India’s economic transformation started with the country building the ‘temples of modern India’ – new steel mills, multi-purpose dams, nuclear power plants, automobile factories, and more – through the early decades. In the 1980s, India liberalised its foreign trade and adopted computerisation and the telecom revolution in right earnest.

The real transformation and take-off started after India shed its initial socialistic policies and adopted its own brand of ‘perestroika’ in the 1990s and brought in more market-friendly policies, inviting foreign investors who collaborated with its own home-grown business tycoons to create new wealth for its masses.

In the 21st century, India made the leap forward to usher in the fourth industrial revolution by embracing what is now termed as ‘New Tech’ — robotics, Artificial Intelligence, digital technology-based industries, and e-commerce — to be among the handful of countries outside North America and Europe, in the race to be at the top.

India’s GDP Story So Far

The Indian economy’s GDP, taking 2011-12 as the base year, increased almost 35 times since 1950-51. From a little below Rs 5 lakh crore in 1950-51, India’s GDP has comfortably crossed the Rs 170 lakh crore mark in 2023-24.

The 1960s and 1970s witnessed a modest decadal growth rate of around 48 per cent, after which the decade of the 1980s saw a considerable dip in the growth of national income at around 34 per cent.

However, the 1990s which saw the ushering in of liberalisation and a new wave of  productivity in the Indian economy, saw the growth drivers charging up.

This is evident in the decadal growth rates in the subsequent three decades. The 1990s and the 2000s were marked by more than 70 per cent decadal growth rates in GDP, before reaching its crescendo in the first decade of the new millennium, at more than 90 per cent.

The speed of the decadal GDP growth rate sobered down subsequently, as can be observed below.

Per Capita Gross National Income 

Per capita GNI (Gross National Income), on the other hand, grew handsomely but at a much moderated rate. The best decadal growth, more than 50 per cent, happened in the first two decades after 2000. The first three years after 2020 (the pandemic years) witnessed more than 23 per cent growth – a commendable story under trying circumstances.

However, the growth in the last three decades was also punctuated by growing evidence of increasing inequality in income within the country.

Sub-Continental Population Boom 

Due to the pandemic, India could not take up its decadal population census exercise in 2021. The projections estimate India’s population at more than 1.4 billion in 2023. The population growth, however, has shown a consistent declining trend in the last six decades, starting in 1960, despite the overall numbers increasing manifold, creating pressures on India’s resources and abilities to create jobs for all.

The population growth was the lowest in the decade since 2010 when India’s millions grew by just 12.6 per cent. Between 1960 and the turn of the century, the population grew by a quarter every decade, making India a billion-strong country.

People Now Live Longer 

An average Indian born in 1960 was expected to live for just 45 years. Since then, life expectancy has gone up manifold, with the bulk of the rapid improvement happening in the 1970s and 1980s. The effort of the government in popularising child vaccination and providing other basic health benefits is visible in these numbers.

The growth in life expectancy considerably slowed down after 2000. This is quite natural as it is difficult to make rapid improvements after average life expectancy crosses the 60-years mark.

In 2020, life expectancy at birth for the total population stood at more than 70 years. It went down a bit after the disastrous two years of the pandemic.

Three-fourths of Indians Are Now Literate

India’s underdeveloped status in 1981 was underlined by a low literacy rate of around 41 per cent. Since then, overall literacy has increased to breach the 76 per cent mark by 2022.

Trends in decadal growth rates show that the most gainful decade in terms of literacy was the decade of the 1990s. The country’s literacy rose by 26.5 per cent in that decade. The government’s aggressive expansion of primary education through programmes like Sarva Shiksha Abhiyan is one of the primary reasons behind it.

Though it looks like the pace of making the population literate slowed down in the early 2000s, the rate picked up, albeit moderately, in the next two decades.

Trade Brings Prosperity

Being a considerably closed economy, Indian exports were modest in the early decades and started pulling up only in the 1980s, when trade liberalisation started. As the economy opened up in 1991 the value of exports burgeoned to new levels. In 2023-24, India’s exports have been valued at more than US$ 437 billion.

On the flip side, imports have also shot up after the 1990s. The new millennium observed a rapid rise in the import bill of the nation. In 2023-24, India’s import value stood at more than US$ 675 billion, a sizeable rise from more than US$ 394 billion in 2020-21.

The rise in international commodity prices, including that of crude oil, contributed in large measure to India’s rising import bill. However, expnding imports is also a sign of an active economy. To fuel its growth story, India imports sizeable amount of machinery and equipment for its factories and plants.

The inevitable result of imports consistently exceeding exports is of course a growing trade deficit. The trade deficit has widened to a substantial US$ 238 billion in 2023-24.

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