At the time of Independence, India inherited an economy that was mainly designed to serve the interests of British colonial rulers. The economic condition of the country was very weak. The growth of per capita income during the 100 years before Independence was extremely low, at around 0.5% per year. There were also many periods when the economy did not grow at all and even declined.

In earlier times, India was famous for producing fine cotton textiles, handicrafts, and other goods. Even during the early phase of British rule, before the Industrial Revolution in Britain, India had a strong industrial base compared to many European countries.

However, over time, British policies weakened Indian industries. By the time India became independent, the economy had been reduced to a mainly agricultural economy. India was exporting raw materials and minerals to support British industries. In many cases, even food grains were exported, while people in India faced shortages and hunger.

Trends in Distribution of National Income

After Independence, the structure of the Indian economy began to change gradually. The distribution of GDP across different sectors shows how the economy evolved over time.

In 1950–51, India was largely an agricultural economy:

• The primary sector (agriculture) contributed 56.70% of GDP
• The secondary sector (industry and manufacturing) contributed only 13.66%, showing that industrial development was still at an early stage
• The tertiary sector (services) contributed 29.64%, which was almost double the share of the secondary sector

This data clearly shows that agriculture dominated the economy in the early years after Independence, while industry was still developing and services had a moderate presence.

Simple Understanding

• Before Independence → Weak, agriculture-based economy
• After Independence → Gradual shift in structure
• Agriculture dominant, industry growing, services emerging