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New India

Indian independence from British rule in 1947 raised hopes of rebuilding the economy and society. The economy was in ruins after 250 years of colonial rule with low productivity in agriculture and industry leading to widespread poverty, disease and ignorance. The major challenges after independence were creating a strong economic foundation to improve living standards on a sustained basis and nation building to transform a diverse, divided society into a modern democracy. The document discusses India's economic development after independence from 1947 to 2010, covering the initial period of state-led industrialization and later shift to market-focused economic liberalization.

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Shambhavi Rai
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47 views1 page

New India

Indian independence from British rule in 1947 raised hopes of rebuilding the economy and society. The economy was in ruins after 250 years of colonial rule with low productivity in agriculture and industry leading to widespread poverty, disease and ignorance. The major challenges after independence were creating a strong economic foundation to improve living standards on a sustained basis and nation building to transform a diverse, divided society into a modern democracy. The document discusses India's economic development after independence from 1947 to 2010, covering the initial period of state-led industrialization and later shift to market-focused economic liberalization.

Uploaded by

Shambhavi Rai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Indian independence from British rule in 1947 raised hopes of a new India.

Two and a half centuries


of colonial experience (from c.1700 to 1947) left our economy in ruins. Both agriculture and industry
were characterised by extremely low levels of productivity. This implied mass poverty, widespread
disease and ignorance. Any hope of improving the general standard of living on a sustained basis
rested on the creation of a firm economic foundation. This was the major challenge before India
after independence. There was a second challenge as well. This related to nation-building in the vast
sub-continent. A diverse society deeply divided by language, geography, caste, religion and feudal
power structures was to be transformed into a modern democracy based on universal suffrage and
commitment to a national constitution. Implementation and Monitoring of Economic Policies 30 Any
programme of economic reconstruction could not rely exclusively on private enterprise (or market
economy) and required an active role of the state (or, roughly speaking, the public sector). In fact,
the development of private enterprise itself depended heavily on the basic economic foundation to
be created by the state. The programme of economic reconstruction therefore had to be executed in
the context of a ‘mixed’ economy with clearly demarcated areas for the market and the state.
Moreover, such an economic leadership of the state was to operate within the political framework
of democracy. This was undoubtedly a great social experiment with no parallel in history. It was
eagerly awaited by the world divided into two major power blocks led by the United States of
America and Soviet Russia. This unit traces the course of economic development in independent
India, its nature and constraints, and its success and failure. We approach the issue through the
framework of political economy. This framework takes a broader view of the economy, whereas the
conventional framework considers the economy primarily as a network of markets. To begin with,
we shall explain the concept of political economy and development. We shall then survey the state
of Indian economy at the time of independence and the thinking about economic development at
that time. Our study period of roughly six decades (1950-2010) falls into two subperiods. The latter
correspond to major regimes of economic policy. The first subperiod of roughly four decades (1950-
1990) relates to an ambitious programme of industrialisation with the Indian state playing a lead
role. The second sub-period of two decades since 1991 saw a major shift in political and intellectual
environment in favour of the market in achieving economic growth and efficiency. This we shall
cover under the policy regime of economic liberalisation

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