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Trends in NNP

The real national income of India has increased at an annual average rate of 4.9% during last 60 years of economic planning. There are two distinctive phases of economic growth in India since independence i.e., 1950-80 and 1980-2010. During 1950-80, growth in GDP was 3.2% and during 1980-2010, the growth in GDP was 6.6% p.a. If we consider the period between 1991-92 and 2009-10, GDP growth rate has increased to 7.3% p.a.
The reasons for very poor performance of the economy during 1950-80 are:
  • Colonial past
  • Restrictive trade policy
  • Licensing system
  • Inward looking of foreign policies
  • Excessive stress on public sector and socialistic society
  • Anti-market and anti-competition attitude of the state
Acceleration of the economic growth since 1980 was due to:
  • Well-developed social and legal framework
  • Improvised higher education system
  • Better infrastructural facilities
  • Progress in science and technology
Economic growth slowed down in 2008-09 to 6.7% due to the global financial crisis and consequent economic recession in developed economies. This was spread across almost all the sectors. The economy grew at 8.6% in 2009-10 and at 9.3% in 2010- 11. India is among the top ten fastest growing countries in the world along with China, Vietnam, South Korea, Malaysia, Thailand and Singapore among others.
Growth rate in National Income
1st 5 Year Plan
2nd 5 Year Plan
3rd 5 Year Plan
4th 5 Year Plan
5th 5 Year Plan
6th 5 Year Plan
7th 5 Year Plan
8th 5 Year Plan
9th % Year Plan
10th 5 Year Plan
7.6% (3.8%, 9.0%, 7.8%, 9% and 9.2% each year respectively)
11th % Year Plan
The approach paper to the 11th plan keeps a target of 7.8% p.a. as the growth rate.

Trends in per capital income

India’s per capita net national product during the 6 decades of planning has increased at a rate of 3% p.a. The per capita income increased at a modest rate of about 1.8% and 2.0% respectively during the 1st and 2nd plans respectively. Due to droughts during the 3rd plan, the per capita income was almost 0%. During the 4th and 5th plans, the per capita income grew at the rate of 1.5% and 2.7% p.a. respectively. During 1979-80, it fell to about 8.3%. During the 6th and 7th plans, the per capita income recorded a growth of 3.2% and 3.6% p.a. respectively. In the 8th and 9th plans, the per capita income witnessed a growth rate of 4.5% and 3.3% p.a. respectively. In the 10th plan, per capita income growth accelerated to 6.1% p.a.
Economic reforsm undertaken since 1991, contributed to the rapid growth of P.C.I. during 1991-2010, the P.C.I. has grown at 5.3% per annum. During 11th Five Year Plan P.C.I. has increased at 6.3% per annum.

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