After a brief remembrance of Political events occurs post Independence, let us take a look at milestones achieved by Indian Economy After Independence. In this chapter, I will try my level best to gather most of the developments of Indian Economy till now. If in any case, you find something misleading or wrong, feel free to contact.
1. Bombay Plan 1944:
Though it happened before Independence, still affected Indian Economy post that.
While the World War II was pulling to a close, Ratan Tata was considering of shaping up India’s industrial potential. He along with other industrialists such as G. Birla and K. Lalbhai, and technocrats like John Mathai, and A. D. Shroff got such an effort off the ground. This ended in January 1944 in a complete document named ‘A Plan of Economic Development for India,.’ This plan was the ‘Bombay Plan 1944.’
This plan recommended state action in shaping impartial growth, defending national businesses against external competition, & focusing on developing strong industries.
Though, the supporters of the Bombay Plan knew the perils of a free-market approach to India’s growth and sought to work in a corporation with the country.
Manmohan Singh, in one of his interview, said that he was a profound fan of the economics of Bombay plan for Indian Economy.
2. Planning Commission and Five Years Plans:
After 1947, many questions our country leader were facing many issues. The Indian Economy was nowhere to stand after the departure of British. Leaders had the hurdles to make Indian economy better. So the Planning commission was constituted in 1950. The Planning Commission was directly reporting to the Pandit Jawahar Lal Nehru. Planning Commission was designated the task of forming plans for the most efficient & even-handed use of sources with proper determination of preferences. Since then, the Planning Commission was outlining the national economic programs every five years, hence known as the Five-Year Plans. Pandit Jawaharlal Nehru conferred the First Five-Year Plan of India in the year 1951.
PM Narendra Modi replaced the planning commission by NITI Aayog (National Institute for Transforming India Aayog) on Jan 1st, 2015.
3. Green (1963) and White (1970) Revolution in India:
It is the era when India expand its cultivation yield due to better agricultural-economic technology. It allowed us to defeat persistent food shortages. The “Green revolution” born in the 60s, but its seeds were sown in 1953 through the introduction of high-yield crop families & application of modern farming techniques. It directed to an improvement in food production in India.
sh. M.S. Swaminathan is the glorious “Father of Green Revolution in India” for his management and achievement in introducing high-yielding species of wheat. He is the founder member & chairman of MS Swaminathan Research Foundation.
Operation Flood originated with the White Revolution in India to make our country self-independent in milk production & this was accomplished through the cooperative structure entirely. Nowadays, around 10 million farmers in more than 20 states own around 3000 milk dairy plants which handle around 20 million liters of milk/day.4
4. Nationalization of Banks In 1969:
As we know the overnight announcement of Demonetization by PM Narendra Modi, Indira Gandhi took way more bold step 4 decades ago. In 1969, Indira Gandhi led Congress govt. Nationalized 14 commercial banks.
What happened: These banks were controlling 70% of Indian deposits. The plan was to transfer all that fund to Government. Unlike Demonetization, where all money in people’s household called back to banks. The directive that established bank nationalization was called the Banking Companies (Acquisition &and Transfer of Undertakings) Ordinance, later passed by the act of the same name.
Why: SBI was the only national bank till 1969. Its old name was Imperial Bank Of India before nationalization in 1955.
The first reason Government gave was unpredictable manner they were affecting Indian Economy. Almost 400 banks failed in the period of 45-60 and resulted in depositors losing their money with them.
These banks were only helping big businesses and industries. The agricultural sector was nothing in the eyes of these banks. In the late 50s, only 2.4 % of the bank loans were directed to the agricultural sector. But the condition even worsened after that. Hence, with the amount fading to 2.2% by 1968.
Advantages: State motive was to provide loans and to make credit available for Indian Economy’s Key sectors like Agriculture, small traders, and industries. Also, rural bank branches were open at that time.
***Its seems to be a myth now. Big banks still care about Big industries and agricultural sector is dying day by day even in 2017***
5. INR Devaluation in 6/6/66 event 1966:
Every country, besides the USA, devalues their currency to secure their goods cheaper & more competing in the international market. Devaluation assists boost our exports with a goal of sustaining trade.
Why: With the increased population and comparatively less growth of food, 65 droughts, 1962 war. India had to import 16 million tonnes of grain from the USA. It drained India’s foreign exchange reserves. To strengthen its army, India had to buy arms from foreign countries after 1962. In 1965, Indian foreign exchange reserve was tiny, i.e., 625 million dollars.
What was the solution: The devaluation of ₹ occurs from ₹ 4.76 to ₹ 7.50 to get out of these circumstances.
The devaluation was necessary for promoting exports & drawing in foreign funds into the country. It was an important step to dodge a big financial crisis in India. Although it was a move in right way for Indian Economy, further means of liberalisation had to wait due to deep antagonism from left parties. India had to wait another 25 years till 1991 and Manmohan Singh to make significant changes in the Indian economy.
6. Manmohanomics Of 1991 liberalisation of Indian Economy:
The year 1991 is an important milestone for Indian Economy post Independence. The country was going through economic emergency triggered by a drastic Balance of Debts state.
Manmohan Singh, a designated economist, converted this mess into an opening to propose some radical changes in the content and approach to Indian economic policy. The primary goals of 1991 reforms were:
Dive Indian economy into the bowl of Globalization & give it a new jump start on market adjustment.
The policy designed to take down the inflation rate and to eliminate shortcomings in payment.
To authorize the global flow of goods, services, money, and technology, without restrictions.
To accomplish economic stabilization & to transform the Indian Economy into a market-based economy by excluding all kinds of undesirable limitations.
It aims to improve the partnership of private sector in all quarters of the Indian economy. That’s why the reserve numbers of sectors for government are just 3.
If the Indian economy is shining like a bright star at the world map today, it’s sole credit goes to the Manmohanomics in 1991.
7. India becomes the Member of WTO 1995:
The WTO (World Trade Organisation) has a significant role in fashioning out the trade as a key factor for obtaining higher growth goals for all the developing countries. This impact of WTO differs from country to country even within the class of the similar nations because of distinguishing economic factors.
Pluses of WTO Membership for India:
WTO has a significant role in helping developing countries like us to compete in global markets.
Along with encouraging commercial relationship among different countries, it is contributing to making sure that the trade and growth go hand in hand.
WTO is the platform for developing nations to compete for the quality of their goods & services with others.Hence, the quality of goods & services improves, which in turn enhance the life quality.
The biggest achievement of WTO is that it provides a market to signatory countries for their manufacturing goods which ultimately improved our export at the higher price.
It also provides technical support, education of quality goods, newer technologies to the developing countries like us.
It ensures the fair trade practices, and in the case of dispute, solve them.
Minuses of WTO Membership for India:
Right now, Big Industrialized countries dominate the WTO. So developing nations like India has very limited say in this.
Being a developing country, India has fewer human & technical means and hence, we frequently enter negotiations less processed than developed counterparts.
Through the several treaties signed under the WTO, the developing countries have seized a broad range of growth opportunities.
Many leaders fear neglection of local economy and trade because of global commerce.
Agenda of WTO sometimes seems to be in favor of developed nations.
Principally, there should be some relaxation in rules as per economic conditions of various countries. Unfortunately, rules are same for even Bangladesh and USA.