India's Development Story; 1947-55

India Fact File: India’s Socio-Economic and Political Story: 1947-1955

The Indian development story is of much interest to all students of history because it charts the evolution of the first post colonial power in the developing world finding its feet economically. Many of the lessons learned by India and implemented (albeit imperfectly) are being watched worldwide. 

While this series has been developed for the 50 percent of India's population that is below the age of 25 and preparing for life, it has value for us all.

Independent India’s first Cabinet:

Jawaharlal Nehru: Prime Minister; External Affairs and Commonwealth Relations; Scientific Research.
Sardar Vallabhbhai Patel: Home; Information and Broadcasting; States.
Dr Rajendra Prasad: Food and agriculture.
Maulana Abul Kalam Azad: Education.
Dr John Matthai: Railways and Transport.
Sardar Baldev Singh: Defence.
Shri Jagjivan Ram: Labour.
Mr C.H. Bhabha: Commerce.
Mr Rafi Ahmad Kidwai: Communications.
Rajkumari Amrit Kaur: Health.
Dr B.R Ambedkar: Law.
Shri R.K. Shanmukham Chetty: Finance.
Dr. Syama Prasad Mookerji: Industries and Supplies.
Shri N. V. Gadgit: Works, Mines and Power.

Economic fallout of partition: Post partition, India lost 33% of its irrigated land to Pakistan. Among partition’s challenges were the facts that irrigation works, jute, wheat and cotton cultivation were in Pakistan. The mills were however located in India.

Steps taken to stabilize the nation’s economy: The Reserve Bank of India (RBI) was nationalized in 1948. The development of new irrigation facilities increased the area of cultivatable land. The Banking Regulation Act of 1949 laid the foundations of the Indian banking system. The Act required banks operating in India to maintain a reserve fund with the RBI and keep 20% of all disclosed profits in the reserve fund

Violent spasms attend the birth of the Indian Nation: 
On August 15th, 1947 India was led by an interim government with Nehru as Prime Minister. The aftermath of partition was the first challenge (some 500,000 people1 died in 1947 in the carnage.

-         In 1947, India also had to fight its first war with Pakistan after Pakistani tribesmen supported by their army invade Kashmir.

-         In September and October 1948 according to the unpublished Pandit Sunderlal Report, as many as 40,000 people *1 died in the “police action” into the princely state of Hyderabad that brought Hyderabad into the Indian union.

-         In 1949, the Constituent Assembly adopts Article 370, ensuring special status and internal autonomy for Jammu & Kashmir.

-         1950: The Constituent Assembly ratifies the Indian Constitution on January 26.

-         1950-1955: The first five year plan is launched.

-         In 1952, India holds its first general elections.

-         1954: Jammu and Kashmir’s accession to India is ratified by the state’s constituent assembly.
Economic Growth: Pre and Post-Independence *2

                          1900-1950,1950-80, 1891-1990,1992-2000
India GDP Growth      0.8            3.5        5.6              6.2
Per Capita Growth       0              1.3         3.5             4.4
Today planners prefer GNP data which is GDP + foreign income
(If you are using a cell phone, view horizontally please)

Free India’s Economic Development and the First Five Year Plan Goals:
-         To correct the imbalances caused by the war and partition.
-         Begin a process of all-round development to ensure growing national income and a steady improvement in living standards.
-         Bring about development progressively and by democratic methods.

First five-year plan: Amount spent: Rs. 1, 960 crores of which 1,560 was investment. Private sector investment also provided another 1,800 crores *3.
Of the 1, 960 crores spent: Agriculture and irrigation were top priority, transport and communications second, social services third, then power and finally industry.

-         Rs. 601 crores (31%) went to agriculture (community projects & irrigation incl.)
-         Rs. 523 crores (27%) to transport and communications;
-         Rs. 459 crores (23%) to social services;
-         Rs. 260 crores or (13%) to power and only
-         Rs. 117 crores i.e. (6%) to industry including village and small industries.

Achievements attributed by the government to the first plan (even though there were actually a variety of other factors):

-         National Income increased by about 18%; per capita income by 11% and per capita consumption by about 8%. As a result of various development programs, the rate of investment went up from 5% in year one to 7.3% of National Income in the last plan year. Money supply increased. Prices fell.

-         In agriculture, production went up by 17%. Food grains by 20%; cotton and oil seeds by 45% and 8% respectively while raw jute production went up by 27%.

-         Irrigated area increased by 31%, over 16 million acres were irrigated.

-         National Extension services (started 1952, covered 25% of India by 1955-56).

-         Efforts for the abolition of the zamindari system which inhibited agricultural growth were undertaken. Reform of tenancy legislation helped that segment.

-         Industrial production rose by 39% (bicycles by a whopping 500 percent!)

-         Units set up for oil-refining, ship/aircraft/rail wagons, penicillin & D.D.T.

-         Public sector units such as the Sindri Fertilizer Factory, Chittranjan Locomotive Works, the Indian Telephone Industry, and the Integral Coach Factory were set up or progressed. The proposed Iron and Steel Plant and the Heavy Electrical Equipment Plant could not be commenced during the Plan.

-         Road mileage increased by 10 % 430 miles of rail lines restored; 380 miles of new lines laid and 46 miles of narrow gauge converted into metre gauge.

In the words of Gurcharan Das, writing about Indian economic growth:
As a benchmark, recall that the West's industrial revolution took place at a 3 percent GDP growth and 1.1 percent per capita income growth after 1820. To appreciate the magnitude of the Indian change after 1980, let me illustrate: If India's per capita GDP had continued growing at the pre-1980 level, then its income would have reached present American capita income levels only by 2250; but if it continues to grow at the post-1980 rate then it will reach those levels by 2066: a gain of 184 years!

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