The Indian economy was a backward economy at the time of Independence as over 70-75% of the population was engaged in agriculture. There was a complete absence of any infrastructure for imparting knowledge on technical skill to the labourers.
The following statistics reveal the extent of backwardness in the economy
(i) Per Capita Income was low. It was Rs 1274 in 1950-51.
(ii) Large scale uneemployment and underemployment existed.
(iii) Agricultural sector and industrial sector both were in a dismal condition.