Indian Economy 1950-1990

Overview

This lecture is a summary of the main policies, reforms, and plans of the Indian economy from 1950 to 1990, focusing on farming, industry, foreign trade, and the functions of the Planning Commission.

Planning Commission and Five Year Plans

• The Planning Commission was established in India on March 15, 1950, with the objective of formulating economic development plans.
• The Chairman of the Planning Commission was always the Prime Minister.
• The idea of the Planning Commission was taken from the Soviet Union.
• A total of 12 Five Year Plans were made in India; the first plan was from 1951-56 and the last lasted until 2012-17.
• In 2015, the NITI Aayog was created, replacing the Planning Commission.

Main Objectives of the Five Year Plan

• Economic Growth: Increase in GDP, economic development of the country.
• Self Reliance: Reducing dependence on imports, increasing domestic production.
• Modernization: Adopting new technologies, bringing changes in social thinking.
• Equity: Reducing inequality between rich and poor, ensuring benefits for all.

Agricultural Policy and Reforms

• After independence, the agricultural sector was struggling with problems (zamindari system, low technology, lack of inputs).
• Two major reforms: Land Reform (abolishing zamindars, land ceiling, land consolidation), Green Revolution (new technology, HYV seeds).
• The Green Revolution started in India in the mid-1960s; M.S. Swaminathan is called the father of it in India.
• Benefits of the Green Revolution: increased production, buffer stocks created, relief for poor farmers.
• Drawbacks: increased income inequality, expensive seeds, subsidy debates.

Industrial Policy

• The 1956 industrial policy divided industries into three categories: some exclusively government, some government + private, and the rest private sector.
• Licenses were required for the private sector to set up industries.
• Tax exemptions and subsidies for backward areas and small scale industries.
• Promotion of small scale industries, but they faced difficulties in capital, technology, and marketing.

Foreign Trade Policy

• Emphasis on Import Substitution, producing goods domestically.
• Tariffs (taxes) and quotas (limits) were imposed on imports.
• These policies were called inward-looking policies.
• Objective: saving foreign exchange and developing domestic industries.

Key Terms & Definitions

• Planning Commission — the institution that formulated economic development plans for India.
• NITI Aayog — the current think tank, replacing the Planning Commission since 2015.
• GDP (Gross Domestic Product) — the total monetary value of goods and services produced in a country in one year.
• Land Reform — land-related reforms such as ending the zamindari system, land ceiling.
• Green Revolution — sudden increase in agricultural production through high-yield seeds.
• Tariff — tax imposed on imports and exports.
• Quota — maximum limit on imports.
• Import Substitution — increasing domestic production in place of foreign goods.

Action Items / Next Steps

• Download chapter notes from the Vishwas Batch app.
• Solve the questions given at the end of NCERT.
• Prepare for the next chapter—Economic Reforms—.