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Evolution of Indian Economy (Why India went for agriculture as PMF (Indian…
Evolution of Indian Economy
Background
Complete distress at a time of independence ; colonial exploitation ; distortion of both agriculture and industry
Social sector was a neglected area by British
India remained the continent of illiterate with the literacy rate only at 17% and with life expectancy 32.5 years of life expectancy at the time of independence
Indian capitalists were also depended on British commercial capital and many sectors of economic was dominated by British firms
National planig committee was set up in 1938
Why India choose to go with agriculture?
India was having the natural resource of fertile land which was fit for cultivation
Human capital did not required any kind of higher training
By only organising our land ownership, irrigation and other inputs to agriculture, India could have gone for better prospects of development
Once there was no crisis of food, shelter, basic healthcare etc. To the masses, one goal have been realised which was welfare of people
Once the masses were able to achieve a level of purchasing capacity, India could have gone for the expansion of industry
Why India went for agriculture as PMF
Indian agriculture was using traditional tools and technology. Its modernisation as well as future mechanization would have been blocked due to the lack of indigenous industrial support
If India had gone for import this would have required enough foreign reserves and a natural dependence on foreign countries
Dominant ideology around the world as well as in the WB & IMF was in the favour of industrialization as a means to faster growth. These international bodies were also supporting the member countries from every point of view to indutrielise
Going for agriculture sector was considered a symbol of
backwardness
and three political leadership wanted to carry India ahead, and not in the backward direction
2nd WW has proved the supremacy of defence power. India too wanted a powerful defence for herself as a deterrent force. So 1. Industry will give faster growth 2.agriculture will be modernise in time 3. The economy will be able to develop ita own defence force
By the time India got her independence the might of industrialization was already proven and there were no doubts regarding its efficacy
Why India went for mixed Economy
At the time of independence India was not only facing the regional disparities but also इंटर regional disparity also prevailed
Mass poverty could only be remedied once the government started the process of economic planning
The Indian capitalists class were not so stable for investing in social sectors
During the Great depression of 1929 and reconstruction challenges after 2nd WW has made experts to conclude in favour of a state intervention in the economy
Indian government did not want to face the situation like
market failure
Why emphasis on public sector?
Infrastructure needs
Industrial needs
Employment generation
Profit and development of the social sector
Rise of private sector