Indian Economic Development: 1950-1990

Introduction

• Chapter covers Indian economy between 1950 to 1990.
• Discusses development in agriculture, industry, and foreign trade during this period.
• Focus on the economic systems, planning, and reforms.

Economic System

• Central economic problems: What to produce, how to produce, for whom to produce.
• Different types of economic systems:
  • Capitalist economy: Major role by private sector.
  • Socialist economy: Major role by government.
  • Mixed economy: Both government and private sector play roles.
• India adopted mixed economic system post-independence.

Economic Planning

• Planning body formed: Planning Commission in 1950.
• Defined as making major economic decisions by a central authority.
• Industrial Policy Resolution (1948) and Directive Principles of Indian Constitution guided planning.

Features of Economic Planning (1950-1990)

• Heavy reliance on public sector.
• Protection of small-scale industries.
• Focus on saving and investment.
• Protection from foreign competition.
• Import substitution: Domestic production over imports.
• Restrictions on foreign capital.

Achievements of Planning

• National income and per capita income increased.
• Growth in savings and investments.
• Industrial diversification and employment generation.

Failures of Planning

• Persistent poverty and inflation.
• Unemployment issues.
• Inadequate infrastructure.

Goals of Five-Year Plans

• Growth: Increase in GDP.
• Equity: Equal development across society.
• Modernization: Adoption of new technology and social outlook.
• Self-reliance: Reducing dependency on imports.

Agricultural Sector (1950-1990)

• Importance: Major contributor to GDP, employment, raw materials, and exports.
• Problems: Low productivity, disguised unemployment, dependence on rainfall, subsistence agriculture, outdated technology, and landlord-tenant conflicts.

Agricultural Reforms

• Technical Reforms:
  • High-yield variety seeds, chemical fertilizers, pesticides, scientific farming practices.
• Land Reforms:
  • Abolition of intermediaries, rent regulation, consolidation of holdings, land ceiling.
• General Reforms:
  • Improved irrigation, provision of credit, regulated markets, cooperative marketing societies, price support policies.

Green Revolution

• Introduction of high-yielding variety seeds in mid-1960s.
• Positive impacts: Increased food production, self-sufficiency, reduced food prices, changed farmer outlook.
• Risks and limitations: Pest attacks, inequality, health issues, limited to certain crops and regions.

Industrial Sector

• Importance: Essential for economic growth and employment.
• Industrial Policy Resolution (1956): Public sector as the leading role, industrial licensing, concessions for private sector.
• Role of public sector: Addressing capital shortage, promoting social welfare.
• Positive impacts: Economic growth, industrial output increase, small-scale industry growth.
• Negative impacts: Corruption, inefficiency, licensing issues, public monopolies.

Foreign Trade

• Decline in agricultural exports due to domestic demand.
• Increase in manufactured goods exports.
• Import substitution policy: Replacing imports with domestic production.
• Protection measures: High import duties, quantitative restrictions.
• Mixed impacts: Industrial growth but inefficiencies.

Conclusion

• Overall, planning between 1950-1990 brought mixed results with significant achievements in growth and industrialization, but persistent challenges in poverty, unemployment, and infrastructure.

Refer to each section for detailed explanations and impacts, ensuring a comprehensive understanding of India's economic development during this period.