Indian Economic Policy, Employment, Labour and Related Outcomes

Three Phases: Phase I

In the years before Independence, the Indian economy had remained more or less stagnant. Per-capita income actually declined by 0.22 per cent per year from 1913 to 1950. After Independence, during the first phase, the state was the prime mover of growth; public sector enterprises provided the big push. This state-led growth laid the foundation for technological change, and created a pool of technical and scientific manpower. This broke the long years of structural stagnation during the 1930s. The annual GDP growth rate rose to 3.5 per cent in the 1970s. During this period, the state was characterised by Kalecki as an intermediate regime – neither wholly capitalistic nor wholly socialist. The underlying question was: could an intermediate regime endure? The answer, in India, turned out to be ‘no’.