Introduction

• India got independence on 15 August 1947 and woke up to a new country. The British ruled over India for more than 200 years, and finally, India got independence after much hard work. Now, it was time for the economic development of India. The first union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947
• There are several choices in front of the national planning committee of independent India. They need to decide the most suitable type of economic system which could contribute to the growth and economic development of the country. Also, a system that promotes the welfare of people

Body

• Among all the different economic systems, Jawaharlal Nehru, the first Prime Minister of India, got intrigued by socialism. However, he did not want a similar kind of socialism established in the Soviet Union as his ideologies were way different
• After independence, there was no “private property” culture in India. It was nearly impossible for a democratic country like India to change its land ownership pattern. To solve this issue, the National planning committee of independent India and Nehru decided to think creatively and came up with an extreme version of socialism and capitalism
• While understanding the concept of modified socialism, Nehru and the National planning committee found a reliable answer in an economic system that combined the best features of socialism while eliminating its significant pitfalls
• Through this, India will emerge as an independent and socialist society with a public sector that is strong enough to compete. Lately, the private sector was equally encouraged, which revolutionized Indian culture
• The Directive Principles of the Indian Constitution and the ‘Industrial Policy Resolution’ showcased this outlook
• After three years of independence, in 1950, the Planning Commission was initially established with the Chairperson, Jawaharlal Nehru, the Prime Minister of India. This marked the beginning of the era of five-year plans
• Economic reforms since 1991 were a multidimensional package of various policies that helped in the country’s economic development

Goals of Five Year Plans

• Like all other plans, the National planning committee developed five-year plans to achieve specific goals. These goals include growth, self-reliance, modernization, and equity. These were set as the base; however, there was no compulsion to be equally important in all the listed goals in the five-year plan 
• As India had limited resources, it was a task to prioritize goals based on people’s needs. Each plan was developed to achieve something better for the citizens in India. Also, the first Union Budget was set up
• Apart from this, the National planning committee’s primary point that needs to be remembered was that none of the policies contradict these four critical goals, which were established as the base of the five-year plan

Economic Growth and development

• Growth happens with time. It can be defined as the capacity of a country to produce high-quality goods and services to meet needs. It can be either measured by the productive capital stock or the size of several supporting services, including banking, transport, and so on. In economics, economic growth can be defined as the continuous rise in the GDP or the Gross Domestic Product. The GDP refers to the market value of all the produced goods and services in the country in a year. Economic development refers to change in income, savings, and socio-economic structure of the country. Economic growth and development are significant in economics
• Imagine GDP as a cake. As the size of the cake increases, GDP increases. The larger the cake is, the more people can enjoy it. The same goes for GDP. India is a highly populated country. Therefore it was necessary to produce goods and services in more significant numbers for the masses
• The country’s total GDP is dependent majorly on three sectors, including the industrial sector, agricultural sector, and service sector
• The total GDP of a country includes the contribution made by all three sectors of the economy. However, in countries like India, there can be a situation where one sector contributes more when compared to another

Modernisation

• After independence, people shifted to a new way of living which was way more modernized than before. To boost the production of goods and services, the industry owners started to incorporate new technologies in their production process. For example, farmers began to use high-tech machines rather than using hands which ultimately increased efficiency and contributed to growth 
• Moderation started to take place at a rapid speed. Although the adoption of new technologies is known as modernization; however, it was not only including machines, but considerable changes took place in the social outlook. One significant change was the distribution of equal rights between men and women 
• Before independence and even after it, women were supposed to stay inside, engage in only household work, whereas men were responsible for earning bread for the family. However, modern society said no to this culture. Women started to realize the importance of their dreams and use their talent. Some of the familiar places women were working in were factories, banks, and schools

Self-reliance

• India understood that a nation could only succeed if it knew how to effectively use the available resources and generate more from other developed countries. After the five-year plan, the seven-year plan came into existence which opened the eyes of many and made India understand the significance of self-reliance
• Self-reliance means understanding that what can be produced in our country need not be imported from other nations. This policy emerged as a revolutionary step that empowered India in endless ways. The dependence on foreign countries for essential items such as clothing and food was comparatively low
• This step was necessary as the dependence on imported goods and technology made India’s sovereignty vulnerable

Equity

• Growth, self-reliance, and modernization have brought us a long way and improved many lives
• A country with the best technology, growth potential, and resources still has people living under the poverty line. It was essential for India to make sure that the policies generated and the economic development are empowering the weaker section of the society. Hence, along with growth, self-reliance, and modernization, equity is equally important

Conclusion

India got independence on 15 August 1947 and woke up to a new country. The British ruled over India for more than 200 years, and finally, India got independence after much hard work. Now, it was time for the economic development of India. The first union budget of independent India was presented by R. K. Shanmukham Chetty on 26 November 1947.Growth happens with time. It can be defined as the capacity of a country to produce high-quality goods and services to meet needs. It can be either measured by the productive capital stock or the size of several supporting services, including banking, transport, and so on. In economics, economic growth can be defined as the continuous rise in the GDP or the Gross Domestic Product. India understood that a nation could only succeed if it knew how to effectively use the available resources and generate more from other developed countries. After the five-year plan, the seven-year plan came into existence which opened the eyes of many and made India understand the significance of self-reliance.