Government Policies for Business Growth

Post Independence Public Policy

Around the seventeenth and the eighteenth century, India was known worldwide for its immense wealth. ‘Golden Sparrow’ was one of our countries nick-names; such was our position. We were a very wealthy nation, having an abundance of valuable natural resources. However, post-colonization the scenario changed completely. And the new republic of India after independence in 1947 faced huge challenges with respect to their economy. Let us take a look at the post-independence public policy.

Suggested Videos

previous arrow
next arrow
previous arrownext arrow


Post-Independence Public Policy

After independence in 1947, the Indian economy was in a very poor state, it was at a stage of complete stagnation. Nearly half the population at that time was below the poverty line. And two-thirds of the population was entirely dependent on agriculture for their livelihood. So it can be said the entire economy was dependent on agriculture. In fact, only 2% of the population was employed by industries.

To sum up the problems at the time, they were

  • Rampant poverty
  • overdependence on agriculture
  • practically no industrialization
  • very low national income
  • high unemployment
  • a stagnant economy and very slow economic progress

Browse more Topics under Government Policies For Business Growth

India – A Mixed Economy

One of the biggest post-independence policy decision was to determine the type of economy India would be. At the time of independence, there were two opposing economic policies reigning in the world. One was the capitalist method that the USA follows.

Here the model was a strong private sector and freedom to privately own resources and property. Russia follows the other method, the socialist method. Here the focus was on state ownership of all resources and strict rules and oversight.

Post Independence Public Policy

India then decided to follow the Mixed Economy method. It borrowed philosophies from both the other systems to create a mixed economy system that suited it the best. Like while private companies were encouraged, the state kept most big industries for themselves.

This meant it could provide its citizens with basic necessities (Power, transportation, etc) at lower costs. The government also strongly discouraged imports, so we could grow our own domestic manufacturing sector.

Planning Commission

One of the important post-independence public policy was the formation of the planning commission. The main function of the planning commission was to asses our economy and accordingly formulate Five Year plans.

The Five Year plans were policy directives and became a major source for laws and regulations passed in years. The commission passed regulation policies as well as promotion policies for the economy.

Social Policies

The government was not only concerned with the economic policies, but a lot of focus was only on social post-independence public policy. There was a need for some major changes in the socio-economic scenario of our country after independence.

There were external threats to our country’s security at the time. So the defense policy has to be very strong. There was also internal conflicts and regionalism, casteism and some communal discord. The government had to promote unity and national integrity via public policy to counter separatist tendencies.

There have been times when public policies have been in contradiction with each other. A policy that may be beneficial to the economy, may have a negative impact on the national integrity of the country. So the actual impact of the post-independence public policy must be ascertained before implementing it.

Solved Question on Post Independence Public Policy

Q: The Planning Commission was replaced by _____

  1. Ministry of Finance
  2. MoS of Finance
  3. NITI Upyog
  4. None of the above

Ans: The correct answer is option C. NITI Upyog now carries out the functions of economic planning of the country. Hence, with this, we conclude our discussion on the topic – Post Independence Public Policy.

Share with friends

Customize your course in 30 seconds

Which class are you in?
Get ready for all-new Live Classes!
Now learn Live with India's best teachers. Join courses with the best schedule and enjoy fun and interactive classes.
Ashhar Firdausi
IIT Roorkee
Dr. Nazma Shaik
Gaurav Tiwari
Get Started

One response to “Economic Change Process of India”

  1. Kamya Treasure says:

    Good work and simplified for easy understanding😃

Leave a Reply

Your email address will not be published. Required fields are marked *

Download the App

Watch lectures, practise questions and take tests on the go.

Customize your course in 30 seconds

No thanks.