Growth performance of the Indian economy since Independence Submitted By: Alan Alexander Cruz WMG-192002

India's GDP Growth (at Market Prices & at Factor Cost)

Year 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70

Decade

Analysis

Reforms Era

Growth Stage

50's 50's 50's 50's 50's 50's 50's 50's 60's 60's 60's 60's 60's 60's 60's 60's 60's

In the backdrop of IInd World War and Partition,the aim was to alleviate poverty and reduce dependency on foodgrains imports, therefore,a series of plans were initiated post independence with clear focus on agriculture,irrigation and power projects. However,soon ,India ran into trade deficits. India had a budget deficit problem, therefore could not borrow money from abroad or the private sector,which itself had negative savings rate. As a result govt issued bonds to the RBI that increased money supply ,leading to inflation in Mid Sixties,foreign aid,which was a key factor in preventing devaluation of the rupee was finally cut-off and India was told to liberalize its restrictions on trade before foreign aid would again materialize.India went for devaluation along with liberalization. Due to Indo-Pak war ,US and other countries friendly towards Pakistan withdrew aid and which further necessitate devaluation .Defence spending incrdeased to 24% of expenditures,this accompanied with a drought led to severe devaluation of rupee

PreReforms

Considerable Economic Growth

PreReforms

Considerable Economic Growth

60's

1970-71 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 1977-78 1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 1984-85 1985-86 1986-87 1987-88 1988-89 1989-90

70's 70's 70's 70's 70's 70's 70's 70's 70's 70's 80's 80's 80's 80's 80's 80's 80's 80's 80's 80's Wars with China in 1962 mwith Pakistan in 1965 and 1971,a flood of refugees from east pakistan in 1971,droughts in 1971 and 1972,currency devalutaion in 1966, first world oil cirsis 1973-74 all jolted the country

Pre-Reforms

Stagnation of Economic Growth

Sixth and 7th five plans were executed ,instead of GNP approach to development,sought to achieve higher production targets with concomitant increase in enployment opportunities for the poorest section of the society. Focussed shifted on strengthening the infrastructure for both agriculture and industry.Policies were aimed at rapid growth of food production

Pre-Reforms

Significant Economic Growth

1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

90's 90's 90's 90's 90's 90's 90's 90's 90's 90's 00's 00's 00's 00's 00's 00's 00's 00's 00's 00's 00's

India liberalized the domestic economy and opened up to foreign trade and investment. Private sector was increasingly freed to get on with its business. Economic reforms unleashed the entrepreneurial spirit of Indian industry.

Reforms & Post-Reforms

Dynamic Economic Growth

Riding high on the reforms initiated in 1980's and 1990's ,India has maintained an 8% plus growth rate for the decade strating from 2000,despite the 2008 world economic crisis.In 2005,software industry grew by 33% and the BPO industry grew by 37%.As per research firms ,India will be a developed econmomy by 2040.

Post -Reforms

Rapid/Fast Economic Growth