Indian Economy after Independence

The first industrial policy in independent India was formulated in 1948. The National Income Committee was formed on 4 August 1949. The National Income Committee submitted its report in 1951. P.C. Mahalanobis led the formation of the National Income Committee. D.R. Gadgil and V.K.R.V. Rao are the other members of the National Income Committee. 

The leaders of independent India sought alternatives to the extreme forms of capitalism and socialism. An economy with only the features of socialism and without its limitations was devised in India. India is a developing country and our economy is a mixed economy. In a mixed economy, the public sector co-exists with the private sector. India is the fifth largest economies and the third largest economies on the basis of Exchange rate and PPP mode respectively. 

Sectors of Indian Economy

■ Primary Sector - Deals with the obtaining and refining of raw materials. Eg - Agricultural Sector

■ Secondary Sector - Processing of raw materials into finished goods. Eg - Industrial Sector

■ Tertiary Sector - Deals with the services to businesses and consumers. Eg - Banking, Insurance etc.

■ Quaternary Sector - This service sector includes workers in office buildings, elementary schools, university classrooms, hospitals, doctors' offices, theaters, and accounting brokerage firms.

■ Quinary Sector - The Quinary Sector refers to the activities of decision-makers and policymakers at the highest levels. The Quinary Sector includes senior business executives, government officials, research scientists, and financial and legal advisors with specialized job skills that are highly paid.

Basic Features of Indian Economy

1. Low per Capita Income

ii. Low Industrial Growth

iii. Dominance of Agriculture

iv. Rapidly growing Population

v. Chronic unemployment

vi. Lack of Capital

vii. Unbalanced Economic Development

viii. Under utilization of resources

ix. Poor technology

x. Existence of Traditional Society

Economic Planning

Economic Planning is the process in which the limited natural resources are used skilfully so as to achieve the desired goals. The concept of Economic Planning in India is derived from Russia (the then USSR). Planning Commission was established in 1950 as part of Economic Planning. Planning Commission implemented Five-Year Plans of India , which was a series of national development programmes by the Government of India from 1951 to 2017. NITI Aayog (National Institution for Transforming India) replaced Planning Commission in January 1, 2015.

Planning Commission 

The Planning Commission was constituted in India in 1950. It was a non constitutional and advisory body. Jawaharlal Nehru was the first chairman and Gulsarilal Nanda was the first deputy chairman of the Planning Commission. It is headquartered at Yojana Bhavan. The planning commission is only an advisory body according to the 39th article of the constitution. Cabinet Ministers with certain important portfolios acts as part-time members of the commission, while the full-time members are experts of various fields like Economics, Industry, Science and General Administration. The basic aim of economic planning in India is Rapid economic growth through development of agriculture, industry, power, transport and communications and all other sectors. The Planning Commission formulates India's Five Year Plans, among other functions. The Five-Year Plans of India were a series of national development programmes implemented by the Government of India from 1951 to 2017. The format of First Five Year Plan was prepared in 1951 and the last (Twelfth) Five-Year Plan was implemented in 2012–2017.

NITI Aayog

NITI Aayog (National Institution for Transforming India) was set up replacing Planning Commission on January 1, 2015. The Prime Minister will head the NITI Aayog. NITI Aayog is tasked with the role of formulating policies and direction for the government. Its governing council will comprise of the Chief Minister and the Lieutenant Governers of Union Territories. The Prime Minister will appoint the Vice Chairperson and Chief Executive Officer of NITI Aayog. The Aayog will recommend a national agenda including strategic and technical advice on elements of policy and economic matters. It will also develop mechanisms for village level plans and aggregate these progressively at higher levels of government.