Question

What kind of economic system did india operate under during 1947-1990? what kind of system is it moving toward today? what are the impediments to completing this transformation?

Answer 1

India in 1947 was characterized by very low per capita income. There were a lot of people, so there was always a big GDP, but per capita income was very low. In some ways India had a fully developed capitalist economy, and it had some of the oldest capitalist institutions in Asia, such as the Bombay Stock Exchange, founded in 1875. So there was a modern economy, but it was very thin. There was a manufacturing sector, but it didn't cover many industries. There was even a steel industry and a relatively strong textile industry, but these were limited. It was predominantly a subsistence economy. Most of the villages at the time didn't even have road connections. They were connected only by tracks to the outside world. They weren't part of the market economy.