Chapter – 1 Indian economy on the eve of independence.

Indian Economic Development

Chapter – 1

Indian economy on the eve of independence

India was under the colonial rule of the Brittan for two centuries till 15 august 1947.

THE MAIN AIM OF THE BRITISH RULE WAS TO REDUCE INDIA IN TO A FEEDER ECONOMY FOR THE RAPIDLY GROWING BRITTAN.

The colonial government in India followed a policy of

protection and promotion of the economic interest of

Brittan.

They want to transform India in to a supplier of raw materials to Brittan and a consumer of finished goods from Brittan

Let us see the economic condition of India under their rule. 

AGRICULTURAL SECTOR

British rule transformed India in to an agrarian economy. About 85% of Indian population engaged in agricultural sector.

But the agricultural productivity was very low

due to the following factors.

(a) Various systems of land settlements : The British introduced Zamindari system, under which the profit from agricultural sector gone to the hands of the Zamindars instead of cultivators. They did nothing to improve the conditions of agricultural sector. This lead misery and tension among the cultivators.

(b) Revenue settlement: Under the revenue settlement, Zamindars were

asked to deposit revenue from agricultural sector at specified dates. If they failed to remit the same, they will

loss the rights on lands.

(c) Lack of irrigation facilities(d) Little use of fertilizers

(e) Low level of technology

(f) The partition of India in to Pakistan and Bangladesh received a further

setback, since India’s majority cotton and textile mills were there.

INDUSTRIAL SECTOR

The primary motive of the British colonial government was to

reduce India in to a mere exporter of raw materials to Britain and

turn India in to a market for finished products from Britain.

The main features of the industrial sector during their reign were (a) The world famous Indian handicrafts declined. It leads to massive unemployment in India.(b) Modern industries began to take root in India in the second half of the nineteenth century. It includes setting up of cotton textiles mills especially in Maharashtra and Gujarat, Jute mills in Bengal, the Tata Iron and Steel Company (TISCO) established in 1907. (c) No capital goods industries (industries which produce machines) were established, which set back our industrialization. (d) The operation of the public sector was limited to power generation, railways, communications, ports etc.

FOREIGN TRADE

The features of India’s foreign trade during their rule are

(a) India reduced in to a an exporter of primary products like silk, cotton, wool, indigo, sugar etc and an importer of finished products like cotton, silk, woolen clothes, capital goods etc.

(b) Britain maintained a monopoly control over India’s exports and imports. More than half of the trade was with Britain. The opening of Suez Canal further increased it. (c) Huge export Surplus. It means excess of exports over imports. It made the scarcity of essential goods within the country. More over this surplus was used to meet the expenses of war, office set up etc by the British.

DEMOGRAPHIC CONDITIONS

(a) The over all literacy rate was less than 16 % - the female literacy was only 7%.

(b) Public health facilities were unavailable to majority population. As a result, deaths due

to water and air-born diseases increased.

(c) The mortality rate was very high. The infant mortality rate was alarming at

218/1000. (At present it is 63)

(d) Life expectancy was also very low – 32 years (at present 63 years).

OCCUPATIONAL STRUCTURE

Occupational structure means the distribution of working persons among different sectors. It showed the following features

(a) The agricultural sector accounted the highest work force- 70 to 75% of population. In the industrial sector it was 10% and the service sector 15 to 20%.

(b) Growing regional variation in work force. In Orissa, Rajasthan, Punjab etc work force in agriculture was high. But in Madras presidency (Tamilnadu, Kerala, Andra and Karnataka) Bengal and Maharashtra it was very low.

INFRASTRUCTURE

(a) The roads were built mainly for mobilizing the army within the country

and transporting the raw materials from farms to the railway stations.

(b) The introduction of railway in India in

1850

(c) Development of inland trade and sea lines, electric telegraph, postal services

etc were the merit side of the British regime in India.

Benefits of Railway in India

. It helped the people to undertake long distance journey by train. It helped to break geographical and cultural barriers. It leads to the commercialization of Indian agriculture. It expanded India’s export. Export surplus increased. It made the scarcity of essential goods within the country. More over this surplus was used to meet the expenses of war, office set up etc by the British.

Possible questions

‘ The stagnation in agricultural sector was caused mainly because of the various systems of land settlements that were introduced by the British govt. Do you agree with this statement? Justify your answer. (4 score, March 2010).

‘During the colonial period industrial progress of the Indian economy was very slow’.

Give reasons for supporting this statement. (4 score, Imp 2009)

‘India became an exporter of primary products and an importer of finished goods produced in the factories of Britain’.

Critically examine the foreign policy adopted by the British in the light of the above statement. (4 score, March 2009).

‘The economic policies persuaded by the Colonial govt. in India were concerned more with the protection and promotion of the economic interest of their home country than with the development of the Indian economy’.

Substantiate the statement with reference to the policies adopted by the Britain in Indian agriculture, Industry and foreign trade. (4 score, Imp 2010).

“Development of infrastructure during the colonial period can be considered as a positive contribution of the British”.

Analyze this statement.

(3 scores, March 2014)

In a debate, one of your friends remarked “ the creation of large export surplus during the British rule did not benefit India”.

Do you agree. Substantiate your answer.

(2 scores, Impvt 2014)

Thank Youby

Ashraf. M, Principal, Govt. HSS, Thengamam, Adoor