Indian Economy (1950-1990)

• Introduction & Context

  • State of economy at independence (stagnant, backward)
  • Need for planning and government intervention
  • Establishment of Planning Commission (1950)
  • Role of Mahalanobis in Second Five Year Plan

• Economic Systems & Goals of Planning

  • Types of Economic Systems
    • Capitalist Economy (Market forces)
    • Socialist Economy (Social welfare/State control)
    • Mixed Economy (Chosen by India: Public + Private)
  • Five Year Plans in India
    • Five Year Plans concept (Duration, Goals)
    • Common Goals: Growth, Modernization, Self-reliance, Equity

• Agriculture (1950-1990)

  • Need for Reform
    • Low productivity, stagnant sector
    • Exploitative land tenure system
  • Land Reforms
    • Abolition of intermediaries
    • Land ceiling policy
    • Consolidation of land holdings
  • The Green Revolution
    • Introduction of HYV seeds
    • Use of chemical fertilizers, pesticides, and irrigation
    • Phase I (Mid-60s to Mid-70s): Wheat-growing regions
    • Phase II (Mid-70s to Mid-80s): Spread to other states/crops
    • Subsidies debate (Benefits vs. Cost to government)
    • Marketable surplus impact

• Industry and Trade (1950-1990)

  • Role of Public Sector & Industrial Policy
    • Industrial Policy Resolution (IPR) 1956
    • Three classifications: Schedule A (State), Schedule B (Mixed), Schedule C (Private)
    • Dominance of Public Sector Undertakings (PSUs)
  • Regulation of Private Sector
    • Industrial Licensing (Permit License Raj)
    • MRTP Act (Monopolies and Restrictive Trade Practices)
  • Small Scale Industries (SSIs)
    • Karve Committee (1955) definition and role
    • Labor-intensive nature
    • Reservation of products exclusively for SSIs
  • Trade Policy: Import Substitution
    • Inward-looking trade strategy
    • Protection from foreign competition
    • Tariffs and quotas

• Evaluation of Policies (1950-1990)

  • Achievements
    • Increase in agricultural production (food grain self-sufficiency)
    • Industrial diversification (electronics, engineering)
    • Growth in GDP and infrastructure
  • Failures & Drawbacks
    • Inefficiencies in public sector enterprises
    • Misuse of industrial licensing (red tape, corruption)
    • Lack of competition leading to poor quality
    • Fiscal burden of subsidies
  • Conclusion / Prelude to 1991 Economic Reforms