Major feature of Indian economy at independence

After nearly 200 years of British influence and rulership, India gained its independence in 1947. The “Mountbatten Plan” (named for the British Viceroy who signed it) divided India into two separate countries: Pakistan and the Union of India. As an underdeveloped country at the time, they were facing a number of economic challenges.

Although the British ruled India, they did so from a distance, never establishing colonies or investing in local industries. This “laissez faire”...

After nearly 200 years of British influence and rulership, India gained its independence in 1947. The “Mountbatten Plan” (named for the British Viceroy who signed it) divided India into two separate countries: Pakistan and the Union of India. As an underdeveloped country at the time, they were facing a number of economic challenges.

Although the British ruled India, they did so from a distance, never establishing colonies or investing in local industries. This “laissez faire” approach (the idea that an economy does best when the government stays out of it) rendered India’s economy stagnant. The population grew far faster than the economy did, leading to widespread unemployment and poverty.

This created classism and a sort of feudal economy, in which farmers and craftsmen (the only major industries at the time) had to work as bonded laborers under the control of a few wealthy citizens.

India has made great strides in their economic growth since they became independent. Over just the past few decades, India has become one of the fastest developing economies in the world.