Chapter 19
Economic Progress 1947-56

THE first two or three years after the transfer of power were discouraging for those who had hoped for an immediate spurt in economic activity. The slump in industrial production, which had begun in 1946, became even more marked in the first year of independence. A partial revival in 1948 was followed by further deterioration in the two following years and pessimists began to believe that the expansionist spirit of pre-independence days had already evaporated. This gloomy view failed to take account of the temporary nature of some of the factors which had retarded development, chief amongst which were the break-down of law and order over a wide area in 1947, the dislocation of trade resulting from partition, the economic war betwen India and Pakistan in 1949 and the uncertainty of Indian business men at that time as to the future economic policy of the Government of India.

By 1951, some of these adverse factors had disappeared or diminished in strength, and at the same time the Government of India set itself to work not only to increase the tempo of development, but also to direct it into the channels which would be most profitable to the nation as a whole. National planning began to be accepted as the sure foundation of prosperity, and ambitious targets for increasing production and for raising the standard of living were fixed by the Planning Commission. Whatever may have been the purely economic value of the Plan, its psychological impact was tremendous. Once again Indians began to believe that the burden of poverty could be lifted, and in the pursuit of this aim a new spirit of co-operation between the public and the Government was born. That spirit has produced striking results and it is impossible to travel round India to-day without feeling that the country has entered a new, dynamic phase. In the towns, industrial progress is sometimes overshadowed by the


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