India’s Economic History

Since Independence

GDP
Poverty Group 1 - B
Employment -Ashwini S. Rao
-Aditi U.Gowda
Industrial Growth -Guruprasad N. Patel
-Likith R. Prakash
-Nithya
-Sachin
HISTORY

 Indus valley civilization.

 British colonial rule.
 British infrastructure.
 Deterioration of economy.
 Dumping ground.
 Taxes
 Early independence
British colonial rule

 India had 32.9% gdp of the world.

 Company rule in 1757.
 Institutional environment and
infrastructure of railways and
telegraph.
 Foreign policies aimed at
exploitation.
Contd..

 Severe famines,droughts and heavy

taxes
 India was made a dumping ground.
 Indian industries were inundated.
Early independence

 Protection of home industry.

 Public sector and nationalisation.
 High Import tariffs,import
substitution.
 Encouragement to small and
cottage industries.
 Finance infrastructure.
 INDUSTRIAL POLICY AND GROWTH
SINCE 1947

 Ambitious plan of industrial development and

encouraged the setting up of new industries
and the expansion of existing industries.

 India used its import policy for the healthy

development of local industries.

 Restrictions were imposed on the import of

industrial goods.
 The effort of the Government was to
encourage the production of industrial goods
indigenously which were restricted from
import.

 Local industries were encouraged to have

foreign collaborations and to import the
technical know-how.
 Some Plans Undertaken by
Government for Industrial Growth
 The Second and Third plans emphasized on the
development of capital goods industries.

 Apart from strict control over imports and the physical

ban on the imports of many products, customs tariffs
were raised in some cases to 200 to 300% on imported
products/goods.

 To provide the financial infrastructure necessary for

industry, the Government set up a number of
development banks like ICICI, IDBI, LIC, UTI.

 Regulations under the Foreign Exchange and Regulation

Act (FERA) restricted foreign investment in a company to
40%.
What is GDP
 GDP(Gross domestic product)
Aggregate monetary value of of all
the goods and services produced in
the country during a period of time.
Calculation

3 ways
 Supply/production side

 Income side

 Demand/expenditure side
 Supply/production side

We broadly classify the whole economy into

distinct water-tight segments.
From here we estimate the total value of output
and the corresponding value of inputs of raw
materials and services used for production, after
getting the necessary estimates the value added
of each sector as a total value of output minus
the value of inputs raw materials and services is
attained. A similar exercise is carried out for
services too and estimate of GDP is arrived at.
Income side

The income generated during the

production of goods and services is
distributed between two primary factor
inputs, labour and capital.
Income is distributed among people
who own the capital and people
putting their labour.
 Demand /expenditure side

The income generated at the production

stage finally will be spent taking the
form of final expenditure.
Final expenditure is then classified into
Private Final Consumption
Expenditure(PFCE), Govt Final
Consumption expenditure(GFCE) and
Gross Fixed Capital
Formation(investment).
 Contd..
 PFCE would include all household
expenditure on goods and services
except on land and buildings.
 GFCE would include the amt Govt pays
to its employees, the remaining part
i.e., gross fixed capital formation would
include various kinds of investments.
Adding all three expenditures would give
the estimate of GDP.
GDP GROWTH RATE IN INDIA
 As per the estimate by Ministry of Statistics and
Programme Implementation, GDP of India in the
year 1990 stood at 5,542,706 in comparison with
842,210 in 1975.

 Information technology, telecommunications,

electronics and hardware, pharmaceuticals,
biotechnology, consumer durables, retail,
infrastructure, airlines, hospitality, power, etc are
sectors which contributed to the success of India
GDP history post 1990s.
 Since 1997, Indian economy has registered an
average growth rate of more than 7%.though in
2009 there was a dip to7.4% and to 6.5% in
2010.

 India’s GDP has grown at a slow but steady pace

 Where India stands?

 In terms of GDP India stands 12th

 In terms of agricultural output India is the

second largest

 In terms of factory output India ranks 14th in

quantity produced by industrial sector
 Factors contributing to GDP.
 For the elevation in the production volume in
Indian agriculture various five year plans
should also be given due credit, as each year
they concentrated on each of the sectors that
needed attention.

 Improvements in irrigation methods as well as

usage of modern technologies have also added
value to the agriculture processes. 
 Gas, mining, electricity and quarrying industries
also play major developmental roles and
contribute in a major way to the GDP.

 But off late service industry has contributed the

most to GDP around 54 %, though majority of
the employed population is in the agricultural
sector.
 Employment scenario in India

 The real challenge facing the developing countries

during the current and future decade is now
recognized as one of providing employment
opportunities for all those who want to work.

 It is also widely recognized now that economic

growth does not automatically ensure the growth
in employment opportunities adequate to match
the growth in labour force.
 Growth and decline of employment in India

 From 1950 to the mid 1970’s employment in India

was more concentrated in the rural areas i.e. 65%–
70% of the population was in the agriculture
sector.

 The trend slowly started changing in the 1980’s,

and with the economic liberalization taking place in
the 1990’s the employment started moving to the
other sectors, i.e. the manufacturing and service
sector
 Salient Features of Employment in India:

 7% of the total employed are in the organised

sector i.e., unorganised sector dominates in the
employment scenario.

 Additional employment generation in the organised

sector is not significant i.e., scope for additional
wage employment in the organised sector
continued to be less.
 Significant employment generation took place in the
tertiary sector particularly in services industries.

 Substantial employment growth was observed in

the small and unorganised sector, i.e., in small and
tiny enterprises.

 Self-employment and casual labour continued to

play a pivotal role in rehabilitation of the
unemployed.
The Government has taken a number of
steps to curb the unemployment

 Prime Minister’s Rojgar Yojna(1993)

 Rural Employment Generation Programme(1995)

 Swarna Jayanthi Gram Swarojgar Yojna(1999)

 Sampoorna Grameen Rojagar Yojna(2001)

 Mahathma Gandhi National Rural Employment

Guarantee Act 2005.
POVERTY
Poverty

 Meaning- Poverty is the lack

of basic human needs, such
as clean water, nutrition, health
care,education, clothing and
shelter, because of the inability to
afford them.
Trends in Poverty, 1973 to 2005
Causes

 Dependence on primitive methods

 Population
 Illiteracy
 Regional inequalities
Steps for elimination

 Public distribution
 TRYSEM
 Small farmer’s development
programme
 National rural employment
programmes
 Minimum needs programmes.