India. Policy Decision Analysis Brief

Abstract

Economic growth in the Indian economy after independence in 1947 passed through three phases. From 1948 to 1950, the focus of economic policy was on recovering from the dislocations caused by independence from Britain and the partition of India into two states. The first Five Year Plan for economic development was launched in 1951 and the first phase of Indian economic growth started in that year: from 1951 to 1981, real GDP grew at an average rate of 3.5 percent p.a., the “Hindu rate of growth” as Prof Raj Krishna memorably characterised it. From 1981 to 2003, the growth rate of real GDP increased to 5.5 percent following the introduction of economic reforms in the 1980s, followed by another wave of reforms in 1991-92. The third phase of Indian economic growth began in 2004, since when the growth rate of real GDP has averaged 8.3 percent p.a.