Indian ecconomy at the time of british rule
At the time of Independence, Indian economy
was under-developed, there was low per-capita income, poor infrastructure,
illiteracy, it was mainly dependent on agriculture and there was no industrial
development, it was dependent on imports. Apart from these Indian economy was
semi feudal, depreciated, stagnant. India suffered from capital deficiency,
high population growth, famines, unemployment, economic disparities and lots
more. ndia was one of the richest and the most flourishing nations of
the world and this is evident from the past history of the nation. India
attracted many invaders in the past with its wealth. However, after British
Invasion, India suffered a massive economic downfall and it continued even
after India's Independence. Nevertheless, Indian economy is now gaining
momentum and is developing quite fast.
Low level of economic develoment
under the colonical rule india had an
independent economy before the advent of the british rule. Though agriculture
was the main source of livelihood for most people, the country’s economy was
characterized 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 reputattion 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 colonical 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. Most studies did find that the
countre’s growth of aggregate real output during the first half of the
twentieth century was less than two per coupled with a meager half per cent
growth per capita output per year.
AGRICULTURAL SECTOR
India’s economy the
British colonical rule remained fundamenally 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, unusul deterioration. Agricultural productivity became
incrementally low though, in absolute terms, the sector shows expansion 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 land
settlement that were introduced by the colonical government.that is the
introduction of middle man to farm field. Neither the goverment nor the
zamindars did nothing for the improvement of farm field. The other reason for
the back ward condition of agriculture duing this period was low level of
technology,negligible use of chemical fertilizers and pesticieds and low
irrigational fecilities agrravated the problem.
The commercialisation of agriculture also act as
a reason for the back ward condition of the sector, commercialisation of
agriculture refers shifting of production from food grains to cash crops or the
agriculture produce is for market not for consumption. There was some evidence
of a relatively higher yield of cash crops in certain areas of the country due
to commercialization of agriclture.
INDUSTRIAL
SECTOR
As in the case of
agriculture, so also in manufacturing, india could not develop a sound
industrial base under the colonical rule. Even as the country’s world famous
handicraft industies declined, no corresponding modern industrial base was
allowed to come up to take pride of place so long enjoyed by second by the
former.the british did not take a sufficient step for industrilisation of the
country rather than deindustrilise the nation. There are two motives behind
this one is to convert india as achief
supplier of raw material for british factories and a market for selling british
finshed goods.
During the second half of
the nineteenth century, modern industry began to take root in india but its
progress remained very slow. Initially, this development was confined to the
setting up of cotton and jute textile mills. The large scale industy did notset
up the colinoel rule, the only large scale industry was sep in 1907 (TISCo) The growth rate new industrial sectoor and its
contribution to the Gross Domestic Product (GDP) remained very small.the public
investment in industries will reamin very low in this period
FOREIGN TRADE
India has been an
important trading nation since ancient times. But the restrictive policies of
commodity production, trade and tariff pursued by the colonial government adversely
affected the structure, composition and volume of india’s foreign trade.
Consequently, india become
an exporter of primary products such as raw silk, cotton, wool, sugar, indigo,
juste ect. And an importer of finished consumer goods like cotton, silk and
woolen clothes and capital goods llike light machinery produced in the
factorice of Britain. Britain maintained
a moopoly control over india’s exports and imports.
The most important
characteristic of india’s foreign trade throughout the colonial period was the
generation of a large export surplus,this surpuls was used for meeting was
expences.
DEMOGRAPHIC CONDITION
Various
details about the population of British india were first collected through a census
in 1881. Though suffering from certain limitations, it revealed the unevenness
in india’s population growth. Subsequently, every ten years such census
operations were carried out. Before 1921, India was in the first stage of
demographic transition. The second stage of ttransition began after 1921. However
, neither the total population of india
nor the rate of population growth at this stage was very high.
The socio domographic indicaters moves in
backward direction during british rule, the literacy rate was less than16% amog
hiese the female literacy was about 7% only.the public health fecilities are
not availiable if availiable the
fecilities are adequate.therefore water bone and air bone deasise are frequient
in india. The mortalitity rate is very alarming especially in fant mortality
rate is very high in worl is about 218per thousand. The life expectancy at that
time was 32 years
OCCUPATIONAL STRUCTURE
During the colonial
period, the occupational structure of india, i.e., distribution of working
persons across different industries and sectors, showed little sign of change.
The agricultural sector accounted for the largest share of workforce, which
usually remained at a high of 70- 75 per cent which the manufacturing and the
services sectors accounted for only 10 and 15-20 per cent resectively.
INFRASTRUCTURE
Under the colonial regime,
basic infrastructure such as railways, ports, water transpport, posts and
telegraphs did railways, ports, water transport, posts and telegraphs did
develop. However, the real motive bahind this development was not to provide
basic amenities to the people but to sub serve verious colonial interests.
Roads constructed in india prior to the advent of the british rule were not fit
for modern transport.
The British
introduced the railways in 1850 and it is considered as one of their moste
important contributions.
Question and
answers
Question 1: What was the focus of the economic policies
pursued by the colonial government in India? What were the impacts of these
policies?
The main focus of the economic policies pursued by the
colonial government was to make India a mere supplier of Britain’s own flourishing industrial base. The policies were
concerned mainly with the fortification and advancement for their home country.
The interests of the Indian economy were completely ignored. Such policies
brought structural changes in the Indian economy by transforming it to a
supplier of raw materials and consumer of finished products from Britain. The
impacts of these policies are discussed as follows in detail;
i. Low Economic Development
Throughout the British rule, Indian economy experienced very
low level of economic development. As per some researches, Indian economy grew at even less than two
percent during 1900-50. The reason for such a low level of development was that
the British government was more
concerned with the promotion of economic interests of their home country.
Consequently, the colonial rule
transformed India’s agriculture sector to a mere supplier of raw materials for
the British industries. This not only affected the production of the
agricultural sector but also ruined the small manufacturing units like
handicrafts and cotton industries. These
manufacturing units faced a stiff competition from the British machine made
textiles and handlooms.
ii. Backwardness of Indian Agriculture
Under the colonial rule, India was basically an agrarian
economy employing nearly 85% of its population. Nevertheless, the growth of the agriculture sector was meager.
This was due to the prevalence of various systems of Land Settlement, particularly Zamindari system. Under this
system, the zamindars (owners of land) were required to pay very high
revenue (lagaan) to the British
government, which they used to collect from the peasants (landless labourers,
who were actually cultivating). The
zamindars were mainly concerned with extracting high revenues from the peasants
but never took any steps to improve the
productivity of the land. Moreover, in order to feed British industries with
cheap raw materials, the Indian peasants
were forced to grow cash crops (such as, indigo, cotton, etc.) instead
of food crops (such as, rice and wheat). This
commercialisation of agriculture not only increased the burden of high
revenues on the poor peasants but also led India to face shortage of food grains. Therefore, Indian
agriculture remained backward and primitive.
iii. Deindustrialisation of Indian Economy
India failed to develop a sound and strong industrial base
during the colonial rule. The status of industrial sector during the British rule can be well defined by the term
‘systematic deindustrialisation’. The cause of deindustrialisation can be
attributed to the downfall of India’s
handicraft industry and the cause of bleak growth of modern industry was the
lack of investment. On one hand, the
British government imposed heavy tariffs on the export of Indian handicraft
products and on the other hand, allowed free
exports of Indian raw materials to Britain and free imports of British products
to India. As a result of the heavy tariffs, the
Indian exports became costlier and its demand in the international market
fell drastically that led to the collapse of Indian handicrafts industries. Simultaneously, the
demand for the handicrafts products also fell in the domestic markets due to
stiff competition from the machine made
textiles of Britain. As a result, the domestic industries lacked investment and
growth initiatives.
iv. Regression in Foreign Trade
During the colonial rule, the British government owned the
monopoly power over India’s foreign trade. The British government used the trade policy according to the
interests of their home country. The exports and imports transactions were
restricted only to India and Britain. On
one hand, the exports from India provided the cheap raw materials to the
British industries and on the other
hand, India's imports from Britain provided a virgin market for Britain’s
products. In either ways, British industries were benefitted. Moreover, the surplus generated from
t foreign trade was not invested in the Indian economy; instead it was used
in administrative and war purposes by
Britain to spread their colonial power.
Question 2: Name some notable economists who estimated
India’s per capita income during the colonial period.
As the British government was never interested in upliftment
of our country, so they never took any initiative to measure India’s national and per capita income. Though some
of the economists tried to estimate India’s national income and per capita
income during the colonial rule, but the results are mixed and conflicting. The
following are some of the notable economists who were engaged in estimation of national income and
per capita income:
i. Dadabhai Naroji ii.
William Digbay iii. Findlay Shirras iv. V.K.R.V Rao v. R.C. Desai
Out of these, V.K.R.V Rao's estimates are considered to be
significant. Most of these studies revealed that Indian economy grew at even less than two percent during 1900-50
with half per cent growth in per capita output per year.
Question 3:what were the main causes of
India’s agricultural stagnation during the colonial period?
Under the colonial rule, India was basically an agrarian
economy, employing nearly 85% of its population. Nevertheless, the growth of the agriculture sector was meager.
The following are the causes explaining stagnancy in Indian agriculture
sector during the colonial rule:
1. Introduction of Land Revenue System
This was due to prevalence of various systems of Land
Settlement, particularly Zamindari system. This system was introduced by Lord Cornwallis in Bengal in 1793. Under this
system, the zamindars(owners of land) were required to pay very high
revenue (lagaan) to the British
government, which they used to collect from the peasants (landless labourers,
who were actually cultivating). The
zamindars were mainly concerned with extracting high revenues from the peasants
but never took any steps to improve the productivity
of the land. This resulted in low agricultural productivity and worsened the
peasants economically.
2. Forceful Commercialisation
Initially before the British rule, the farmers were
practicing conventional subsistence farming. They used to grow crops like
rice and wheat for their own
consumption. But afterwards, in order to feed British industries with cheap raw
materials, the Indian farmers were forced to grow commercial crops (like indigo
required by British industries to dye textiles) instead of food crops (like rice and wheat). This led to the
commercialisation of Indian agriculture. This commercialisation of Indian
agriculture not only increased the
burden of high revenues on the poor farmers but also led India to face shortage
of food grains, resources, technology
and investment. Therefore, Indian agriculture remained backward and primitive.
3. Lack of Irrigation Facilities and Resources
Besides the above factors, Indian agricultural sector also faced
lack of irrigation facilities, insignificant use of fertilisers, lack of investment, frequent famines and other
natural calamities, etc. that further exaggerated the agricultural performance
and made it more vulnerable.
Question 4:
Name some modern industries which were in operation in our
country at the time of independence. The second half of the nineteenth century
witnessed the emergence of modern industries. At the initial stage, development
was confined to setting up of cotton and
jute textile mills. The western parts of the country Maharashtra and Gujarat
was the hub for cotton textile mills
which were mainly dominated by the Indians whereas the jute industries were
mainly concentrated in Bengal and were
dominated by the British. In the beginning of the 20thcentury, Iron and steel
industries also started emerging gradually. It was incorporated in 1907. Some
other industries that were operating at a smaller scale during the British era
were sugar industry, cement industry and
paper industry.
Question 5 What was the two-fold motive behind the
systematic deindustrialisation affected by the British in pre - independent
India?
The following are the two-fold motives behind the systematic
deindustrialisation affected by the British:
1. Making India a Supplier of Raw Materials: The main motive
of the British government was to make India a mere supplier of cheap raw materials to feed its own
flourishing industrial base.
2. Making India a Market for Finished Goods: Another
important objective of the British government was to use India as a virgin market to sell the finished goods produced by
the British industries.
Question 6 The
traditional handicrafts industries were ruined under the British rule. Do you
agree with this view? Give reasons in support of .
Yes, we do agree with the above statement that the
traditional handicrafts industries were ruined under the British times. The following
are the reasons in favour of the statement.
1. Discriminatory Tariff Policy: The British rule in India
corresponded with its industrialisation. The British rule used India both as a source of cheap raw materials as well as
easy accessible market for their finished products. Thereby, they imposed heavy
tariffs (export duties) on India’s export of handicraft products, while allowed
free export of India’s raw material to Britain and free import of British products into India.
This made Indian exports costlier and its international demand fell drastically
leading to the collapse of handicrafts
industries.
2. Competition from Machine made Britain Goods: The demand
for the handicrafts products experienced a downward trend in the domestic markets as well. This was due to
stiff competition from the machine made textiles from Britain. This was because
of the reason that the goods produced
mechanically in Britain were comparatively cheaper and of superior quality than
the Indian handicraft goods. This narrowed the market for Indian industries.
3. Emergence of New Class: The British rule in India
popularised western lifestyle in India. There was an emergence of a new section of population (consisting mainly of
zamindars) in India who liked the British goods. This section used to spend
lavishly on the British products that
provided impetus for the development of British industries at the cost of the
domestic industries. Hence, gradually
Indian industries perished away.4 www.cbse.entrancei.com
4. Disappearance of Princely State: Prior to the advent of
British, India was ruled by princely states. They used to patronise handicrafts
industries and consequently, Indian handicrafts gained reputation in the
international markets. But during the British
rule, these princely states were ruined thereby ruining the protection
of these handicrafts industries. Thus, gradually Indian handicrafts lost its reputation and its
importance deteriorated.
Question 7:
What objectives did the British intend to achieve through
their policies of infrastructure development in India?
One cannot deny the fact that under the British rule, there
was significant change in the infrastructural development in the country. But the bonafide motive of the
British behind the infrastructure development was only to serve their own
colonial interests. There was
infrastructural development in the fields of transport and communication. The
roads served the purpose of facilitating
transportation of raw materials from different parts of the country to ports,
and ports were developed for easy and fast
exports to and imports from Britain. Similarly, railways were introduced
and developed for the transportation of finished goods of British industries to the interiors of
India. Railways assisted British industries to widen the market for their
finished products. Post and telegraphs
were developed to enhance the efficiency and effectiveness of the British
administration. Hence, the aim of infrastructural
development was not the growth and development of the Indian economy but to
serve their own interest.
Question 8:
Critically appraise some of the shortfalls of the industrial
policy pursued by the British colonial administration. The focus of the
industrial policies pursued by the colonial government in India was to make our
country a mere supplier of Britain’s own
flourishing industrial base. The policies were concerned mainly with the
fortification and advancement for their own
country. The industrial policy pursued by the British colonial administration
has the following shortfalls:
1. Neglect of Indian Handicraft Industries: The British
followed a discriminatory tariff policy under which they imposed heavy tariffs (export duties) on India’s export of
handicraft products while allowed free export of India’s raw material to
Britain and free import of British
products to India. This made Indian exports costlier and its international demand
fell drastically leading to the collapse
of handicrafts industries. Also, Indian handicrafts faced a stiff competition
from machine made textiles of Britain. The
emergence of a new section of people who liked the British goods more in
comparison to the domestic goods encouraged
British industries at the cost of Indian industries. This led to the
declining demand for Indian products and encouraged foreign products.
2. Lack of Investment in Indian Industries: The modern
industries in India demanded investments in capital goods that were beyond the means of Indian investors. On the
other hand, British government was least interested in investing in Indian industries. Thus, due to the lack of
sufficient investment, the growth of Indian industries was acutely constrained.
Question 9:
What do you understand by the drain of Indian wealth during
the colonial period?
Dadabhai Naroji advocated the theory of ‘Drain of Wealth’ in
the 19th century. The colonial period was marked by the exploitation of Indian resources. The sole
motive of Britain to conquer India was to own a perennial source of cheap
raw materials to feed its own industrial
base in Britain. Further, British government used India’s manpower to spread
its colonial base outside India. Also,
the administrative expenses that were incurred by the British government to
manage the colonial rule in India were
borne by Indian Exchequer. Thus, the British rule drained out Indian wealth for
the fulfillment of its own interests.
Question 10:
Which is regarded as the defining year to mark the
demographic transition from its first to the second decisive stage?
The year 1921 is regarded as the defining year or the ‘Year
of Great Divide’ because prior to 1921, population growth in India was never consistent. India was in the first
phase of demographic transition till 1921 that was characterised by high birth
rate and high death rate. It implies low
survival rate (or low life expectancy), which was nearly 8 per thousand per
annum. Therefore, the period before 1921
witnessed stagnant population growth rate. After 1921, India’s population
growth never declined and showed a
consistent upward trend.
Question 11:
Give a quantitative appraisal of India’s demographic profile
during the colonial period.
India’s Demographic conditions during the British rule
depict our economy as stagnant and backward. Both the birth rate and death rate were as high as 48 and 40 per
thousand. Due to high birth rate and high death rate the population growth
was stagnant. The Infant Mortality Rate
was also very high of about 218 per thousand. The Life Expectancy Rate was as
low as 32 years while presently it is
63.5 years. The literacy rate was less than 16 percent which denotes social
backwardness and gender bias in the
economy. We can infer from the above figures that India was featured with massive
poverty, low standard and quality of
living and low survival rate in the country. The lack of health care facilities
and lack of health awareness were the main
causes behind such demographic conditions of India.
Question 12:
Highlight the salient features of India’s pre-independence
occupational structure.
The occupational structure that refers to the distribution
of population engaged in different occupations, showed no variation throughout the British rule. The following
are the salient features of India’s pre-independence occupational structure:
1. Agriculture- The Prime Occupation: Under the colonial
rule, India was basically an agrarian economy, employing nearly 85% of its population. As India had a massive
poverty during the colonial rule, so a large proportion of the population was
engaged in agricultural sector to earn
their subsistence. But due to the prevalence of Zamindari system, agricultural
sector lacked investment and, thereby,
its growth was highly constrained. Thus, in other words, despite employing a
significant proportion of the population,
the growth of agriculture sector was meager.
2. Industry- The Bleak Occupation: Apart from agriculture, a
small proportion of population was employed in manufacturing sector. Nearly 10% of the total workforce was
engaged in manufacturing and industrial sector. This was due to the stiff competition that the Indian industries faced
from the machine made cheap goods from Britain. Further, the lack of
investment, initiatives and the unfavourable tariff structure constrained
industrial sector. Thus, the Indian industrial sector failed to contribute significantly to India’s GDP.
3. Unbalanced Growth: The three sectors of Indian economy,
i.e. agricultural, industrial and tertiary sector were unequally developed. While the agricultural sector was
relatively developed, whereas, the other two sectors were at their infant
stage. In addition, there was regional
variation in the occupational structure of India. While on the one hand, states
like Tamil Nadu, Andhra Pradesh and Bombay experienced a fall in the
agricultural work force on the other hand states like Orissa, Rajasthan
and Punjab experienced a rise in the
agricultural workforce.
Question 13:
Underscore some of the India’s most crucial economic
challenges at the time of independence.
The exploitative colonial rule of the British hampered
almost every spheres of Indian economy badly. As an end-result, India faced
acute economic challenges at the time of independence. The following are some
of the economic challenges faced by the Indian economy:
1. Low Level of Agricultural Productivity: During the
colonial rule Indian agricultural sector was used by the British to suit to their
own interest. Consequently, Indian agricultural sector experienced stagnancy,
low level of productivity, lack of investment, poor condition of landless
farmers and peasants. Thus, the immediate concern for India was to develop its
agricultural sector and its productivity. Some of the immediate reforms needed
at the time of independence were abolition of Zamindari system, need of land
reforms, reducing inequality of land ownership and upliftment of the peasants.
2. Infant Industrial Sector: India failed to develop a sound
industrial base during the colonial rule. In order to develop the industrial
sector, India needed huge capital, investments, infrastructure, human skills,
technical knowhow and modern technology. Further, due to stiff competition from
the British industries, India’s domestic industries failed to sustain. Thus, developing small scale and large scale
industries simultaneously was the main concern for India to develop its
industrial sector. Moreover, the need to increase the share of industrial
sector to India’s GDP was one of the important economic challenges for India.
3. Lack in Infrastructure: Although there was a significant
change in the infrastructural development in the country but this was not sufficient to improve the performance of
agricultural and industrial sector. Also, there was a need to upgrade the
existing infrastructure and to modernise
the infrastructure to enhance its efficiency and effectiveness.
4. Poverty and Inequalities: India was trapped in the
vicious circle of poverty and inequality. The colonial rule drained out a significant portion of India's wealth to
Britain. Consequently, majority of India’s population was poverty trodden. This
further exaggerated economic
inequalities across the country.
Question 14:
When was India’s first official census operation undertaken?
India’s first official census operation was undertaken in
the year 1881. After that the census has been conducted after every 10 years. It involves a detailed estimation of
population size, along with a complete demographic profile of the country.
Question 15:
Indicate the volume and direction of trade at the time of
independence.
During the colonial rule, the British followed a
discriminatory tariff policy under which they imposed heavy tariffs
(export duties) on India’s export of
handicraft products, while allowing free export of India’s raw material to
Britain and free import of British
products to India. This made Indian exports costlier and its international
demand fell drastically. India’s export basket
during the colonial rule comprised mainly of primary products like
sugar, jute, silk, etc. and the imports comprised of finished consumer goods like cotton, woolen clothes,
etc, from Britain. As the monopoly power of India’s export and import rested
with Britain, so, more than half of
India’s trade was restricted to Britain and the remaining imports were directed
towards China, Persia, and Srilanka. The opening up of Suez Canal further
intensified the monopoly power of the British over India’s foreign trade. It led to the fast movement of goods
from India to Britain and vice-versa. The surplus generated from India’s
foreign trade was not invested in Indian
economy; rather it was used for administrative and war purposes. This led to
the drain of Indian wealth to Britain.
Question 16:
Were there any positive contributions made by the British in
India? Discuss.
Yes, there were various positive contributions that were
made by the British in India. The contributions were not intentional but purely the effects of colonial exploitation of
the British. The following are the positive contributions made by the British:
1. Introduction of Railways: The introduction of railways by
the British was a breakthrough in the development process of Indian economy. It
opened up the cultural and geographical barriers and facilitated
commercialisation of Indian agriculture.
2. Introduction of Commercialisation of Agriculture: The
introduction of commercial agriculture is an important breakthrough in the history of Indian agriculture. Prior
to the advent of the British, Indian agriculture was of subsistence nature. But
with the commercialisation of
agriculture, the agricultural production was carried out as per the market requirements.
It was due to this factor that today
India can aim at attaining self-sufficiency in food grains production.
3. Introduced Free Trade to India: British forced India to
follow free trade pattern during the colonial rule. This is the key concept of globalisation today. The free
trade provided domestic industry with a platform to compete with the Britain
industries. The introduction of free
trade led to an increase in the volume of India’s export rapidly.
4. Development of Infrastructure: The infrastructure
developed in India by the British proved as useful tool to check the
spread of famines. The telegram and
postal services served Indian public.
5. Promoted Western Culture: English as a language promoted
westernised form of education. The English language acted as a window to the outside world. This has
integrated India with the rest of the world.
6. Role Model: The way and the technique of British
administration acts as a role model for the Indian politicians and planners.
It helped Indian politicians to govern
the country in an efficient and effective manner.
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