Indian economy 1950 -1990 | One shot | Chapter 2
Rajat Arora・44 minutes read
India's economic development from 1952 to 1990 focused on a mixed economy, with the Planning Commission emphasizing public sector reliance and protection of domestic industries through high import duties and import substitution measures. The achievements of economic planning in India include increasing national income, GDP growth, per capita income, savings, investments, and reduced unemployment rates, along with challenges like poverty, inflation, and inadequate infrastructure, with agricultural reforms such as the Green Revolution aiming to boost productivity and benefit low-income groups.
Insights
- India's economic planning, initiated in 1947 with the establishment of the Planning Commission, aimed at achieving self-sufficiency through protectionist measures like high import duties and import substitution, emphasizing the public sector for development.
- The period from 1950 to 1990 in India witnessed significant economic growth, with notable increases in GDP, per capita income, savings, and investments, accompanied by diversification and growth in various industries, leading to reduced unemployment rates, although challenges like persistent poverty, inflation, and inadequate infrastructure remained prevalent.
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Recent questions
What is the economic system in India?
Mixed economy
What is the role of the Planning Commission in India?
Make major economic decisions
How did India promote domestic production?
High import duties
What were the goals of the Green Revolution in India?
Boost food production
How did India categorize industries under the Industrial Policy Resolution?
Schedules A, B, and C
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Summary
00:00
Indian Economic Development: 1952-1990 Planning Achievements
- Chapter 2 of Indian Economic Development covers the period between 1952 and 1990, focusing on the three sectors: agriculture, industry, and foreign trade.
- The economic system refers to the arrangement solving central problems like what to produce, how much, and for whom, with two techniques: labor-intensive and capital-intensive.
- India adopted a mixed economy, combining features of both capitalist and socialist systems.
- Economic planning in India began in 1947, with the formation of the Planning Commission to make major economic decisions.
- The Planning Commission, established in 1950, emphasized heavy reliance on the public sector for development.
- The focus was on protecting small-scale industries, promoting savings and investment, and shielding domestic industries from foreign competition.
- Measures included high import duties, quantitative restrictions, and import substitution to boost domestic production.
- The aim was to achieve self-sufficiency, restrict foreign capital, and minimize foreign control over the domestic market.
- Achievements of planning included significant success in increasing national income and promoting economic development.
- The Planning Commission operated on five-year plans, with the first plan starting in 1951 and subsequent plans following until 1991.
14:17
Economic Growth and Challenges in 1819
- National income has increased to 6.8% by the 12th, falling short of the 8% target.
- In 1819, the estimated national income is expected to rise to 6.9%.
- GDP growth is evident, with a focus on increasing GDP.
- Per capita income has increased, reflecting growth in individual earnings.
- Per capita income is calculated by dividing the total income by the population.
- Savings and investments have seen growth, with a rise from 9.5% to 31.3% of national income.
- Diversification and growth are observed in various industries, leading to an increase in products and employment.
- Unemployment rates have decreased from 8.3% to 5.6%, showcasing some planning successes.
- Challenges include persistent poverty, inflation, unemployment, and inadequate infrastructure.
- The goals of the Planning Commission include GDP growth, equity, modernization, and self-reliance, focusing on development and technological advancement.
28:08
Agricultural advancements and reforms for increased productivity.
- Land can become fertile and produce more output through the use of insecticide pesticides to combat harmful insects that damage crops.
- Farm management practices have evolved with scientific techniques to improve crop productivity, especially in multi-cropping scenarios.
- Land reforms aimed to eliminate intermediaries and ensure farmers directly manage their land, with regulations on rent collection to promote equity.
- Consolidation of holdings involved bringing scattered lands together and imposing ceilings on land ownership to promote equality.
- General reforms included irrigation facilities, credit provision, regulated markets, and cooperative marketing societies to benefit farmers.
- The Green Revolution introduced high-yield variety seeds to boost food production and reduce dependency on monsoons, benefiting low-income groups.
- Chemical fertilizers replaced the need for fallowing land to maintain fertility, leading to a commercial outlook among farmers.
- Risks of the Green Revolution included pest attacks, water requirements, and increased inequality due to expensive hybrid seeds.
- Limitations of the Green Revolution were its focus on rice, selective impact in certain states, and benefits mostly for large farmers.
- Industrial development focused on import substitution through public sector involvement, leading to positive impacts on economic growth but also issues like corruption and inefficiency.
42:37
India's Industrial Policy Evolution: 1950-1990
- The government introduced a new Industrial Policy Resolution (IPR) in 1956, categorizing industries into three schedules: A, B, and C, with varying levels of government involvement.
- Industrial licenses were required for setting up, expanding, or diversifying industries, with concessions offered in Special Economic Zones to incentivize industrial growth.
- Small scale industries in India are defined by investments in fixed assets not exceeding Rs 1 crore, contributing significantly to production, exports, and employment.
- Foreign trade in India saw a decline in agricultural exports, a rise in manufactured goods exports, and a focus on import substitution to boost domestic production and save foreign exchange.
- The period from 1950 to 1990 saw industrial growth in India, with the government implementing measures like import quotas and tariffs to protect domestic industries and promote self-reliance.
