write the journey of sector of economy in India since independence
Answers
Explanation:
Since 1951, India has grown as a planned economy. The first few plans focused on growth
with strengthening of the manufacturing sector emphasizing heavy industries to form the
backbone of the economy. Other principal areas of planning were agriculture and social
development i.e. housing and poverty alleviation. Over the years India saw a changing
composition of its economic structure: agriculture which initially comprised of 60% of the
GDP now comprises around 26% and services comprise a massive 75% of the GDP growing
from 30% in the 50s. Landmark changes in 1991 were brought about under pressure from
IMF and World Bank when India was left with foreign exchanges to barely support two
weeks imports. The new era saw delicensing, massive tariff reductions, FDI cap relaxations
and gradual convertibility of the current account followed by the capital account. The
liberalisation process started in the early nineties has seen massive growth especially in the
services sector. India has consistently grown at more than 6% over the last five years and in
terms of sheer GDP PPP currently stands at rank 4 in the world according to latest World
Bank estimates1
. However, when we look at GDP per capita by PPP we rank at 153 according
to the World Bank2
. An estimate of India’s growth story can be made from Chart 1 which
plots the growth rate of the economy over the years. Liberalisation has helped India grow
consistently and boost up its forex reserves through massive inflows of foreign funds boththrough FDI and FII establishing India among the world’s top three most preferred
investment destination