Discover more from Rise & Shine ☀
India's Economy in the Last 75 Years
India's GDP stood at 2.7 lakh crore at Independence. 74 years later, it has reached 135.13 lakh crore.
Hi 👋🏻, Welcome to
Every Sunday, an email will arrive in your inbox detailing a specific topic to help you understand it better.
Sign up below for free. 👇🏻
On August 15, India will celebrate its 75th year of independence. In March 2021, the Indian government launched Amrut Mahotsav, a two-year statewide celebration to mark the occasion. Since 1947, India's economic journey has seen its share of ups and downs. India once referred to be a "third world country," a designation for poor developing countries that has since become obsolete, is now one of the world's largest economies. However, India still has a long way to go.
Here's a look at India's economic journey in 8 points:
Food Production: Achieving “self-sufficiency” in food grains has been Independent India's biggest achievement. From receiving food aid in the 1950s and 1960s to becoming a net exporter, India has seen a turnaround in food production. The total food production, which stood at 54.92 million tonnes in 1950, rose to 305.44 million tonnes in 2020-21.
Gross Domestic Product (GDP): India's GDP stood at ₹ 2.7 lakh crore at Independence. 74 years on, it has reached ₹ 135.13 lakh crore. India is now the 6th largest economy in the world and is on its way to becoming the third-largest by 2031, as per Bank of America. An unmissable fact is that there has been a 10- fold increase in the GDP (at constant prices) since the reform process began in 1991.
US dollar to Rupee: Contrary to a popular 2013 forward which had pegged US $1 to ₹ 1, a US dollar was equal to ₹ 3.30 in 1947. Notably, India's rupee was pegged to the UK Pound Sterling, not the US Dollar. In August 2021, US $1 is equal to ₹ 74.
Forex: India's forex reserves (In foreign currencies and other assets like gold) stood at a meager ₹ 1,029 crores in 1950-51. In fact, India's low forex reserves played the catalytical role in kickstarting the economic reforms. With just $1.2 billion worth of forex reserves in 1991, India just had enough reserves to finance 3 weeks of imports. Three decades since the reform process began, India's forex reserves now stand at ₹ 46.17 lakh crore – the world's fifth-largest.
Indian Railways (route length): India already possessed one of the biggest railway lines in the early years of Independence. In Independent India, the Indian Railways has focused on unifying all rail gauges, electrification of railway lines, and connecting northeast India to the mainland. Moreover, the railway line has expanded by over 14,000 kilometers, reaching 67,956 kilometers in route length by 2020.
Roadways (length): Roads have expanded exponentially in the last 75 years. In 1950, as per government figures, India only had 0.4 million kilometers of roadways, which has grown to 6.4 million kilometers in 2021. This is a 16-fold rise in the total length of roadways, making India's road network the second largest in the world.
Access to electricity (rural areas): Providing rural India with access to electricity has been one of the goals of India's socio-economic policymaking. According to the Ministry of Power, only 3,061 villages had access to electricity in 1950. In 2018, the Indian government announced that all of India's villages – 5,97,464 in total – had been electrified. However, given the criteria to declare a village electrified – 10% of households in a village having access to electricity, there are millions who still live without electricity.
Foreign Direct Investment: In the pre-liberalized ‘license raj' India, foreign investment was limited if not non-existent. In 1948, the total foreign investment in India stood at ₹ 256 crores. However, since the 1991 liberalization, FDI has become the buzzword of India's economic story. In 2020-21, India received a record US$ 81.72 billion in Foreign Direct Investment.
A country beginning to consider startups as a new business model
Over the past decade, a number of startups have mushroomed across India as young entrepreneurs experiment with ideas in digital payments, online retail, on-demand delivery, education, software, and more. One of India’s first startups and early unicorns, Flipkart, which was founded by two former Amazon employees in 2007, was valued at over $21 billion when US-based Walmart acquired a 77% stake in 2018. The number of unicorns, or new businesses valued at over $1 billion, has also risen every year. The rise of startups has created a new ecosystem of the angel and venture funding, and incubators and accelerators—as well as new patterns of consumption in society
Thanks for reading😊
Hit 💜, if you enjoyed the article. Liked it? Share it with your friends🤗