भारतीय अर्थव्यवस्था (1950-1990)

The Planning Commission was established in 1950 under Prime Minister Jawaharlal Nehru, with architect P.C. Mahalanobis designing the Second Five Year Plan (1956–61) based on heavy capital goods industrialization. Every five-year plan balanced four common goals:

1. 1. Growth: Increase in the country's capacity to produce goods and services, measured by sustained growth in Real Gross Domestic Product (GDP).
2. 2. Modernization: Adoption of new technology in production (e.g., modern software, advanced machinery, HYV seeds) and progressive social modernization (e.g., women's equal empowerment in the workforce).
3. 3. Self-Reliance: Avoiding dependence on foreign nations for essential goods (especially food grains and capital machinery), preventing foreign geopolitical interference.
4. 4. Equity: Ensuring that the benefits of economic growth trickled down to poor citizens, reducing the economic disparity between the rich and the poor.

A. Institutional Reforms (Land Reforms):

• Abolition of Intermediaries (Zamindars): Over 200 lakh tenant farmers were brought into direct contact with the government, making the tillers the legal owners of the soil and incentivizing investment.
• Land Ceiling: Fixing the maximum legal limit of land that an individual/family could own; surplus land was acquired by the state and redistributed to landless agricultural laborers (hampered by legal loopholes in several states except Kerala and West Bengal).

B. Technological Reforms (The Green Revolution - Mid-1960s):

The introduction of High Yielding Variety (HYV) Seeds (specifically Mexican dwarf wheat developed by Norman Borlaug), combined with chemical fertilizers, chemical pesticides, and guaranteed canal tubewell irrigation:

• Phase 1 (Mid-1960s to Mid-1970s): Restricted to wheat crops in affluent regions with assured irrigation: Punjab, Haryana, and Western Uttar Pradesh.
• Phase 2 (Mid-1970s to Mid-1980s): Spread to rice crops and other states, achieving nationwide food grain self-sufficiency.
• Marketed Surplus: The portion of agricultural harvest sold in the commercial market by farmers after retaining sufficient food for personal family consumption. Increased marketed surplus enabled the government to build substantial Buffer Stocks in FCI godowns.

The Industrial Policy Resolution 1956 (IPR 1956) formed the bedrock of the Second Five Year Plan, aiming to build a socialist pattern of society:

• Three-Tier Classification of Industries:
  • Schedule A (17 Industries): Reserved exclusively for the Central Government (Defense, Atomic Energy, Heavy Iron & Steel, Railways).
  • Schedule B (12 Industries): Mixed sector where the State would take the initiative to establish new units, while private enterprise would supplement state efforts (Mining, Fertilizers, Aluminum).
  • Schedule C: Remaining consumer industries left open to the private sector.
• Industrial Licensing (The License Raj): No new private factory could be established, expanded, or diversified without obtaining an official government license. Used strategically to promote regional equality by giving tax holidays and easy licenses for backward regions.
• Small Scale Industries (SSI - Karve Committee 1955): The Village and Small Scale Industries Committee emphasized SSIs to promote labor-intensive employment and decentralized regional growth. Specific goods were reserved exclusively for small producers.

During 1950–1990, India adopted an Inward-Looking Trade Strategy known as Import Substitution:

• Core Principle: Replacing imports with domestic production (e.g., instead of importing foreign cars, producing indigenous cars like the Ambassador and Premier Padmini).
• Two Protective Instruments:
  • Tariffs: Imposing heavy customs duties on imported goods to make them prohibitively expensive.
  • Quotas: Specifying the exact maximum physical volume of goods that could be imported into the country.
• Critical Appraisal: Protected infant domestic industries, but bred severe inefficiencies, technological obsolescence, and poor consumer quality due to a complete lack of global competition.