Economic challenges faced by INDIA in the 75 years of

independence
In 75 years since independence, India as a nation has shown stellar growth.
Today, the country is an economic powerhouse with significant progress made
from agriculture to space technology, from manufacturing to services industries;
world class educational institutions; affordability of healthcare for all and
consequently lifting millions from extreme poverty.
India on the eve of independence
The two-hundred-year British colonial rule devastated the Indian economy.
While India found herself independent from the British, it was still to find
independence from social, economic, and political problems that hindered
India’s growth. India found herself standing on the threshold of a new era
wherein the task was to build a strong nation.
Agricultural sector
India, at present, is a net exporter of food grains and there has been a massive
jump in production and availability of all items of daily consumption. Milk, egg,
and fish production has increased exponentially. At the time of independence,
about 85% of India’s population derived livelihood directly or indirectly from
agriculture. Despite being the occupation of a large population, agricultural
sector continued to experience stagnation. The major cause for this stagnation
was the various systems of land settlement introduced by the British, especially
the zamindari system. The sector was saddled with surplus labour and extremely
low productivity. During the partition, India inherited 82% of the population but
only 75% of the cereal production of the undivided country. Food security was a
major concern. The Green Revolution introduced a scientific approach to
agriculture in a country where most of the farming was rain-fed. Though the
Green Revolution had its own limitations like frequent irrigation, use of chemical
fertilisers and higher cost, it was successful in ensuring food security by
increasing production. Market intervention and price support to stabilise
agricultural prices was also instrumental in the growth of agricultural
production. From importer of food grains, India is now the grain basket of the
world.
Industrial sector
During many decades after independence, India was largely an agrarian
economy. But for any economy to be globally successful it must have a robust
industrial sector. Therefore, for the first seven five-year plans India actively
focussed on industrial development through industrial policy formation. After
independence, India’s industrial sector was in a pathetic condition. It only
contributed about 11.8% to the GDP. The output and productivity were abysmal.
We were also technologically backward. One of the biggest hurdles in industrial
development was the lack of capital. Private industrialists did not have enough
capital to build a new industry. And even if they did, the risk involved was too
high. So, in 1948, it was decided that state would play the primary role in
promoting the industrial sector. During the second five-year plan the Industrial
Policy Resolution (IPR 1956) came into action. The aim was to introduce more
private capital into the industry but in a systematic manner. In 1955, a special
committee known as the Karve Committee advised the promotion of small-scale
industries for the purpose of rural development. It was believed that since small-
scale industries are more labour intensive, they would create more
employment. At present, India is the world's largest manufacturer of generic
drugs, and its pharmaceutical sector fulfils over 50% of the global demand
for vaccines. The Indian IT industry is a major exporter of IT
services. India's chemical industry is extremely diversified. The tourism
industry contributes about 9.2% of India's GDP and employs over 4.2 crore
people. The industrial sector contributes about 26% of India’s GDP.
Service sector
The service sector is the largest and fastest growing sector in India and has the
highest labour productivity. The sector, which was almost non-existent at the
time of independence, is now the largest contributor of the GDP (54%). The
growth of India’s service sector has drawn global attention. Unlike other
countries where economic growth has led to a shift from agriculture to
industries, in India there has been a shift from agriculture to the service sector.
Globalisation that followed the introduction of the New Economic Policy is the
primary reason for this shift.
Infrastructure
Indian road network has become one of the largest in the world. Compared with
20,000 km of National highways in the 1950s, the total length has increased to
1,26,000 km. Air travel saw rapid expansion after the 1990s. As against 37 million
fliers in 1995, 2018-19 saw 345 million people getting on a plane. In the 1950s,
railways were the main mode of long-distance travel. In 1950-51, non-suburban
passengers constituted the bulk of rail travellers. Today, more the half of the
passengers are those who use railways for their suburban commute while long-
distance travel has moved to highways and airlines. After almost seven decades
of Independence, India has emerged as the third largest producer of electricity
in Asia. In terms of telecom, India has travelled from landlines to 5G, which is
soon to be launched.
Education and healthcare facilities
Getting itself out from widespread illiteracy, India has managed to bring its
education system at par with the global standard. At independence, India’s
literacy rate was a paltry 12.2 % which increased to 74.04% as per the 2011
census. Decrease in death rates is considered one of the major achievements
that came India’s way. While life expectancy was around 37 years in 1951, it
almost doubled to 65 years by 2011. In 2022, it was increased to 70.19 years.
Similar improvement was noticed in the maternal mortality rate also. India’s
maternal mortality rate also declined from 212 deaths per 100,000 live births in
2007 to 103 deaths in 2017-19.
India’s GDP
At the time of independence, per capita income of India was a little more than
Rs 250. It is 500 times higher than what it was in the 1950s. India’s GDP which
stood at around Rs 2.7 lakh crore has travelled far to be Rs 147.79 lakh crore
today and is also the fifth largest economy in the world at present. As per Bank
of America, the Indian economy is expected to become the third largest
economy by 2031. Indian forex reserves, which stood at Rs 1029 crore in 1950,
now stands at Rs 46.17 lakh crore. Indian forex reserve is the world’s fifth largest
at present.
Hurdles to growth
On one hand, India is receiving accolades for a sustained growth rate but on the
other, it is still a low-income developing economy. Even today, nearly 25 percent
of India’s population lives below the poverty line. Also, there are many humans
and natural resources which are under-utilized. India also has a problem of
unequal distribution of income and wealth. This makes the problem of poverty
a critical one and a big obstacle in the economic progress of the country. We
have a high-level of birth rates and a falling level of death rates. In order to
maintain a growing population, the administration needs to take care of the
basic requirements of food, clothing, shelter, medicine, schooling, etc. Hence,
there is an increased economic burden on the country. The deficiency of human
capital and the absence of skilled labour are major hurdles in spreading
technology in the economy.
Future India
India has come a long way over the past 75 years in transforming herself as a
nation and improving the quality of lives for her citizens. Major concerns of the
Indian economy would be to eradicate poverty, provide proper education and
healthcare facilities to all regions, promote gender equality, and empower
women, and ensure sustainable development. These would be the best goals for
India to achieve as she is progressing to the 100th year of her independence.