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The division of what was formerly British India into two distinct political units had disastrous consequences for the subcontinent’s economy. The area of ​​maximum jute production, which is located in eastern Bengal, went to Pakistan, while the factories for the processing of jute itself remained in India (Calcutta); similarly the territories where the greatest cotton plantations are went to Pakistan, while the centers where the cotton mills are (Bombay, Ahmedābād) remained to India. No less serious was the loss of the western Panjab (which went to Pakistan) which deprived India of what was the granary of the whole subcontinent. The situation was aggravated by the problem of refugees (some millions) from the regions assigned to Pakistan (West Panjab and East Bengal),

According to Topschoolsintheusa, this critical period of adjustment lasted from 1947 to 1950. In 1951, with the entry into operation of the first five-year plan (1951-56), the situation gradually began to improve. More than a real plan, it was actually a set of various projects, some of which had already been drawn up before independence from a specific office. Expected expenditure was approximately $ 5 billion, of which $ 1 billion 169.7 million for transport and communications, $ 749.7 million for agriculture and rural communities, $ 842.1 million for hydraulic and irrigation works; $ 1 billion 119.3 million for social services, housing, refurbishment works; 546 million dollars for electricity; 375.9 million for industries and mines; 144.9 million for various works. 40% of the funds were allocated to agriculture and related works (irrigation, electricity), which can be explained since agriculture still remains the main economic resource of the country, and that its production is barely able to keep pace with the increase of the population which is 4.5 million units per year. Among the works for the control and exploitation of the waters of the great rivers, undertaken, developed or carried out with the first five-year plan, we should mention the Hirakud dam in Bihar, the Damodar valley project in West Bengal (Bokaro, Tilajya, Konar, Maithon, Pancet Hill dams), the Tuṅgabhadra dam in Andhra Pradesh, and the Bhakra channel in Panjab (v.bhakra, channel, in this App.).

The plan was undoubtedly successful and in the five years the national income grew by 18% while the population grew by 6%; individual annual income rose from $ 53.34 to $ 59.01. The production of foodstuffs was 5 million tonnes higher than expected and made it possible to reduce the expenses for the importation of food from abroad which nevertheless remain heavy for the Indian budget. About 16 million acres of land benefited from some form of irrigation, the production of consumer goods and raw materials increased by 34% and that of electricity by 70%. The expenses were covered by tax revenues, income from productive capital, aid from abroad;

In 1956 a second five-year plan was launched, which will have to end in 1961, for which a total expenditure of 48 billion rupees (equal to approximately 624 billion Italian lire) has been foreseen, divided as follows: 13 billion 850 million for transport and communications; 10 billion 540 million for agriculture, rural community development, irrigation and flood control; 9 billion 450 million for social services, housing and refurbishment works; 8 billion 900 million for industry and mines; 4 billion 270 million for electricity; 990 million for various works. These figures show that transport and communications absorb the highest percentage of expenditure, ie 28.9% of the total budget; this is explained by taking into account that India, as stated above, has a predominantly rural population and only by improving and increasing the communication routes and services can we hope for an increase in private investments and a reduction in the flow of raw materials from the countryside to the cities and inversely that of manufactured goods from the cities to the countryside. In short, it is a question of gradually industrializing the countryside and bridging the gap between the urban economy and the rural economy which is still in extremely backward conditions.

The Community Development Program is specifically dedicated to the improvement and development of rural areas, formally inaugurated on 2 October 1952 during the first five-year plan and still being implemented. It is indeed a grandiose project which, without excessive impositions and pressures from above but rather by favoring, stimulating and guiding free initiative (and this is perhaps its main merit), will forever transform, and in part has already transformed, the life of the Indian countryside, motionless for centuries. It is no exaggeration to say that India’s economic, social, political and cultural future largely depends on its success. When the rustic common Indian will no longer be an aggregate of mud huts, devoid of the most basic sanitary equipment, isolated, as well as from the world,

What may surprise is the still relatively little attention that the second plan pays to the exploitation of mineral resources, despite the fact that India’s subsoil ranks first on the world scale for high-alloy iron ore deposits and the third for high-alloyed iron ore. those of manganese, have adequate deposits of coal, bauxite, gypsum, chromium, gold, rock salt and feldspar, and provide four-fifths of world production of mica. Large deposits of thorium have also been discovered recently and the first surveys made have revealed the presence of oil in Assam. Further, careful exploration of the subsoil would certainly reveal other riches.

The ultimate goal of the second floor is, like the first, to create a “welfare state” (welfare state) or, as the Indians say, of giving a socialist society (socialist pattern of society).

Some of the particular and immediate results that the plan aims to achieve are: a 150% increase in the production of basic necessities, 25% of agricultural production, 64% of industrial production, 63% of coal production, 108% of that of cement, 100% of that of electricity, 231% of that of steel; the irrigation of another 21 million acres of land and the extension of the program for the development of agricultural municipalities (mentioned above) to all rural areas of India for a total of 325 million residents and approximately 600,000 villages. As regards communication services and traffic, the plan provides for the modernization of the ports of Calcutta, Madras, Bombay and Vizagapatnam, the construction of another 19,000 miles of carriage roads, the modernization of railway services, and an increase of 35% in freight transport and 15% in passenger transport. Finally, the plan proposes a school development that will allow another 8 million children to attend primary schools with an increase of 23%; the construction of 3,000 new rural clinics and the increase of 12,500 in the number of doctors. The average individual income is expected to rise to $ 69 (Lire 41,400) per year. Of great economic (as well as political) importance was the agreement that India and Pakistan, after years of laborious negotiations, signed on 19 September 1960 to regulate the exploitation of the waters of the Indus basin. The agreement assigns the waterways of the eastern part of the basin to India (Ravi, Bias, Sutlej) and to Pakistan those of the western part (Chenab, Jhelum and Indo himself). With the contribution of Australia, Canada, Federal Germany, the United Kingdom, the United States and the World Bank, the creation of a financial fund for the development of the basin in question and to subsidize the irrigation works was at the same time planned. or other types which, according to the agreement, will have to be built on Pakistani territory.