Indian Economy

In 1970, the real GDP of the Indian Economy (base year 1993-94) was Rs.296278

crores.1 Over the next three decades, the economy grew at an average rate of 4.8 percent,

which led to the real GDP reaching Rs. 1193922 crores by the year 2000. In other words,

there has been a four- fold increase in the real GDP in these three decades. This growth

has not been uniform of course. In fact the seventies could only achieve a poor 3.15

percent rate of growth, while the eighties and the nineties attained a much more healthy

5.63 percent and 5.6 percent respectively. The aggregate growth rates over the last three

decades are presented in Graph I. From this it is clear that in the last two decades, the

Indian economy has broken free from the shackles of the infamous "Hindu Rate of

growth". The distribution of growth has been uneven not only across decades but also

across the various sectors of the economy. The agricultural sector, by far the biggest in

1970, grew at a low average rate of 2.69 percent during the thirty years, while the

industrial and services sector (excluding Public Administration) grew at much higher

rates of 5.61 and 6.24 percent respectively, over the same period. The growth rates for

the agricultural, industrial and services sector over the last three decades are presented in

Graph II, III and IV respectively.

Clearly, the Indian growth experience has been quite varied in these past three decades. The

average growth rate in the post independence period up to the seventies was