On the eve of Independence(1947)
1. Life expectancy = 30 years
2. Literacy level = 18%
3. Poor infrastructure, almost zero industries, dependent on foreign countries for food, famines, poor health infrastructure.
All this was because of colonial brutalities at the hands of British. Organised loot and plunder. India was a supplier of raw materials to British industries and a flourishing market for finished goods of British. Dual strike. India saw its own industrial sectors destroyed at the cost of massive Industrial explosion in Britain.
(1947 - 1990) - Socialist tilt in economic policies by the government
Since, India was already at it low, Indian government ensured protection for local industries from foreign competition by regulation, high tariffs on imports, license permit . A closed economy. Produce in India, by India for India policy. It lead to growth in industrial sectors with many new PSUs established, several new private enterprises also established. Green revolution, White revolution, Planning commission - 5 year plans, setting up of higher degree institutes like IIT, IIM.
Hope was that people will move gradually from agriculture towards industry as new industries will setup. About 70% India used to be in agriculture at the the time independence, it declined to 50% percent till 1990s. Industrial sector did grow but it couldn't absorb all the people coming out of agriculture. Service sector grew dramatically.
1991 reforms - Liberalisation, Privatisation, Globalisation - capitalist tilt
Emphasis was on growth, modernisation, self-reliance and equity. Lack of competition in Indian market led to substandard products, creation of monopolies.
India was facing huge deficit at the time of these reforms. Liberalisation allowed foreign investments, removal of tariffs and quotas on import, reduction in taxation to promote industries setting up in India, moving away from license permit raj. It increased competition for local producers, no protection. Subsidies getting slashed, agriculture sector faced pressure resulting in committing of suicides by farmers in hundreds. Underemployment in agriculture sector. High skills required to work in service sector which 90% India lacks.
Privatisation - government has no business to be in business. selling up of PSUs, reducing government's share in PSUs.
Unfair trade agreements with WTO. India opened their economy, allowed foreign companies to establish in India and trade almost on equal terms with Indians working in India but US didn't relaxed its import restrictions which meant Indian market was open for western countries but western market was not open for Indians to sell their products there.
Jobless growth - Technological advancement, machines doing work of man and man is pushed on streets to die. We witnessed growth in GDP post 1991 reforms but there was meagre improvement in employment opportunities because machines, industries did work which labor use to do. Exploitation.