The following points highlight the six notable structural changes in the Indian economy since independence.

Change # 1. Breakdown of the Age-Old Isolation of the Village:

For more than two and half centuries before Independence, Indian village had remained isolated where subsistence farming was the main occupation.

However, in the post-Independence period, the old structure based on self-sufficiency gradu­ally yielded place to a fundamentally different kind of organisational structure in which the vil­lage started producing for external market and ac­quiring some of its consumption goods from out­side. This has occurred mainly due to an improve­ment in communication systems, both domestic and foreign.

However, in spite of these changes, the agricultural community in India, which is con­servative in its outlook, still engages itself largely in food production for the family. Trading of sur­plus has been kept to a minimum. Farmers nor­mally sell such a small part of their produce as may be- necessary to clear their dues in rent and interest on loans.

Change # 2. Growth of Industrial and Commercial Centres:


The opening up of trading opportunities gave rise to new urban centres, equipped with fa­cilities for handling large volumes of trade. With the emergence of new sets of wants, the need for setting up industries on a much large-scale than before assumed importance. As a result, indus­trial centres sprang up in different parts of the country. These centres now play a dual role—as producers of essential items for the rest of the economy and as distributors of the marketable surplus of agricultural produce.

Change # 3. Increase in Labour Mobility and Relaxa­tion of Rules Relating to Occupational Choice:

The planning period is characterised by an in­crease in labour mobility—both geographical and occupational. As several new industries were set up, various new types of trades and professions also emerged. Large-scale industries were set up, various new types of trades at distant places and the growth of new industrial centres ensured a steady flow of workers from the rural areas to the emerging urban centres.

Change # 4. Gradual Disappearance of Traditional Constraints on Population Growth:

The pre-In- dependence economic structure was not condu­cive to the growth of productive facilities. There was hardly any chance for population to grow within the old structure. However, the only con­sequence of population growth in such a static environment would be limitation of means of sub­sistence. Population explosion under unchanged production conditions would lead to two adverse consequences.

One consequence of the emergence of the new economic structure was that popula­tion growth accelerated. This was partly attribut­able to marginal increase in birth rate and largely to fall in the death rate (following the growing demand for and supply of medical care and con­trol of malignant diseases).


Although production facilities also increased pari passu with an increase in the size of the population, not too happy a bal­ance is being maintained between the two at present. Even today, the population constantly presses on the limited means of subsistence—the ultimate check to population growth in Malthus’s view. Therefore, famine or near-famine conditions prevail whenever food supply fails to increase as rapidly as the population grows.

Change # 5. Development of Competitive and Ac­quisitive Outlook:

In the post-independence pe­riod, there was competition for acquiring the lim­ited stock of land through the bidding process. The growing demand for a fixed stock of land led to a rise in rent per acre. In some areas rents rose much above their customary levels. Likewise, there was competition of the limited number of jobs that were available.

In addition, there was competition for professional success as also for industrial and commercial (trading) opportunities. The emergence of competition in a vigorous form was made possible, at least to some extent, by non-economic factors, viz., the destruction of old values and breakdown of the age-old joint family system.

Competition forced people to develop new knowledge about the techniques of production and develop new products to meet new wants. Eco­nomic historians feel that this was perhaps the proximate cause of change that separates the new economic structure from the old.

Change # 6. Extension of the Economic Activities of the State:


For quite some time the new economic structure in India has been characterised by a large degree of participation of the State in economic matters. This tendency really gained momentum with the planning process. The Government of India introduced five-year plans for economic de­velopment since 1950-51 and thus placed almost the entire responsibility for development planning on the State agencies.

The declared objective of economic planning in India is the realisation of a ‘socialist pattern of society’ in which all economic activities will be performed by a spirit of social service and all sections of society will share the fruits of economic progress in an equitable man­ner.