Indian Economic Development (1950-1990) : How Indian Economy Progressed After Independence

Indian Economic Development : 15 August 1947, A new dawn of freedom for India. Finally, India became the master of its fate after two hundred years of British colonialism. The job of nation-building was in our leaders' hands.

Leaders of the newly independent India had to decide what type of economic system would be suitable for the country to promote the well-being of all. There are different types of economic systems like capitalist society, socialist society, and mixed economy. Among them, Jawaharlal Nehru preferred Socialism.

However, Nehru was not in favor of the kind of socialism which was prevalent in the Soviet Union where all the means of production were owned solely by the government. There was no private property.

Though the government of a democratic country like India couldn't change the ownership pattern of land and other properties of the citizens.

The leadership of the newly independent India found an alternative to an extreme version of socialism and capitalism. India being tilted toward the socialist outlook sought to be a socialistic society with a strong public sector but also a private sector.

In this view, the Indian government set up the Planning Commission with Prime Minister as its Chairperson. Since then the era of the Five Year Plans had begun.

Indian Economic Development : Goals of Five-Year Plans

Industry

Indian Economic Development : At the time of independence, the industrialists of India had no capital for investment. The market was also not big enough to encourage industrialists to take on any major projects even if they had the capital to do so. And, due to these reasons, the state had to play an important role in promoting the industrial sector.

The decision of developing the Indian economy on socialist lines led to having complete control of those industries that were vital for the Indian economy.