Major Milestones That Shaped Indian Economy Post Independence

Licence Raj

The Licence Raj was a result of India's decision to have a planned economy where all aspects of the economy are controlled by the state and licences are given to a select few. Jawaharlal Nehru is considered as the architect of the system of Licence Raj or the Permit Raj. The era refers to the elaborate licences, regulations and accompanying red tape that were required to set up and run businesses in India between 1947 and 1990.

Though initially the system showed good results but lately there were low growth rates, closure to trade and investment, a licence-obsessed, restrictive state and inability to sustain social expenditures.

The Licence Raj system was in place for four decades. The government of India initiated a liberalization policy under P.V.Narasimha Rao. Rao also had the responsibility of industries minister; he is directly responsible for dismantling the Licence Raj. Liberalization resulted in substantial growth in the Indian economy, which continues today.

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