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.
Failure:
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.
