Indian Economy 1950-1990: Economic Systems, Challenges

The Indian economy 1950-1990, went through four decades, during which the Five-Year Plans were implemented. During this period, several important developments occurred in agriculture, commerce, trade, and other economic fields. India moved from a primarily agrarian economy to a mixed industrial one without complications. The Class 12 Chapter regarding the Indian economy from 1950-1990 discusses various economies.

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Indian Economy 1950-1990 Economic Systems

Capitalist or Market Economy:

Socialist or Centrally Planned Economy:

Mixed Economy:

Planning Commission- Indian Economy 1950-1990

What is a Plan?

• Economic Challenges in India

• 5 Reasons to Choose the Commerce Stream After 10th

Goals of The Five Year Plans- Indian Economy 1950-1990

Growth:

• Growth signifies the augmentation of a nation's capacity to produce goods and services domestically.
• It involves an increase in productive capital, expansion of supporting services like transport and banking, or enhanced efficiency in both capital and services.
• A key measure of economic growth is the consistent rise in Gross Domestic Product (GDP), representing the market value of all final goods and services produced within the country in a given year.
• The GDP is derived from different sectors, including agriculture, industry, and services, shaping the structural composition of the economy.

Modernization:

• Modernization entails adopting new production techniques to enhance the output of goods and services.
• This could involve farmers using improved seed varieties or factories employing advanced machinery.
• Modernization isn't confined to technology alone but extends to societal changes, such as acknowledging equal rights for women. Modern societies often leverage the talents of women in various fields, contributing to prosperity.

Self-reliance:

• Self-reliance focuses on fostering economic growth and modernization using a nation's own resources, minimizing dependence on imports.
• Early Five-Year Plans emphasized self-reliance to reduce reliance on foreign goods, especially given India's recent independence.
• The policy aimed to safeguard sovereignty by avoiding vulnerability to foreign interference in policies.

Equity:

• In addition to growth, modernization, and self-reliance, equity is crucial.
• Equity ensures that economic prosperity benefits not only the affluent but also reaches the impoverished sections of society.
• Basic needs like food, decent housing, education, and healthcare should be accessible to every Indian, and efforts should be made to reduce wealth inequality.

Agriculture- Indian Economy 1950-1990

1. Land Reforms (Institutional Reforms):

• Land reforms aimed to bring about equity in agriculture by altering land ownership patterns.
• At independence, the land tenure system featured intermediaries like zamindars, who collected rent without contributing to farm improvements.
• The low productivity in agriculture led to food imports from the United States, despite the sector employing the majority of the workforce (70-75%).
• Various land reform measures were implemented, including the abolition of intermediaries or the zamindari system.
• The "land to the tiller" policy sought to eliminate intermediaries, making tillers the landowners.
• While successful in freeing tenants from zamindar exploitation, some challenges persisted.
• Former zamindars retained land through legal loopholes, and the poorest agricultural laborers did not benefit.
• Another measure was the Land Ceiling Act, setting a maximum land size per individual to reduce concentration and promote equity.
• Challenges included legal opposition and loopholes exploited by large landholders to retain their holdings.

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2. Green Revolution (Technological Reforms):

Reasons for Embracing the Green Revolution Include:

1. When the country gained independence, some 75 percent of the population relied on agriculture as its source of livelihood.
2. Poor production was due to out-of-date technology and a lack of basic infrastructure among most of the farmers in the agriculture sector.
3. In India, agriculture had always relied on the rains, and if there was any shortfall in monsoon rainfall, there were always serious problems for farmers.