Well, we have already studied in our history books about the Indus Valley Civilization, the civilization, which stood as one of the earliest landmark of Humans in Indian-subcontinent.
It seems that the direction of development in present economic scenario is moving towards the same way, without taking the note of the reasons of he crash of Indus Valley Civilization .
What are the similarities between present Indian trade & that during Indus Valley Civilization?
Unilateral International Trade:
In present Scenario, the International trade is covered by the trade with US. In Indus valley Civilization, the International trade meant that with Mesopotamia.
Weak Domestic Trade:
The domestic business Set-ups are not contributing to the national economy as a major contributor. Only a meager percentage of less than 10% of the total population, are engaged into self owned business.
Even that too is not supporting the existence/establishment of some more business activities, with agriculture, the major contributor of yesteryears, being ignored.
Same was the case during the Indus Valley Civilization.
The Indus Valley Civilization failed due to these problems only.Had it worked for the Gandhian concept of self-sufficient economy, the situation would have been entirely different.
Steps taken by Govt. over the years: There are several Govt. Institutions like NSIC, SSI, etc to develop the small & medium scale Industries, but even these seems to be backtracked.
Steps to avoid the happening of such scene again:
Diversify the foreign trade, make it multi-lateral : This will lessen the shock, if it happens.
Promote more home Industries to be MNCs:This will bring more liquidity to the system.
Promote the small & medium scale enterprises: It will work as a back up during heydays.
Focusing on Agri-based businesses & their promotion: This will cater to the demand which have been suppressed by the Govt over the years.And adding to it, major part of population is adept at such businesses.
Work for a Gandhian Economy, Economy which is self sufficient: Practically, it will sound impossible in the beginning, but if the major contributors to the economy become the Indian investors, over the years, it will minimize the harsh effect of FII & FDIs. In case of sell out also, the liquidity will remain with the system, rather than going to some other economy.
Here, Indian Economy has only got a short term shock. If it takes it into notice & work for a multi lateral trade with participation of more & more countries, the impact would be less on the economy, in case there is some shock a one/two economies.
Also, to combat with such situations, India will have to have a very strong domestic set up of industries.