Indian Economy after independence


A new era began in India’s history after its independence.

[1] Low level of per capita income

Per capita income is calculated by dividing national income by population.

Income of an individual is a major indicator of his or her standard of living.

Per capita income gives the idea of income earned on an average by an individual in the economy in a year.

India’s per capita income for the year 2009-10 was Rs. 33731.

This comes out to be around Rs 2811 per month.

 

[2] Slow growth of per capita income

India’s per capita income is not only low but also growing very slowly.

Growth refers to increase over time.

 

[3] Heavy population pressure

India’s economy is over populated.

At the time of independence in 1947 the population was 350 million.

According to 2011 census, India’s population stands at 1.21 billion.

It is second only to China in the world and may even over take China in future.

About half of India’s population is in the age group of 0 to 25 years.

Around 78.5 crore out of 121 crore people belong to below 35 years of age.

What does it mean?

Youth are full of energy and strength and expected to perform better as they have the ability to work more.

It also indicates low dependency ratio.

 

[4] Existence of Poverty

Nearly one third of world’s poor live in India.

More than 30 crores of India’s population suffers from poverty which is about 27.5 percent of the total population.

Out of these, more than 22 crores live in rural areas.

The rest live in urban areas i.e. towns and cities.

Among various states of India, Odisha is the most affected by poverty.

Because the percentage of poor people out of its total population is 46 which is highest among all the states.

It is followed by Chhatisgarh, then Bihar.

In terms of number of poor people, UP has the maximum number of poor people.

 

[5] Dependence on Agriculture

In an economy people pursue various activities to earn their livelihood, such as, agriculture, industry and services.

Indian economy has been traditionally based on agriculture.

In 1951, at the beginning of first plan, more than 70 percent of the population were engaged in agriculture and related activities.

Even if this has come down, still around 60 percent of the population is still dependent on agriculture at the beginning of the 21st. century i.e year 2001.

 

[6] Planning for Development

A major feature of Indian economy after independence has been its consistent effort to achieve development through the process of economic planning.

The government of India adopted five year plans beginning with the first five year plan in 1951. The duration of this plan was 1951 to 1956.

In 1950, the Planning Commission was set up with the Prime Minister as its Chairperson.

The era of five year plans had begun.