When the British left India, our economy was in a pathetic state. They had been exploiting our resources recklessly. Acute poverty, unemployment, frequent famines, illiteracy, and low productivity, etc. were rampant in the country. An English M.P. was forced to declare, “No civilized government ever existed on the face of this earth which was more corrupt, more perfidious and more rapacious than the Government of the East India Company.” On the eve of independence, there was no basic industry that could help the growth of other industries in the country. Agriculture was primitive.
To achieve proper economic development we started Five Year Plans and Nine Plans were implemented by these Plans, we have been able to achieve good progress in several fields. The Tenth Plan: is in progress.
When India became independent, the industrial sector was very small. In 1950-51 only per cent of the national income came from industries. The number of people employed in the industries was only 9 per cent. Now a large number of people are employed in the industries. The position of basic and capital goods has improved a great deal. The prospects for a significant growth in the gross domestic product (GDP) to above 2 per cent in 1994-95 from 3.8 per cent in 1993-94, have considerably brightened following reports of a noticeable uptrend in industrial production since November 1993 and the index rising to 3.3 per cent for the whole of 1993-94- against- 1.8 per cent in 1992-93, and almost a nil growth in 1991-92.
Agriculture is the back-bone of our economy. It-contributes the largest share to the national income of the -country. It is the primary source of savings and hence capital formation in the country. We have made good progress in the field of agriculture. The vagaries of the monsoon play havoc with agriculture. All the same, it is expected that the agricultural production will be rising by 2-3 per cent, with the yield of good grains at a new peak of 184-185 million tons.
As a result of privatisation and economic liberalisation our economy, to quote the Finance Minister, “is now back on the rails.” Investments from foreign companies are allowed. This will accelerate the process of industrialisation.
According to a report published in June’ 94 by the World Bank, the Indian economy remains the fifth largest in the world:-India is behind the United States, China, Japan and Germany according to the purchasing power parity (PPP), a method popularized by the I.M.F , the world and led to a new look at China and India. By these figures, the Chinese economy will be the number one in the world, ahead of even the US, in a few years.
India’s gross domestic product grew in 1970-80 at an annual average rate of 3.4 per cent rising to 5.2 per cent in 1980-92.
In 1970 agriculture accounted for 45 per cent of India’s GDP. By 1992 this had been reduced to 32 per cent.
Industry’s share increased from 22 to 27 per cent, that of manufacturing from 15 to 17 percent, and of services from 33 to 40 per cent. The value added in agriculture rose from 59.103 billion to 69.682 billion dollars.
Merchandise trade figures show that India exported 19.795 billion dollars worth in 1992 against China’s figure of 84.940. Indian imports in 1992 worth 22.53 billion dollars are dwarfed by China’s 80.585 billion dollars.
India’s external debt was 76.983 billion dollars in 1992 against 20.582 billion dollars in 1970. The foreign exchange reserves held by the Reset-Ye Bank of India have been rising steadily.
India’s march towards a market economy is widely lauded. Investments, internal and external, have increased lately. But India is lacking in fiscal discipline.
The so-called Asian `tigers’— Hong Kong, South Korea, Singapore‘, and Taiwan — started their economic development in the early fifties like India. These countries had no huge natural resources and, had difficulty in providing the basic necessities of life. Today no other group of developing countries has performed like these nations in sustaining rapid growth and reducing poverty. The per capita income of India stood at $ 330 in 1990 and that of South Korea at $ 6,498. The per capita incomes of Hong Kong and Singapore were $ 13,400 and $ 12,-364 respectively in 1990. India can do well if it emulates the development strategies followed by these East Asian countries, with appropriate modification to suit the country’s conditions.
It is true that our economy is getting strengthened. But has it helped the majority of the people in the country? Certainly not acute unemployment, poverty, spiraling prices, illiteracy and population explosion plague the country.