India’s per capita income under Nehru Gandhi rule has been a subject of discussion for long because of the economic decisions taken in the period. Indian per-capita income fell by almost 90% during this period between the years of 1947 and 1991. From an independence-time $2,700, it had fallen by 1991 to $300. These economic policies shaped the nation’s future.
The average per capita income under Nehru Gandhi rule saw an average annual growth rate of only 2.58% across different regimes. For example, Jawaharlal Nehru’s economic plan, being a Mahalanobis model, resulted in a meager increase in the per capita income of 2.91%. Though it set India’s ball rolling towards industrialization, critics say it did not pay attention to certain crucial sectors and, therefore, it still remained poor and food prices were very high.
From 1966 to 1977, under first term Indira Gandhi, India’s per capita income under Nehru Gandhi rule slowed to 1.92%. While some aspects of industry moved forward, nationalization and tight controls from the government kept the private sector stifled. Her second term saw the economy improve to 2.74%, but overall economic sickness persisted.
India’s per capita income under Nehru Gandhi rule summary
Like his predecessor, Rajiv Gandhi’s term did not guarantee great economic reforms. India’s per capita income under Nehru Gandhi govt increased only 3.63% during his term, which was less than expected, whereas the low- and middle-income country peers could attain healthy growth rate of 1.75%. The liberalization initiated by Rajiv Gandhi turned out to be in vain as the Indian economy did not gain much pace.
More importantly, post-reforms in 1991 under a leadership outside the Nehru Gandhi family marked a transition. India’s per capita income under Nehru Gandhi govt presents a stark contrast to the 6.21 percent annual growth witnessed during the reign of Manmohan Singh and the 6.32 percent growth witnessed during the governance of Narendra Modi.
The period of slow growth and economic stagnation marked Nehru Gandhi rule over India’s per capita income. In this period, there was more government control and less private sector stimulation in terms of economic policies. This resulted in large losses in terms of potential income. Only after liberalization did the country witness a large-scale recovery, which was in the 1990s.
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