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date: 28 January 2021

The Indian Economy After Independencelocked

  • Tirthankar RoyTirthankar RoyDepartment of Economic History, London School of Economics and Political Science

Summary

The Indian Union, from the time of independence from British colonial rule, 1947, until now, has undergone shifts in the trajectory of economic change and the political context of economic change. One of these transitions was a ‘green revolution’ in farming that occurred in the 1970s. In the same decade, Indian migration to the Persian Gulf states began to increase. In the 1980s, the government of India seemed to abandon a strategy of economic development that had relied on public investment in heavy industries and encouraged private enterprise in most fields. These shifts did not always follow announced policy, produced deep impact on economic growth and standards of living, and generated new forms of inequality. Therefore, their causes and consequences are matters of discussion and debate. Most discussions and debates form around three larger questions. First, why was there a turnaround in the pace of economic change in the 1980s? The answer lies in a fortuitous rebalancing of the role of openness and private investment in the economy. Second, why did human development lag achievements in income growth after the turnaround? A preoccupation with state-aided industrialization, the essay answers, entailed neglect of infrastructure and human development, and some of that legacy persisted. If the quality of life failed to improve enough, then a third question follows, why did the democratic political system survive at all if it did not equitably distribute the benefits from growth? In answer, the essay discusses studies that question the extent of the failure.

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