The Institute, named after the former President of India and eminent labour leader, late Shri V.V. Giri, was established in 1973 as an autonomous research institute on the initiative of some leading social scientists and eminent personalities. Late Professor V.B. Singh, a well-known labour economist, was the founder-director of the Institute. In 1977, Professor T.S. Papola joined the Institute as its first full-time Director and nourished the Institute in its formative years, developing it into a well-known center of research in the field of on development studies.

While the first Board of Governors was headed by late Shri D. P. Dhar, it also included several other eminent personalities and scholars such as, Naval H. Tata, Malcolm S. Adiseshiah, Baljit Singh, and Nagendra Singh as its members. Eminent scholars and distinguished bureaucrats with outstanding records have always been associated with the Institute to adorn its chairmanship and memberships of the Board of Governors. Shri P.N. Haksar, Prof. Yashpal, Dr. Nityanand, Professor Yogendra Singh, and Professor Y.K. Alagh are a a few among them.

Notably, in 1977, the institute was recognized as an institution of national importance status in the field of social science research based on the recommendations of a Visiting Committee constituted by the Indian Council of Social Science Research (ICSSR), and was accordingly brought under the scheme of regular financial assistance of the ICSSR, a prominent organization of the Ministry of Human Resource Development (now Ministry of Education), Government of India. Since then, the Institute has been regularly receiving financial support from the ICSSR, and the Government of Uttar Pradesh, through the Planning Department, on a matching basis. The Institute's research activities find significant place in the policy making of the Government of Uttar Pradesh.