How has India’s GDP growth fared since Independence?

In 1950-51, the GDP of India was Rs. 2.80 Lakh Crore (@ Constant 2004-05 prices). Currently, the size of GDP is close to 60 Lakh Crore. From independence till 1991, Indian economy was a socialism inspired economy with capitalistic elements within in.  The average growth rate of GDP remained around 3% from 1950s to 1980s. This was a period of slow economic growth and is generally called “Socialist Rate of Growth” and also “Hindu Rate of Growth”. The term Hindu Rate of Growth for India’s slow rate of growth was given by an Indian Economist Professor Rajkrishna in 1978. He gave India’s socialist policies as reason for Hindu Rate of Growth. During this period, while South Korea grew by 10%, Taiwan grew by 12%. The reasons for low growth are as follows:

• In 1947, the newly born India was a shattered economy with minimal literacy and humongous poverty.
• The country immediately faced refugee problems and a war with Pakistan over Kashmir. Partition divided India’s complimentary economic zones thus increasing problems.
• The largest share of taxes before Independence came from farming, it slowly declined as a fraction of total revenue but growth in revenue was small.
• India faced severe shortage of food grains and had major budget deficits.

Once admonished for its “Hindu rate of growth”, India remained the second fastest growing economy in the world, behind China from 1991 until 2015. Between 2005 and 2008, Indian economy clocked the 9% mark annually. After the current government revised the GDP growth figures and China slowing down, India is now being billed as the fastest growing major economy in the world, with a growth rate of 7.6% in 2015-16.