2003 found that only half of paid teachers were actually teaching during school hours. Another survey found that government health centres in poor parts of Delhi had a more than 50% chance of prescribing a harmful therapy for common ailments.

Bizarrely, India has one of the most privatised health systems in the world. Government spending accounts for only 21% of total health spending. Likewise, in eight of 18 states studied more than half of all children in urban areas are in private schools. But this is not a model for free-market economics or the result of policy reform. People go private only because public services are so bad. Subir Gokarn, an economist at CRISIL, another credit-rating agency, worries that because the educated middle class do not use public services, there is less public outcry for reform than there should be.

Sadly, the prospects for dramatic change in the near future look slim. With a few exceptions, such as the partial opening of retailing to foreign investment and the privatisation of the two biggest airports, reforms have stalled since the government took office in 2004. Despite the reformist instincts of Manmohan Singh, the prime minister, the need to maintain the coalition overwhelms the appeal of reform.

Back to school
The supply-side constraints of infrastructure, labour laws and public services seem formidable, yet the vast majority of local economists in Delhi reckon that annual growth of at least 8% is sustainable even without further reform (with reform they look forward to 9% or more). A popular argument is that other Asian economies grew by 8-9% for long periods, so why not India? But East Asian economies invested much more in education and infrastructure than India does today.

A recent study from Goldman Sachs, which forecast that India could sustain 8% growth until 2020, was widely trumpeted in Indian newspapers. However, the bank's report clearly stated that this would require better education, labour market reforms and less red tape. Oddly, most newspapers failed to mention that.

Indeed, it is possible to detect a belief among some that it is now India's “right” to match China's growth rate of 10%. Even the finance minister, Palaniappan Chidambaram, has felt the need to remind people that present rates of growth are not “because some kind god smiled at us”. No country “deserves” rapid growth, unless it puts in place the right policies. The biggest danger of today's rampant economic optimism is that it could breed complacency about the need for reforms. That would be a sure recipe for a future slowdown.

India needs faster growth to create more jobs for its expanding population and to make it easier to relieve poverty. The awkward truth is that although the economy is sprinting ahead, most people are only crawling. Although the educated middle class has enjoyed big salary increases and a surge in the value of their homes and shares, the 60% of the population close to or below the poverty line have not yet seen a material gain.

Measured by the commonly used gini coefficient, India has less income inequality than China or America. But it has much more poverty. Some 260m people still live on the equivalent of less than $1 a day. Half of all children under five are malnourished. India needs rapid growth. But by itself that is not sufficient to end poverty, warns Rajiv Kumar, the director of ICRIER, an economic research institute. Better infrastructure and education are needed to make the rural poor more mobile so they have an escape route. In this way, better infrastructure and improved public services can not only increase growth, but also spread the rewards.

To boost sustainable growth, India needs to clear the path ahead rather than risk running an economy beyond its safe maximum speed. Indians are understandably eager for their economy to sprint like a tiger rather than amble along like an elephant. Yet few animals have an elephant's stamina or can travel as far in a day—provided its way is not blocked.

"You do not require an invitation to make profits." - Dhirubhai Ambani

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