INDIAN ECONOMY 1950 – 1990

CHAPTER – 2 Planning commission set up in 1950 chairperson - Prime minister

Industrial Policy Resolution 1956 (IPR) Salient features

Five year plan • •

Goals: (GEMS) a) b) c) d)

Growth Equity Modernization Self-reliance

•

Industries are classified into 3:

Agriculture

a) Owned by state b) Owned by private sector & public sector c) Owned by private sector

a) Land reforms: Aims to change the ownership of land holding from zamindari to farmers

Small Scale Industry ( SSI)

Fixing the maximum size of land which could be owned by an individual.

• • • •

c) Green revolution (Dr. M.S Swaminathanfather of green revolution)

•

b) Land ceiling

•

•

•

Licensing system for new industries Licensing system for existing industries to expand production Promotion of industries in backward regions

Increase in the production of food grains due to the use of HYV seeds and modern technology, especially for wheat and rice HYV seeds required the use of fertilisers & pesticides in the correct quantities as well as regular supply of water India achieved self-sufficiency in food grains production

d) Subsidies: Good or Bad? Merits Incentive to adopt new technology

Demerits Do not benefit the target group

Help farmers to acquire required inputs

Huge burden on government

Helps to eliminate inequality between poor & rich

Wasteful use of resources

CARVE committee set up in 1955 In 1950 – invest limit was ₹ 5 lakh Now – it is ₹ 1 crore More labour intensive – generate more employment Production of some products were reserved for SSI`s

Trade policy Features 1. Import substitution:- Replacing imports with domestic products 2. Protection of domestic industries from foreign competition through: a) Tariff ( Tax on imported goods) and b) Quotas: specify the quantity of goods which can be imported