INDEPENDENT India inherited an economy that generated Rupees nine thousand five hundred crore (Rs 9500 crore) as national income at current prices in 1950. India's gross domestic product at current prices on 31 March 2000 according to the advance estimate of the last economic survey (1999-2000) stood at Rupees seventeen lakh sixty six thousand six hundred crore (Rs 17,66,600 crore). Apparently these figures give an impressive picture of economic growth. But India’s net national product of 1950 that gave Rs 9500 crore as national income for that year was evaluated at Rupees forty thousand four hundred fifty four crore (Rs 40454 crore) by 1980-81 prices, measuring an inflation rate of 326% in 30 years, that is, an inflation rate of 10.8% annually for 30 years! The 1980s was the decade of more severe inflation. And inflation offers economic advantages to the propertied class in direct proportion to the size of the assets held. Therefore, deflating by the index of hyper inflation India's economic growth in real terms is reduced to a very moderate figure around 3% annually.
The economic advantages of inflation, induced growth appropriated by the propertied class was amply demonstrated by the report of the Mahalanobis Committee on distribution of Income and levels of living which showed that between 1953-54 and 1956-57 the top 5% in the high income group (HIG) in rural and urban areas received 17% and 26% respectively of total rural/urban incomes and for the top 10% in the HIG the corresponding percentage figures are 25 and 37 respectively. The same top 10% in the HIG in rural and urban areas received 33.6% and 42.2% of respective incomes in 1960. In the three years towards the end of 1950s therefore the share of income flowing to the top 10% of HIG increased by 8.6% for rural and 5.2% for urban incomes. At the other end of the spectrum the share of income distributed among the poorest 20% of rural and
urban groups declined from paltry 9% and 7% of respective incomes to 4% for both groups in 1960. Hence at the time the flow of income was withdrawn from the poorest 20% the share of income flowing to the top 10% of the high income group was augmented. Considering the fact that the rate of inflation steadily intensified between 1960 and 1990 the rich became richer and the poor poorer by leaps and bounds in the last fifty years. Because Japan, Taiwan and South Korea had established a more equitable distribution of assets by 1950, these countries could register gradual decline in income inequality and therefore achieved rapid economic growth. Disregard of equity in the distribution of assets and incomes accompanied by inflation, on the other hand, therefore, halted India's economic growth.
The British possession of India transformed that country that is Great Britain into the biggest colonial power in the nineteenth century AD and into the first half of the twentieth. India was the supplier of cheap raw materials for British industry, a profitable market of British manufactured goods and later a sphere of investment for British capital. The British in India created, by means of an elaborate system of education, law and managing agency in trade and commerce, a comprador class that actually safeguarded British imperialist interests while apparently crying for Indian national interests. A cursory look at India’s foreign trade, especially the balance of trade figures, reveal that trade deficits as a percentage of gross domestic product increased steadily from the first to the current nineth five year plan, that is, for the last fifty years. In foreign trade whatever is deficit for one nation is gain for the others. The pattern and directions of India’s foreign trade make it clear that in the last fifty years of the twentieth century a huge stock of money was siphoned off to imperialist countries and the beneficiaries were the imperialist institutions and their Indian agents. Again, in the last 50 years the Indian collaborators have proliferated manyfold.
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