Summary: Indian Economy 1950-1990 - Commerce PDF Download

The chapter explores the transformation of the Indian economy from 1950 to 1990, a period marked by significant policy shifts and economic reforms. This era encompasses the transition from a predominantly agrarian economy to a more diversified industrial and service-oriented structure, influenced by various domestic and global factors.

Economic Policies and Planning

The initial phase post-independence focused on establishing a planned economy, with the introduction of the Five-Year Plans. Key features included:

• First Five-Year Plan (1951-1956): Emphasis on agriculture and rural development.
• Second Five-Year Plan (1956-1961): Industrialization through state-led initiatives.
• Subsequent Plans: Shifts towards mixed economy and liberalization in later years.

Major Economic Challenges

Throughout this period, India faced several challenges:

• Food Security: Issues of famine and food production led to the Green Revolution.
• Balance of Payments: Persistent deficits necessitating foreign aid and loans.
• Inflation: Economic instability with fluctuations affecting growth.

Impact of Liberalization (1991 Onwards)

The liberalization in 1991 marked a pivotal shift, moving towards a market-oriented economy. This included:

• Reduction of trade barriers and tariffs.
• Encouragement of foreign direct investment (FDI).
• Privatization of state-owned enterprises.

The period from 1950 to 1990 laid the foundation for India’s current economic framework, setting the stage for growth and development in the subsequent decades. The blend of planned economic strategies and subsequent liberalization reflects India's unique approach to economic management, balancing state intervention with market dynamics.