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Chapter 9: Economic
Development:
Section 3
Lesson Questions
What economic goals did Nehru set for
India?
 What progress has Indian industry made?
 How has India tried to increase farm
output?

Economic Goals
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In year 1947 A.D., India’s economy was undeveloped
and it had to import machinery and finished goods from
industrialized nations
Nehru (leader of India 1945 -1966) aimed to modernize
the country
He used many socialist principles and tried to limit
foreign investment
India’s mixed economy had some government industries
such as steel, mining, transportation, and energy
It also included private consumer businesses such as
bicycles, sewing machines, and hand tools
Nehru
Industrial Growth
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To lessen dependence on developed nations, India’s
people needed to produce basic materials such as steel,
plastics, and capital goods needed for factory production
Money was invested from cash crops and taxes
Nehru referred to hydroelectric plants and steel factories,
as “India’s new temples.”
After independence, iron ore output tripled
Energy doubled, and coal/steel production rose
By 1960, India was ranked sixth as one of the world’s
most industrialized countries (today it is ranked 12th in
GDP)
GDP - total amount of goods and services in a country
1970, production dropped due to world oil prices, like
most industrialized countries a rise in oil burdens India’s
economy
Economic Reforms
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India’s government ran many industries, however an
economic slow down meant moving toward privatization
State-owned industries were sold to private investors
Instead of total foreign investment, they set up joint
projects
In the 1990s, the Indian government allowed more
foreign investment which led to a financial boom
High-technology industries grew such as computer
software industries
Despite growing amount of jobs, rapid population growth
meant that unemployment was always a problem (US
has roughly 4.4%, India around 9.9%)
Progress in Agriculture
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¾ of Indians live in rural areas, and most are
subsistence farmers
In the 1940s, India could not feed its population. It also
had poor soil and outdated farming methods. Droughts
even made matters worse.
Despite monsoons, some areas do not get rain for 6-8
months; irrigation systems became a priority of the new
government
Dams, canals, and wells coupled with the new irrigation
systems allowed for better water control. Farmers could
now plant a second, “dry-season” crop as well.
The building of dams have become controversial for
environmentalists because they disturb the ecosystems.
Land Reform
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Only a few had large land
holdings, whereas most lived
on small plots of land
Some people had no land at all
and worked as tenant farmers
People sharecropped, which
meant they gave their landlord
a portion of their harvest
The government wanted to
redistribute land but it had little
affect
Landowners controlled
enforcement of policies and
hardly anyone could raise
enough money to buy land
The government tried to
implement a 25% tax of
sharecropping but it failed as
well
Green Revolution
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1960s- 1970s, new technology improved food
output
Scientists developed “miracle crops” through
improved wheat and rice seeds
Farmers have trouble yielding crops because
they cannot afford proper equipment, irrigation,
and fertilizer
Food is sometimes produced enough to be
exported
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