Swadeshi, Planning and the Economy at Independence

How economic nationalism grew from the Swadeshi movement to the Bombay Plan, what India's economy looked like in 1947, and a recap of the module.

The struggle for independence was also a struggle over economic ideas. By 1947, Indian leaders had developed plans for building a modern economy.

The Swadeshi movement

When the British partitioned Bengal in 1905, nationalists launched the Swadeshi movement, urging Indians to boycott British goods and buy Indian-made products. It encouraged Indian enterprises in textiles, soap, matches and banking.

Mahatma Gandhi later promoted khadi, hand-spun cloth, as a symbol of self-reliance and a source of rural employment.

Indian enterprise

Indian businesses grew during the colonial period, especially during the World Wars when imports were disrupted. Families such as the Tatas, Birlas and others built major industrial groups.

The Bombay Plan

In 1944, leading industrialists, including J.R.D. Tata and G.D. Birla, published A Plan of Economic Development for India, known as the Bombay Plan. It proposed:

A large role for the state in building infrastructure and heavy industry.
Rapid growth in national income over fifteen years.

Surprisingly, business leaders supported extensive government planning, reflecting a broad consensus that the state should lead industrialisation.

The economy in 1947

At independence, India was one of the poorest countries in the world:

Income per person had barely grown in the first half of the 20th century.
Life expectancy was around 32 years.
Literacy was very low; the 1951 Census recorded about 18 percent.
Most people worked in agriculture, with low productivity.
Partition caused massive displacement and disrupted economic links.

The legacy

These conditions shaped independent India’s strategy: planning, public sector industry, self-reliance and import substitution. The lesson “From Independence to 1991: India’s Planned Economy Era” continues the story.

Module recap

India’s economic history spans Harappan trade, Roman gold, Chola merchants, the Mughal economy and the global textile trade. Colonial rule reshaped land revenue, trade, industry and railways, while famines and the drain theory fuelled economic nationalism.

The Swadeshi shop

In 1906, a family in Calcutta opens a shop selling only Indian-made cloth and soap. Customers, inspired by the movement, choose these goods even when British imports are cheaper. Small enterprises like this helped build Indian industry and national pride.

Thinking India's economic history began in 1947

India's economy has a long history of trade, crafts and institutions. Understanding it helps explain the choices made after independence.

Key takeaways

The Swadeshi movement of 1905 promoted Indian-made goods.
The Bombay Plan of 1944 saw industrialists back state-led planning.
In 1947, India had very low incomes, life expectancy and literacy.
These conditions shaped independent India's planning and self-reliance.