As human civilization evolved and developed a workable theory of the nation-state, economic thought gradually became more distinct from other subjects.

By virtue of being an old civilization, India has a long tradition of progressive ‘economic thinking' understood in a broad sense. Of course historically, Indian political economy is rooted in the social, cultural and political conditions of India (Parthasarathi, 2012).

Economic thinking in India is based fundamentally on the liberty and freedom of indi­viduals within the ambit of the family system, which is also placed within wider society. But unlike Western ‘standalone' individualistic culture, ‘family-based' individualistic culture is the bedrock of Indian socio-economic values (Mukherjee, 1916). Therefore the family house­hold is usually the basic unit considered in Indian economic thought, rather than the solitary individual.

The secular development of Indian economic thought can be classified into four phases:

(1) The ancient Indian phase that produced very diverse traditions of ‘economic thought' which are completely different to what is considered as economics today.

(2) The pre-independent phase from around 1850, when the nationalist school attempted to unite the different provincial forces and provided various platforms for discussions about then-prevailing Western economics and also indigenous Indian thought. This phase helped Indian thinkers to look again at their own traditions and to work on a new framework for a future India. This continued until the beginning of the twentieth century and was usually critical of classical economics, because the British government in India invariably used classical economics for policy-making and often underestimated the relevance of Indian economic thought.

(3) The independent India phase after 1947, when the scenario became completely different as far as economic thought was concerned, partly because of the influence of Marxism. At the same time, the emergence of powerful analytical currents like neoclassical and Keynesian economics had sidelined the indigenous ideas of Indian economists in the first half of the twentieth century. This third phase continued until 1991, when an economic crisis was triggered by excessive government/state control, which had believed for decades in the theories of Marxism and Keynesianism.

(4) A liberal economic phase that was thrust upon the country as a way out of the crisis after 1991. This helped the country to move out of crisis quickly and sustained India on a com­pletely different path, and created a new passion for free market economics amongst some. Now the debate amongst Indian economists is between three basic schools of thoughts: free market, Keynesian and Marxist.