India's Economic Development and Planning

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Questions and Answers

What was the primary goal of the Planning Commission of India?

To establish a socialist economy

To reinforce Gandhian philosophy

To promote privatization

To achieve rapid economic growth with equity and distributive justice (correct)

What was the cornerstone of Nehru's development strategy?

Agricultural development

Liberalization of trade policies

Promotion of cottage industries

Rapid industrialization of the economy (correct)

What was the objective of the Industrial Policy Resolution of 1948?

To expand the public sector and license the private sector (correct)

To allow full privatization of key industries

To promote foreign direct investment

To promote small-scale and cottage industries

What was the outcome of giving undue priority to the public sector?

Dampening of private initiative and enterprise Signup and view all the answers

What was the guiding principle of the Industrial Policy Resolution of 1956?

Expansion of the public sector Signup and view all the answers

What was the role of the state in industrialization according to the bureaucrats and technocrats?

Substantial role Signup and view all the answers

What was the primary focus of Nehru's visualization?

Building a socialistic society with emphasis on heavy industry Signup and view all the answers

What was the outcome of the Industrial Policy Resolution of 1948 on the private sector?

Granting of licenses to the private sector Signup and view all the answers

What was discouraged in India during the early years after independence?

Private investments Signup and view all the answers

What was the average annual rate of growth of GDP in India from 1950 to 1980?

3.5 percent Signup and view all the answers

What was the focus of the first decade and a half after independence?

Capital goods Signup and view all the answers

Why did India face a serious food problem in the late 1960s?

All of the above Signup and view all the answers

What was the strategy for agricultural development until the mid-1960s?

Institutional model Signup and view all the answers

What was given highest priority in the new wave of change in agricultural policies?

Increasing productivity in agriculture Signup and view all the answers

What crisis emerged in 1958 in India?

Balance of payments crisis Signup and view all the answers

When was the comprehensive import control maintained in India?

Until 1966 Signup and view all the answers

Study Notes

Economic Growth and Planning in India

The Planning Commission of India was established to plan for the nation's economic development, following a socialistic strategy through five-year plans.

Industrialization and Development Strategy

Rapid industrialization was the cornerstone of Nehru's development strategy, with a focus on 'planned modernization' and a significant role for the state in industrialization.
The Industrial Policy Resolution (1948) envisioned an expanded role for the public sector and licensing to the private sector, with state monopoly in strategic areas.

Economic Philosophies

Two economic philosophies guided policies in the 1950s: Nehru's visualization of a socialistic society with an emphasis on heavy industry, and Gandhi's philosophy of small-scale and cottage industry and village republics.

Industrial Policy Resolution of 1956

The Industrial Policy Resolution of 1956 provided a comprehensive framework for industrial development, but was lopsided, supporting the expansion of the public sector, which discouraged private initiative and enterprise.

Foreign Investment and Trade Policy

India followed an open foreign investment policy and a relatively open trade policy until the late 1950s, but a balance of payments crisis in 1958 led to a tightening of trade and reduction in investment-licensing.

Economic Growth (1950-80)

India's average annual rate of growth of GDP, known as the 'Hindu growth rate', was a modest 3.5 percent from 1950 to 1980.
The thrust of the first decade and a half was on capital goods, such as dams, power plants, and heavy industrialization, rather than consumer goods.

Shift in Economic Strategy (Mid-1960s)

The first major shift in Indian economic strategy occurred in the mid-1960s, with a greater focus on agricultural development.
Agriculture was not given adequate priority during the second plan, and outlays were reduced, with a reliance on institutional models, such as land reforms and farm cooperatives, which were only modestly successful.

Agricultural Crisis (1966-67)

Consecutive droughts in 1966 and 1967 led to negative growth in the agricultural sector, and India faced a serious food problem, relying on the United States for food aid under PL 480.
The need for a quantum jump in food grain production led to a strategic change in the government's agricultural policies, with increasing productivity in agriculture given the highest priority.

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Description

This quiz explores India's economic growth and development since independence, with a focus on the Planning Commission and its role in implementing five-year plans.