Economic Growth pre and post Indian independence

Since Indian Independence day (76th Birthday) is fast approaching, I tried to revisit the past to find how Indian economy has grown. This is just at a high level so that we appreciate where have we come from and how far! I have got this subdivided in 2 parts: Pre and post independence. I am sure we will reminisce our school NCERT books or few of those MBA days while going through this 600 pager read. Believe will be a good information to ‘Note’!

Section 1: Economic Growth Pre-Independence

During my exploration of India’s history, I’ve delved into a fascinating era marked by a complex interplay of economic exploitation and indigenous resilience. The pre-independence period was a time when the British colonial rule, spearheaded by the British East India Company and later the British Crown, had far-reaching consequences on India’s economy.

Growing up, I often heard stories of how India’s wealth was systematically drained during this period. As I immersed myself in research, I came across the “drain of wealth” theory championed by leaders like Dadabhai Naoroji. It was eye-opening to realize how India’s resources were exploited and siphoned off to Britain, perpetuating economic dependence and hindering the growth of indigenous industries.

This visual representation vividly showcased the stark trade imbalance between India and Britain, revealing how India’s exports and imports were skewed in favor of the British.

You can see that despite being export heavy, Britain (or their colonies) accounted for India’s most trade. They exported all raw material and imported finished goods at prices that suited briteshers. When the Suez canal was developed, it reduced the transportation costs by 90%. Cargo ships before this had to go around Africa and incurred a lot of cost. However its benefits and funds were utilized by British to fund their admin costs and whims.

Another facet that struck me was the impact on agriculture. Learning about the displacement of food crops due to the introduction of cash crops like indigo and jute highlighted the consequences of British policies on India’s agrarian economy. The famines that ensued further underscored the exploitative nature of these policies.

This visual representation vividly showcased the stark trade imbalance between India and Britain, revealing how India’s exports and imports were skewed in favor of the British.

Another facet that struck me was the impact on agriculture. Learning about the displacement of food crops due to the introduction of cash crops like indigo and jute highlighted the consequences of British policies on India’s agrarian economy. The famines that ensued further underscored the exploitative nature of these policies.

Section 2: Economic Growth Post-Independence

Fast-forwarding to the post-independence era, the transformation of India’s economic landscape was remarkable. Gaining independence on August 15, 1947, marked the beginning of a new chapter for the nation, one characterized by economic self-reliance and growth.

Data source : “www.macrotrends.net”

This visual representation traced India’s GDP growth from the 1950s to the present day, showcasing the milestones and fluctuations that have shaped our economic trajectory. Interestingly, growth rate has NEVER been above 10%. Before 1991, it used to be at or below 5%, while it is sub-6-8% afterwards. GDP has now grown to around 3385 billion USD at 9041% during last 60 years.

Nehruvian economic policies played a crucial role in shaping the early years of independent India. The adoption of Five-Year Plans aimed at state-led industrialization and planned development was a bold step towards building a self-sustaining economy. I was intrigued by the vision behind these policies and how they set the stage for sectors like heavy industries and infrastructure.

Witnessing the impact of the Green Revolution through pictures that depicted the transformation of agricultural productivity was awe-inspiring. The adoption of high-yielding crop varieties and modern techniques not only alleviated food scarcity but also transformed India into a food surplus nation.

This concise visual summarized the pivotal 1991 economic reforms, which ushered in liberalization and globalization, opening up the Indian economy to foreign investment and trade. The opening up of economy to foreign direct investment (FDI) was start of an era which was pivotal to the rise of Indian economy. A single example to articulate the transformation is to remember how Ambassador ruled Indian automobile sector. How it was same old model Vs current scenarios where way too many options are available and the competition is cut throat.

Similarly from 1992, in addition to FDI reforms, FII reforms gave much needed impetus to Indian economy. No wonder we all regret why didnt our parents invest in Infys, TCSs, Wipros at that time!

The emergence of the IT sector as a global hub for services was another incredible journey. Seeing how this sector transformed India’s economic landscape and brought employment opportunities to countless individuals highlighted the power of innovation and adaptability.

Social Development Progress Chart:

Data source : “www.macrotrends.net”

Visualizing the progress in social development indicators reinforced the idea that economic growth must be accompanied by inclusive policies to ensure a more equitable society. Point in case are Life expectance and Poverty rates which have improved leaps and bound over last 70 years

Reflecting on India’s economic journey, from the pre-independence struggles against exploitation to the post-independence efforts toward self-reliance and growth, fills me with a sense of pride and hope. As we celebrate Independence Day, this exploration into the past reminds us of the importance of sustainable growth, innovation, and the continuous pursuit of economic empowerment.

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