India presents interesting case for the study of economy since India's economic growth over the past two decades has been one of the world's fastest growing countries. India has managed to reduce poverty, inequality, disparity and sustained the significance growth of GDP, however, it is largest abode of world's poor and it is far behind its main competitors in East Asia, particularly China. Moreover, a gulf is growing between India's richer and poorer states. Acceleration development requires improving the delivering of public services and concerted efforts to sustain the growth as well as to augment the productivity, efficiency and effectiveness in production systems and marketing structure. India has been under foreign rule for the long period, and therefore, its administrators and political system is based on British model of development and governance, however, it has made progress in its various sectors of economy over the period. In this Research paper, a review of historical background of Indian Economy and Indian Economic development is given to understand the dynamics of Indian Economy.