Indian Economy Growth Development Post Independence

Indian Economy Growth Development Post Independence is a special summary of economic conditions and development in independent India, post 1947. It is an attempt to give this all-important subject a more intellectual shape.

After independence, the Indian economy had numerous problems. First, it was plagued by the scarcity of inputs of agricultural products and subsequently even the prices of the same. During the 1970s, agricultural produce in India became unprofitable and production declined, leading to an increase in the food deficit. 

In addition, employment opportunities declined as technological innovations diminished the need for unskilled labor. Even with the revival of the Indian economy, farmers struggled to earn sufficient income to maintain their farms.

For the past six decades, the Indian economy has been showing an impressive growth pattern. From a lowly 3.9 percent in 1948 to 14.8 percent in 1964, it showed rapid growth of 5.4 percent, 6.7 percent, 9.5 percent, 9.3 percent, 11.3 percent, 13.4 percent, 18.2 percent, and 14.6 percent, respectively, from 1970 to 1993.

It has been consistently falling since 1993. In the period between 1997-2005, the Indian economy grew only 5.9 percent. From 2006-2010, India was again able to show 5.8 percent growth. From 2010-2015, the economy did not grow even 5 percent. It did, however, grow 4.6 percent in 2016 and 4.7 percent in 2017, after which it showed a small increase of 1.7 percent in 2018.

And since then, private investment has gradually been growing, and in the present period, it is now 17.4 percent of GDP, whereas public investment has risen to 37.6 percent. It has reached an unprecedented level of 55.3 percent in 2008 and 59.1 percent in 2007. Since then, it has dropped steadily, reaching 48.6 percent in 2016.

Similarly, the Indian economy has shown steady growth with relatively small fluctuations, both in the long and short term. The Indian economy has grown from $ 1.5 billion in 1950 to $ 404 billion in 2003, which is a historic growth of an unprecedented 131 percent.

Post-1995, this growth has gradually been falling steadily. The Indian economy has grown only 22.7 percent between 2000 and 2015. But this is not the first time when India has reached this level of growth. In 1947, the Indian economy had reached a historic growth of 93 percent.

Economic Development Post-1950: Post-1955, both economic growth rates, and fluctuations have been extremely small. At the beginning of this period, the growth rate was increasing in both long-term and short term, but then the long term rates dropped to 4.3 percent in 1965, 4.2 percent in 1966, 4.1 percent in 1969, 4.6 percent in 1970, 4.4 percent in 1975, 4.5 percent in 1979, 5.2 percent in 1980, 5.2 percent in 1985, 5.8 percent in 1990, 5.2 percent in 1995, 4.6 percent in 1996, 5.8 percent in 1998, 6.4 percent in 1999, 5.6 percent in 2000 and 5.9 percent in 2003.

Similarly, the fluctuations have been small, even though the fluctuations have varied considerably. Between 1955 and 1961, there was an overall increase of 2.7 percent, and between 1960 and 1965, there was an overall increase of 4.3 percent. Similarly, from 1965 to 1967 there was a decrease of 1.9 percent, from 1968 to 1973 there was an increase of 3.5 percent, and from 1973 to 1979 there was an increase of 5.1 percent.

But then between 1980 and 1981, there was a decrease of 3.5 percent. Between 1981 and 1990, there was an overall decrease of 1.5 percent, and in the period between 1990 and 1995, there was a decrease of 0.9 percent. Between 1995 and 2000, there was an overall increase of 2.8 percent. In 2001, there was an overall increase of 1.9 percent, from 2003 to 2005, there was an overall increase of 2.8 percent, and since 2005, there has been a decline of 1.6 percent.

All these changes took place with relatively small fluctuation. The reason for this drop in economic growth after 2005 is a decline in investments. The average investment in the period 2004-2015 was 23.9 percent of GDP, while in 2005 it was 25.7 percent of GDP. This is an almost 50 percent drop.

 

Economic Development Post-1955: In 1955, India's economic growth rate was 5.8 percent. This was higher than the countries that have been surpassed by India in economic growth. But after 1955, the growth rates gradually declined and reached a low of 4.5 percent in 2012. So, the growth rates of the post-1955 period were not as high as the growth rates during the period between 1955 and 2005.

Meanwhile, the economic growth rate during the post-1945 period was higher than that of the post-1955 period. The economic growth rate in 1950-1955 was 7.3 percent, while it increased to 8.4 percent in 1960-1965. But from 1965 to 1965, there was an overall decline in economic growth, from 7.4 percent to 4.4 percent.

Thus, during the post-1945 period, the growth rates were around 7.3 percent, whereas post-1955, there was a decline to 4.4 percent.

This decline in economic growth in post-1955 is significant because it is at this time that economic development began to fall, which continued until around 1990. From 1990 to 2005, the economic growth rate was about 5.3 percent. From 2005 to 2008, the economic growth rate increased slightly to 5.8 percent.

The Impact of the Slowdown on the Indian Economy: This decrease in investment can be seen in the official figures. In 2011, the Indian economy had a growth rate of 7.9 percent. But in 2012, the growth rate was only 4.5 percent, while in 2013, it was only 4.5 percent. In 2014, it was 5.8 percent, and in 2015, it was only 5 percent. In 2016, it was 5.3 percent, and in 2017, it dropped further to only 5.2 percent.

This decline in economic growth rates of post-2005 has not only affected the overall growth rates. It has also affected the growth rates of various sectors. While the growth rate in agriculture has remained at about 4.5 percent, which is close to the historical average, in industrial production, the growth rates have been declining steadily.

And the slowdown in growth rates of the overall economy has resulted in the decline of the growth rates of the manufacturing, services, and agriculture sectors. For example, in 2007, the agriculture sector grew at 9.7 percent, while in 2013, it grew at 7.1 percent. Similarly, in manufacturing, the growth rate was at 9.5 percent, while it dropped to 5.5 percent. Similarly, in services, the growth rate was at 10.6 percent, while it dropped to 6.4 percent.

From 2007 to 2012, the economic growth rate was around 9 percent, but from 2012, this rate increased to 9.7 percent. But it only increased for one year, from 2013 to 2014; the economic growth rate fell to 6.8 percent. From 2014 to 2015, it decreased to 5.6 percent, and from 2015, it decreased further to 4.6 percent.

 

Conclusion: Every country in the world has different policy priorities. Some countries, like the U.S. for instance, want GDP growth that’s sustainable over the long term. They want an economy that grows rapidly. Other countries want higher GDP growth. For instance, India is in the middle of a transition from its growth is mainly driven by exports and industry to the more fundamental part of the country.

Global slowdown and trade tensions have led to a deceleration of the global economy. India is seeing a similar slowdown. A report by Crisil points to a slowdown in manufacturing growth.

India's natural gas demand is predicted to grow by 29%, diesel by 35%, petrol by 20% in FY2023, according to the EIA. This will be powered by expansion in the primary and secondary industries, consumption of industrial gases, and agriculture.

 

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