 INTRODUCTION:

ECONOMIC TRENDS IN INDIA CAN BE STUDIED UNDER THREE PHASES:

1) INDIAN ECONOMY IN THE PRE-INDEPENDENCE PERIOD.

2) INDIAN ECONOMY AT THE TIME OF INDEPENDENCE.
3) INDIAN ECONOMY IN THE POST-INDEPENDENCE PERIOD.
 INDIAN ECONOMY IN THE
PRE-INDEPENDENCE PERIOD
The pre-independence period was a period of near stagnation for the Indian Economy. India
was under British rule from to th, August
During this period all economic policies were formed so as to benefit British Manufacturers
by getting cheap Indian Agricultural products like jute, cotton, tea, indigo, rubber, etc.
The Britishers were not interested in development of Indian Economy.
The growth railways and spread of education, irrigation, revenue settlements were all
initiated with one supreme goal i.e., accelerate the process of Economic Drain from India.
The British regulatory role was to extract maximum by way of levied taxes and war taxes to
help Britain. Besides this some promotional work had been done by way of protection in first
half of the 19th century, which helped in Industrialisation of India.
 INDIAN ECONOMY AT THE TIME OF
INDEPENDENCE
Indian economy at the time of independence was overwhelmingly rural and agricultural in character
with nearly 85% of population living in villages and driving their livelihood from agriculture and
related pursuits using traditional low productivity techniques.
Even with this large population engaged in agriculture, the country was not self-sufficient in food and
raw materials for industry.
The average availability of food was not only deficient in quantity and quality but also illiteracy rate
was very high, majority of children in the age group of 6-11 not attend school, mortality rates were
very high, absence of good public health services.

Thus, the economy was faced with the problems of mass poverty, ignorance and diseases which were
aggravated by the unequal distribution of resources between different regions.
 INDIAN ECONOMY IN THE POST-
INDEPENDENCE PERIOD
Immediately after the attainment of independence, government main concern is to
make the country economically sound and to alleviate shortages of essentials food
items.
It aimed to make India a welfare nation, bring prosperity, eliminates poverty, reduce
disparities of income and regional imbalances. The country adopted a system of
mixed economy reserving key industries, minerals and infrastructure sector for
state enterprises besides defence, production, transport and communication.
Finally, under the auspices of the central government, the prime minister Nehru ji
set up the planning commission in 1950 to assess the country’s need of material ,
capital and human resources.
The planning commission was set up to formulate a plan for the most effective and
balanced utilisation of the country’s resources.
 ECONOMIC REFORMS IN INDIA:
LIBERALISATION, PRIVATISATION AND GLOBALISATIONS
(LPG) MODEL OF DEVELOPMENT

Economic reforms in India were introduced in 1991 by the Congress government led by Mr. P V
Narsimha Rao.
During this age of economic crisis our government implement Economic Reforms so as to
accelerated the progress of development.
 PRIMARY GOALS:
• A higher rate of growth.
• Reduction of population below poverty line.
• Reduction of regional disparities.
• Enlargement of employment potential leading to full employment.
 LIBERALISATION
Liberalisation refers to the end of license, quota and many more restrictions and controls which
were put on industries before 1991.

 OBJECTIVES OF LIBERALISATION:
• Development of agricultural sector.
• To promote foreign direct investment.
• Exchange of information and knowledge.
• Optimum utilisation of resources of the country.
• To control red-tapism and bureaucracy, inefficiency and wastage of resources.
• To maintain a competitive industrialisation environment.
 LIBERALISATION IN
INDIA:
The Indian companies got liberalisation in the following way:

• Abolition of license except in few.

• No restriction on expansion or contraction of business activities.
• Freedom in fixing prices of goods and services.
• Liberalisation in import and export.
• Easy and simplifying the procedure to attract foreign capital in India .
• Freedom in movement of goods and services.
 PRIVATISATION
Privatisation refers to giving greater role to private sector and reducing the role of
public sector.
CHARACTERISTICS OF PRIVATISATION:
• Privatisation promotes economic and technical efficiency.
• Privatisation reduces government’s interference and increase the freedom and
speed of decision-making.
• Privatisation is the process of deregulation, denationalisation and disinvestment.
• Privatisation reduces the ownership and control of state on the factors of
production.
 PRIVATISATION IN INDIA:
To execute the policy of privatisation, our government took the following steps:
• Disinvestment of public sector i.e., transfer of public sector enterprises to
private sector.

• Setting up of Board of Industrialisation and Financial Reconstruction(BIFR).This

board was set up to revive sick units of public sector enterprises suffering loss.

• Dilution of stake of government. If in the process of disinvestments, the private

sector acquires more than 51% shares then it results in transfer of ownership
and management to the private sector.
 GLOBALISATION
Globalisation refers to integration of various economies of world. Till 1991 Indian Government
was following strict policy in regard to import and foreign investment through licensing of
imports, tariff restrictions etc. but after new economic policy, government adopted the policy of
globalisation by taking the following steps:
• Government removed many restrictions from import of capital goods.
• Foreign Exchange Regulation Act(FERA) was replaced by Foreign Exchange Management
Act(FEMA).
• Rationalisation of tariff structure.
• Abolition of export duty.
• Reduction of import duty.
“DUE TO GLOBALIATION WHOLE WORLD BECOMES A GLOBAL VILLAGE”.
 IMPACT OF CHANGES IN ECONOMIC
POLICY:
INCREASING COMPETITION.
MORE DEMANDING CUSTOMERS.
RAPIDLY CHANGING TECHNOLOGICAL ENVIRONMENT.
NECESSITY FOR CHANGE.
NEED FOR DEVELOPING HUMAN RESOURCES.
MARKET ORIENTATION.
LOSS OF BUDGETORY SUPPORT TO PUBLIC SECTOR.
EXPORT A MATTER OF SURVIVAL.
©ANURAG CONCEPTUALS.