NCERT Class 11 Economics Indian Economy On The Eve Of Independence

INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

1.1 INTRODUCTION

The primary objective of this book, Indian Economic Development, is to familiarise you with the basic features of the Indian economy, and its development, as it is today, in the aftermath of Independence. However, it is equally important to know something about the country's economic past even as you learn about its present state and future prospects. So, let us first look at the state of India's economy prior to thecountry's independence and form an idea of the various considerations that shaped India's post-independence development strategy.

The structure of India's presentday economy is not just of current making; it has its roots steeped in history, particularly in the period when India was under British rule which lasted for almost two centuries before India finally won its independence on 15 August 1947. The sole purpose of the British colonial rule in India was to reduce the country to being a raw material supplier for Great Britain's own rapidly expanding modern industrial base. An understanding of the exploitative nature of this relationship is essential for any assessment of the kind and level of development which the Indian economy has been able to attain over the last six decades. 1.2

1.2 LOW LEVEL OF ECONOMIC DEVELOPMENT UNDER  THE COLONIAL RULE

India had an independent economy before the advent of the British rule. Though agriculture was the main source of livelihood for most people, yet, the country's economy was characterised by various kinds of manufacturing activities. India was particularly well known for its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc. These products enjoyed a worldwide market based on the reputation of the fine quality of material used and the high standards of craftsmanship seen in all imports from India. The economic policies pursued by the colonial government in India were concerned more with the protection and promotion of the economic interests of their home country than with the development of the Indian economy. Such policies brought about a fundamental change in the structure of the Indian economy — transforming the country into supplier of raw materials and consumer of finished industrial products from Britain. Obviously, the colonial government never made any sincere attempt to estimate India's national and per  capita  income. Some individual attempts which were made to measure such incomes yielded conflicting and inconsistent results. Among the notable estimators — Dadabhai Naoroji, William Digby, Findlay Shirras, V.K.R.V. Rao and R.C. Desai — it was Rao, whose estimates during the colonial period was considered very significant. However, most studies did find that the country’s growth of aggregate real output during the first half of the twentieth century was less than two per cent coupled with a meagre half per cent growth in per capita output per year.

1.3 AGRICULTURAL SECTOR

India’s economy under the British colonial rule remained fundamentally agrarian — about 85 per cent of the country’s population lived mostly in villages and derived livelihood directly or indirectly from agriculture. However, despite being the occupation of such a large population, the agricultural sector continued to experience stagnation and, not infrequently, unusual deterioration. Agricultural  pro- ductivity became low though, in absolute terms, the sector experienced some growth due to the expansion of the aggregate area under cultivation. This stagnation in the agricultural sector was caused mainly because of the various systems of landsettlement that were introduced by the colonial government. Particularly, under the zamindari system which was implemented in the then Bengal Presidency comprising parts of India’s present-day eastern states, the profit accruing out of the agriculture sector went to the zamindars instead of the cultivators. However, a considerable number of zamindars, and not just the colonial government, did nothing to improve the condition of agriculture.

EXERCISES

1. What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?

2. Name some notable economists who estimated India's per capita income during the colonial period.

3. What were the main causes of India's agricultural stagnation during the colonial period?

4. Name some modern industries which were in operation in our country at the time of independence.

5. What was the two-fold motive behind the systematic deindustrialisation effected by the British in pre-independent India?

6. The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.

7. What objectives did the British intend to achieve through their policies of infrastructure development in India?

8. Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.

9. What do you understand by the drain of Indian wealth during the colonial period?

10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?

11. Give a quantitative appraisal of India's demographic profile during the colonial period.

12. Highlight the salient features of India's pre-independence occupational structure.

13. Underscore some of India's most crucial economic challenges at the time of independence.

14. When was India's first official census operation undertaken?

15. Indicate the volume and direction of trade at the time of independence.

16. Were there any positive contributions made by the British in India? Discuss.

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