The Phases of Indian Economy

Indian economy has been very different from any other country; it’s one of main reasons why it’s considered one of the biggest and impacting economies in the world. It can be divided mainly into 3 phases after independence in 1947. This is the big picture, which explains the market and growth of BHEL.

Phase I (1947 – 1966)-

India bestowed upon Jawaharlal Nehru to be the 1st prime minister of India with Dr. Rajendra Prasad, the 1st President. Mr. Nehru believed that India needed a change and should grow for which India had to change from agricultural to an industrial economy. He knew that investments wouldn’t be made by private companies and therefore started Central Public Sector Units (CPSUs), and the government invested in it. This is how BHEL, NTPC, ITI (telecom), NPC came into being, improving the standard of living and per capita income of India.

Though now some companies have vanished like ITI since they didn’t change with time, which is required to stay in a competitive market like the present. But was a definite great kick-start for a new independent economy.

Phase II (1966 – 1991)-

Indira Gandhi was stated as the prime minister and she strongly believed in a socialist economy. The government started taking over all the big and small companies and made all sectors public. This described the economy in 3 words –

PRIVATIZATION

LICENSE                                 } All this led to a SELLER’S MARKET

PROTECTED 

Companies were flourishing and there was boundary for growth, which resulted in GDP growth of only 2-3% and Below Poverty Line (BPL) percent to be 40%.

Phase III (1991 – present)-

The new Prime Minister, Mr. Narsimha Rao along with the finance minister Mr. Manmohan Singh (present Prime Minister) realized the need to change the economy urgently and have new reforms. Thus the economy was shifted from the old one to having these new features – 

PRIVATIZATION

GLOBALIZATION               } This created a shift to BUYERS MARKET

INDEPENDENT

Many industries started coming up, export-import business and trade created boom in the economy and foreign countries started investing in the ever growing consumer market of India. This generated GDP growth of 9% and the plan is to reach 10%. BPL fell to 23% but of course the dream is 0%.

In the present recession across the world, BHEL was able to not only sustain the hit but also managed to have a growth of over 20%. This is the big picture of the Indian economy.