Superior performance of Indian economy since the earliest times

India being an ancient nation with thousands of years of history and background, the necessary details of her economy since the earliest periods are not available. Moreover the quantitative yardsticks that are used now to measure the worth and performance of the economies of different countries are the creations of the last few decades. As a result we rely on the available details from different sources to understand the status and performance of the ancient Indian economy. But fortunately, the Gross Domestic Product (GDP) figures for different countries/ regions in the world are available for different periods at least from the beginning of the Common Era (CE), i.e. for the last 2010 years.
So first let us see the GDP figures for different countries/regions during 0 CE, as provided by the noted economic historian Angus Maddison to get an idea about the position of the Indian and other economies of the world. Table 1 below presents the details.
Table - 1: World GDP - 0 CE
( million 1990 international $)
0 CE
Total Western Europe
Eastern Europe
Former USSR
Total western Offshoots
Total Latin America
Other Asia
Total Asia (Excluding Japan)
Table 1 shows the total GDP of the world at that time was $102.5 billions. India’s GDP during that period was $33.75 billions and she was the largest contributor to the global GDP. China was following India with a GDP of $26.82 billions. Africa’s contribution was $7.01 billions, while that of Japan was $1.2 billions. The GDP figures are not available for the other countries individually, as most of them came into existence in their contemporary forms only in the later centuries.
Now let us look at Table 2 and see the shares of different countries/ regions in the GDP of the world during those times to know their relative performance.
Table-2: Share of Countries/ Regions in World GDP - 0 CE
0 CE
Total Western Europe
Easter Europe
Former USSR
Total Western Offshoots
Total Latin America
Other Asia
Total Asia (excluding Japan)
Table 2 clearly reveals the predominant position of India in the international economy during 0 CE. It shows that India’s share of world GDP was 32.9 percent, about 2010years ago. It means that India alone was contributing almost one third of the global GDP, while all the countries in the rest of the world were jointly contributing the remaining two thirds. China’s contribution during that period was 26.2 percent. While the other countries in Asia were contributing 16.1 percent, Japan’s share was 1.2 percent. The total contribution of Asia including Japan to the world GDP was an astonishing 76.3 percent. At the same time, the total Western Europe was contributing a share of 10.8 percent and Africa 6.8 percent. It is significant to note that India’s GDP was more than three times of the GDP of the total Western Europe. No other country or even geographical region was anywhere nearer to India, except China. Even when compared to China, India’s GDP was 25 percent more. To day when countries with much lesser share of contributions are called superpowers, how should we call India of 0 CE?
We have to understand that India could not have contributed one-third of global GDP without strong fundamentals and well-functioning economic systems developed over a period of many centuries. It means India must have had superior economic systems evolved over a long period of time during the periods before Common Era (BCE). Since we do not have the details of the economic performance for different years with the required figures during those periods, we have to look at different sources that are available with us to understand the status and performance of the economy during the earliest periods.
The renowned French archaeologist Jean Francois Jarrige who studied the Indus Valley sites since the 1960s noted: “ In terms of archaeological achievements, we are in the fringe of a revolution that will prove that the vegetation and domesticity of animals had existed in Indian subcontinent around 7000 BC, ……..” In this connection it is informative to note what Daya Krishna says: “Agriculture and animal husbandry began to be developed in India during the pre-Vedic times. Rig Veda has several references to hundreds and thousands of cows; …….; and to the use of wool for clothing.” It means that India must have developed agriculture, animal husbandry and stitching techniques even during those times.
Ancient India did not seem to have rested with the development of the basic sectors. She seemed to have engaged in trade from the earliest times. Kumar and Ram note that trade existed even before the Vedic periods. To quote: “Trade as an important form of economic activity appears to have existed from the Vedic or even protohistoric times in India……..” Indians seemed to have been engaged in voyages in the ocean even before the Vedic periods and as a result India remained in the forefront of ship building industry in the ancient days.
Evidences indicate that the ancient Indians understood the importance of wealth and its creation for the well being of families and the society. Rig Veda says:
“O God! Bestow on us the best treasures:
The efficient mind, and spiritual lustre,
The increase of wealth, the health of bodies,
The sweetness of speech and fairness of days.”
Creation of wealth for the betterment of lives has been emphasized continuously in scriptures, books and sayings in different parts of the country since the ancient times.
We can understand the importance given to the economy by ancient Indians when we come to know that the study of economics as a science started in India before the common era. Kautilya is credited with writing the first book on economics and politics in the world about 2300 years back. Here we have to know that Kautilya was not the originator of the subject. He himself had acknowledged that his work Arthashastra was based on earlier treatises. He had quoted the earlier authorities in more than one hundred places in his text. Hence Rangarajan notes: “The study of economics, the art of government and foreign policy is thus very old; the development of the science in India, according to some scholars, may have started around 650 B.C.”
Arthashastra notes that “the source of livelihood of men is wealth”. It advises the kings to take suitable measures to promote different economic activities including trade and continuously monitor them. Arthashastra deals with different subjects related to the economy and its management covering different areas such as agriculture, trade, treasury, sources of revenue, accounts and audit. It advises the king to run the economy with efficient administrative machinery. It gives the structure of administration of an ideal state which includes 34 chiefs dealing with different activities such as treasury, textiles, ports, trade, mines, metals and auditing.
The teachings of the texts/ learned scholars, practices and beliefs of people and the congenial atmosphere provided by the state must have made the citizens to constantly engage in diverse economic activities. As a result different activities must have been undertaken earnestly resulting in the overall development of the economy. The Greek ambassador Megasthanese who visited India during the period of Chandragupta Maurya noted that much of India’s cultivated land remained irrigated bearing two crops. To quote: “The greater part of cultivated land is under irrigation, and consequently bears two crops in a year.”
Evidences show that the activities related to the industrial, trade and services sectors were also going on successfully. When we see intellectual the contributions of Indians of the earliest periods, we can understand that people must have been constantly engaged in study and research in diverse fields related to life and beyond. It is relevant to remember here that the first university in the world was established in India about 2700 years back. We had great scholars making pioneering contributions in diverse fields. Intellectual activities of the highest order could not have take place without a strong economic base.
Based on the accounts of Magasthanese in India, the Roman historian Arrian notes that “ all Indians are free; no Indian at all is a slave.” A country could not have remained in such an exalted position without a strong economic base and equitable principles governing the economic systems.
Available evidences point out that the Indian economy remained very active and as a result she must have remained prosperous since the earliest periods. It is significant to note that India was in possession of almost one third of the global economic wealth even before the birth of the common era.
1. Angus Maddison, ‘ The World Economy- A Millennial Perspective’, Overseas Press (India) Private Limited, New Delhi, 2003
2. Daya Krishna, ‘Golden Age to Globalisation – 7000 years of Indian Economy’, Swadeshi Jagaran Prakashan, New Delhi, 2002
3. R.Kumar and S.Ram , ‘ Economic Ideas of the Hindus’, Crescent Publishing Corporation, New Delhi, 2008
4. L.N. Rangarajan, ‘Kautilya- The Arthasashtra’, Penguin Books, New Delhi, 1992
( Yuva Bharathi- Voice of Youth, Vivekananda Kendra, October 2010)

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