After gaining independence, India embarked on a mixed economy model, prioritizing self-reliance and industrialization to reduce import dependence. Key industries were under public control, while the private sector faced state regulations. Trade barriers and the ‘license raj’ stifled personal growth and led to inefficient public enterprises—the Planning Commission’s five-year plans aimed to allocate resources for centralized development.
Agriculture initially dominated, but the Green and White Revolutions transformed productivity and self-sufficiency in food and dairy. Industrialization had mixed success, emphasizing public enterprises and heavy industries, often leading to inefficiencies. Economic crises and protectionist policies hampered growth, resulting in a modest annual average growth of 3.5%, known as the “Hind rate of growth.”
The collapse of the Soviet Union and Gulf War-induced oil shocks triggered a balance of payments crisis in 1990. India sought an IMF bailout, which prompted the introduction of the New Economic Policy in 1991. This liberalized the economy, privatized public enterprises, and opened it to globalization. The Industrial Policy 1991 dismantled licensing, encouraged private sector participation, and triggered rapid growth.
Reforms led to average growth of 6.5% from 1992 to 2020. The automotive, pharmaceutical, and IT sectors thrived. Welfare programs, including the NFSA, MGNREGA, PMJDY, and PMUY, aimed to provide security. Skill development projects and Make in India sought to boost manufacturing and innovation. The Atmanirbhar Bharat Abhiyan stimulated domestic production.
However, challenges such as inequality, fiscal deficits, and environmental concerns persist. Policy reforms like GST, the Insolvency and Bankruptcy Code, and Ease of Doing Business are aimed at inclusive growth. With a youthful population, soft power, innovation potential, and global influence, India aspires to be a world economic leader, promoting peace and prosperity. As India nears its 77th year of independence, it inches closer to its vision of a $5 trillion economy.
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