Since Independence, India has achieved tremendous progress in raising growth, income levels and standards of living. India’s development journey over the  years has been marked by significant milestones and reforms that enabled it to achieve substantial progress in many areas including rise in income levels, growth, literacy, life expectancy and a wide variety of other economic indicators. Ldet’s look back at some of the significant achievements of our economy over the years.

Incomes expand

Since 1947, India has achieved tremendous progress in raising growth, income levels and standards of living. The gross domestic product (GDP) increased from Rs 2,939 billion during 1950-51 to Rs 56,330 billion during 2011-12 (2004-05 constant prices). In 2018-19, India’s GDP was valued at an estimated Rs 1,40,776 billion (2011-12 constant prices).

At the same time, the average Indian citizen earned an income of just around Rs 7,513 during 1950-51 which increased to Rs 41,255 during 2011-12 (2004-05 constant prices) and further to Rs 92,565 during 2018-19 (2011-12 constant prices). The per capita income increased in real terms despite a significant increase in the population of the country.

Agriculture and allied sectors boom

The agricultural sector continues to be an important sector in the Indian economy and generates livelihood for more than half the population. The real gross value added by the agriculture, forestry and allied sectors went up from around Rs 1,502 billion in 1950-51 to around Rs 22,263 billion as per the 2011-12 calculations.

The advent of the Green Revolution during the 1960s was a game-changer for the country. It saw the adoption of modern technology and methods to produce high yield variety seeds, that significantly raised agricultural productivity and increased foodgrain production.

The net production of foodgrains in India increased from around 48 million tonnes during the 50s to a massive 241 million tonnes during 2017. India continues to be one of the largest producers of rice, wheat and various fruits and vegetables in the world and is also the leader in milk production.

Industry diversifies

India has also made significant strides in terms of industrial development since Independence. The Industrial Policy of 1991 constituted a major economic reform and was introduced to reinvigorate the industrial sector. The policy dismantled the system of industrial licensing and opened the sector for greater private sector participation as well as foreign investment.

In terms of real gross value added, manufacturing, construction and electricity, gas and water supply sector stood at around Rs 401 billion during 1950-51. Presently, the sector is valued at around Rs 36,684 billion (2011-12 series).

Many sectors gained pace in the manufacturing scenario. From just 3 automobile companies, the automotive sector attracted global multinationals and built up a range of products of global quality standards. In pharmaceuticals, India is now a major producer and undertakes research to develop new drugs. Engineering and electrical machinery goods have evolved to global benchmarks as well.

In services, new sectors such as Information Technology and telecommunications have transformed the landscape, creating new opportunities such as e-commerce and startups. India’s IT skills are renowned the world over.

Conventional services industries have also expanded, with financial services, tourism and hospitality, and retail changing in multiple ways, adapting to technology and gaining share in the economy. The real gross value added for the services sector comprising of trade, hotels, transport and communications increased from around Rs 308 billion during 1950-51 to Rs 14,023 billion during 2011-12 (2004-05 series) and is estimated at around Rs 24,711 billion during 2018-19 (2011-12 series).

Building India

India has also made significant headway in infrastructure and has worked over the years to establish a robust transport network. The length of roads increased from around 0.4 million km during the 1950s to around 5.9 million km post 2016-17.

Length of national and state highways have also increased substantially while the number of registered vehicles has gone up from 0.31 million during 1950-51 to around 253 million during 2016-17. Civil aviation has also witnessed immense growth, with number of passengers increasing from only 10.74 million during 1980-81 to an estimated 345 million during 2018-19.

India’s power sector has also diversified significantly and made substantial progress since Independence. The total energy generated by the hydro, thermal and nuclear sectors increased from only 5.1 billion KWH during 1950-51 to 1,303.5 billion KWH during 2017-18. India’s installed plant capacity went up from a mere 2.3 thousand MW during 1950-51 to 399 thousand MW as of 2017-18.

Converging with the world

The process of liberalization that was started during the mid-1980s to make the Indian economy more open to trade and external flows gained pace during the 1990s. The objective was to improve the efficiency of the Indian economy through reduction in trade barriers such as import tariffs.

Today, India has developed a significant footprint in the global economy. The value of exports of goods and services stood at just around USD 0.1 billion during 1950-51 while merchandise exports was valued at USD 330 billion in 2018-19. In services exports, India has emerged as the top exporter of IT services.

Development progresses

India has also come a long way in terms of improving its human development indicators. Literacy rates have increased significantly, from 18.3% during 1950s to 52% during 1990s to 73% during 2011.

This has been accompanied by major improvements in other socio-economic indicators such as increase in the gross enrollment ratios in school and rise in the number of recognized educational institutes in the country, among others.

Households’ access to safe drinking water at the all-India level improved from 81.4% during 1991 to 91.4% during 2011. In healthcare, the advent of sophisticated and modern technology has led to reduced prevalence of diseases and increased longevity.

Indian economy to grow at 11.5% in 2021

The International Monetary Fund has projected an 11.5% growth rate for India’s economy in 2021, in its World Economic Outlook report for January. The body estimated that India’s economy contracted by 8% in 2020. The figure is a positive revision of its estimate in October 2020, when it had predicted that the growth rate will shrink by 10.3%.

The IMF report suggested that India will be the only major economy to register a double-digit growth this year, followed by China, which is expected to grow by 8.1% in 2021. However, China grew by 2.3% in 2020, according to the IMF data, making it the only major economy to record positive growth. China thus has a higher base for year-on-year GDP growth rate calculation.

In the report, IMF estimated a global contraction of 3.5% in 2020, an improvement of 0.9 percentage points from the 4.4% slump predicted in October, reflecting stronger-than-expected momentum in the second half of 2020. It predicted global growth of 5.5% in 2021, an increase of 0.3 percentage points from the October forecast, citing expectations of a vaccine-powered uptick later in the year and added policy support in the United States, Japan and a few other large economies.

Earlier on Tuesday, a separate report released by the United Nations Department of Economic and Social Affairs, estimated India’s economy contract by 9.6% in 2020, while it is projected to grow at 7.3% in 2021.

Last month, government data for the first advance estimates of this fiscal, projected India’s economy to contract by 7.7% in real terms. However, that projection was for the financial year (April 2020-March 2021), whereas the IMF and UN estimates are for the calendar year (January 2020 – December 2020).

India’s Gross Domestic Product growth rate had contracted by 7.5% in the second quarter (July-September), after shrinking by an unprecedented 23.9% in the first three month period (April-June) of the financial year. The Reserve Bank of India has predicted economy to register positive growth in the third quarter (October-December).