KISHAN BHUTANI (9045876022)
INDIAN ECONOMY ON THE EVE OF INDEPENDENCE
The sole purpose of British colonial rule was to use Indian economy for
Britain’s rapidly growing industrial sector. As a result, Indian economy at
the time of independence was in a very bad shape.
COLONIAL EXPLOTATION OF THE INDIAN ECONOMY UNDER THE
BRITISH RULE:
A) COLONIAL EXPLOITATION OF AGRICULTURE SECTOR: Agriculture
was exploited through zamindari system of land revenue.
a) Zamindars were declared as owner of the soil. They were to pay a fix
sum to the government (Peshkash) by the way of land revenue and
they were free to extract as much as they could to the farmers (tillers
of the soil).
b) The farmers (tillers of the soil) or the actual cultivators got minimum
quantity for survival. They were left with no surplus for investment in
agriculture.
c) The Zamindars spend their revenue income on the luxuries of life. No
investment was made for the development of agriculture.
B) COLONIAL EXPLOITATION OF INDUSTRAIL SECTOR: Prior to the
british rule, industrial sector in India was well known for its handicraft
but these were destroyed by the British government in two ways:
a) foreign demand for the Indian handicrafts was destroyed by the way
of heavy duty on their exports.
b) Domestic demand for the Indian handicraft was destroyed by the way
of duty free import of the British goods in the Indian markets.
C) COLONIAL EXPLOITATION OF INTERNATIONAL TRADE: India’s
international trade was exploited through discriminatory tariff policy. It
implied:
a) Duty free export of Indian raw material to fulfill the industrial need in
Britain.
b) Duty free import of British goods to expand demand for British goods
in the Indian markets.
KISHAN BHUTANI (9045876022) Page 1
, KISHAN BHUTANI (9045876022)
On the eve of independence, Indian economy was underdeveloped
economy. As an underdeveloped economy, Indian economy had the
following features:
(i) BACKWARD ECONOMY:
Underdeveloped economies have low per capita income. India has no
exception to it. In 1947-48, per capita income was Rs. 230. People
were poor. They were not getting fair square meals a day. They had
no shelter and clothing. Most of the people were unemployed.
(ii) Poor Infrastructure:
On the eve of independence infrastructural development which
comprised of communication and transport and electricity etc. was
very poor. In 1948, power generation capacity was nearly 2100 MW;
length of railway lines was 53,596 Kms.
(iii) Dependence on Imports:
The country had to heavily depend on imports. Armed forces of the
country also depended on foreign imports. Moreover, several
consumer goods like sewing machines, medicines, oil, bicycles etc.
were imported from abroad.
(iv) Illiteracy and poverty:
Illiteracy was both cause and effect of poverty. Due to illiteracy,
people were unable to use new techniques in agriculture and
industry. They were unable to organize trade and commerce on
modern lines. In 1948, rate of literacy was 18%. Thus 82% of the
population was illiterate.
(v) Agricultural Backwardness:
Indian economy was predominantly agricultural. In 1948, about 72%
population was engaged in agriculture. Moreover, agriculture
constituted 50% of GDP. But agriculture itself was backward.
KISHAN BHUTANI (9045876022) Page 2
, KISHAN BHUTANI (9045876022)
Regarding productivity, it was 710 kg/hectare for wheat and 660
kg/hectare of rice in 1947-48.
(vi) Industrial backwardness:
There was very little development of industries. Large industries used
to produce consumer goods. Small scale and cottage industries were
very less in number. Production of machine was almost nill. For the
bulk of capital goods requirement, Indian industry dependent upon
imports from Britain.
(vii) Stagnant Economy:
During the British period, Indian economy remained almost stagnant.
There was very slow growth of economy. This was clear from the fact
that for almost a century, the average annual growth rate of per capita
income in India was not more than 0.5%.
The high growth rate of population tended to make it difficult to
maintain even the proposed growth rate. In fact poverty was
widespread and about 40% people were living below poverty line.
(viii) Limited urbanization: At the time of independence most of the
population of India lived in villages. In 1948, only 14% of population
lived in urban areas while 86% lived in rural areas. Rural population
lacked opportunities outside agriculture.
AGRICULTURE SECTOR ON THE EVE OF INDEPENDENCE :
A) LOW LEVEL OF PRODUCTION AND PRODUCTIVITY: Production refers to
total units produced, while productivity refers to production per hectare of
land. Both production and productivity were found to be extremely low on
the eve of independence. The British rulers did not give much of attention
to increase irrigation facilities and technological upgradation in India.
B) FORCED COMMERCIALIZATION OF AGRICULTURE:
British rulers initiated commercialisation of agriculture in which they
encouraged the production of cash crops. As a result, Britisher transformed
Indian agriculture into a raw material activity to England. As a result of
KISHAN BHUTANI (9045876022) Page 3
, KISHAN BHUTANI (9045876022)
reduction in the production of food crops and lack of proper policies the
country had to suffer from frequent occurrence of famines.
C) LAND REVENUE SYSTEM UNDER THE BRITISH RAJ: The British
government in India introduce a unique system of land revenue. It set up a
triangular relationship among the government, the owner of the soil and the
tiller of soil. This was popularly known as ZAMINDARI system of land
revenue. Main features are:
Zamindars were declared as owner of the soil. They were to pay a fix sum to
the government (Peshkash) by the way of land revenue and they were free
to extract as much as they could to the farmers (tillers of the soil).
The farmers (tillers of the soil) or the actual cultivators got minimum
quantity for survival. They were left with no surplus for investment in
agriculture.
The Zamindars spend their revenue income on the luxuries of life. No
investment was made for the development of agriculture.
D) ADVERSE EFFECT OF PARTITION:
The partition of the country had also adversely affected the India’s
agricultural production. It created a serious problem of shortage of raw
material for jute mills of Calcutta and textile mills of Bombay and
Ahmedabad. Also, rich food producing areas of the west Punjab and
Sindh went to Pakistan which created food crises in the country. INDIA
got 82% of population and 65% of food grains area.
E) HIGH DEGREE OF UNCERTAINTY: Agriculture showed a high degree of
uncertainty because agriculture is depends upon rainfall. Good rainfall
increases the production while poor rainfall decreases the production. No
efforts are made under the british rule to develop agriculture means.
F) DOMINANCE(EFFECT) OF SUBSISTENCE FARMING: Subsistence farming
is a form of farming in which the crops are produced to provide for the
basic needs of the family. There is little surplus left for sale in the market.
Hence backwardness and poverty dominated.
INDUSTRIAL SECTOR ON THE EVE OF INDEPENDENCE:
KISHAN BHUTANI (9045876022) Page 4
INDIAN ECONOMY ON THE EVE OF INDEPENDENCE
The sole purpose of British colonial rule was to use Indian economy for
Britain’s rapidly growing industrial sector. As a result, Indian economy at
the time of independence was in a very bad shape.
COLONIAL EXPLOTATION OF THE INDIAN ECONOMY UNDER THE
BRITISH RULE:
A) COLONIAL EXPLOITATION OF AGRICULTURE SECTOR: Agriculture
was exploited through zamindari system of land revenue.
a) Zamindars were declared as owner of the soil. They were to pay a fix
sum to the government (Peshkash) by the way of land revenue and
they were free to extract as much as they could to the farmers (tillers
of the soil).
b) The farmers (tillers of the soil) or the actual cultivators got minimum
quantity for survival. They were left with no surplus for investment in
agriculture.
c) The Zamindars spend their revenue income on the luxuries of life. No
investment was made for the development of agriculture.
B) COLONIAL EXPLOITATION OF INDUSTRAIL SECTOR: Prior to the
british rule, industrial sector in India was well known for its handicraft
but these were destroyed by the British government in two ways:
a) foreign demand for the Indian handicrafts was destroyed by the way
of heavy duty on their exports.
b) Domestic demand for the Indian handicraft was destroyed by the way
of duty free import of the British goods in the Indian markets.
C) COLONIAL EXPLOITATION OF INTERNATIONAL TRADE: India’s
international trade was exploited through discriminatory tariff policy. It
implied:
a) Duty free export of Indian raw material to fulfill the industrial need in
Britain.
b) Duty free import of British goods to expand demand for British goods
in the Indian markets.
KISHAN BHUTANI (9045876022) Page 1
, KISHAN BHUTANI (9045876022)
On the eve of independence, Indian economy was underdeveloped
economy. As an underdeveloped economy, Indian economy had the
following features:
(i) BACKWARD ECONOMY:
Underdeveloped economies have low per capita income. India has no
exception to it. In 1947-48, per capita income was Rs. 230. People
were poor. They were not getting fair square meals a day. They had
no shelter and clothing. Most of the people were unemployed.
(ii) Poor Infrastructure:
On the eve of independence infrastructural development which
comprised of communication and transport and electricity etc. was
very poor. In 1948, power generation capacity was nearly 2100 MW;
length of railway lines was 53,596 Kms.
(iii) Dependence on Imports:
The country had to heavily depend on imports. Armed forces of the
country also depended on foreign imports. Moreover, several
consumer goods like sewing machines, medicines, oil, bicycles etc.
were imported from abroad.
(iv) Illiteracy and poverty:
Illiteracy was both cause and effect of poverty. Due to illiteracy,
people were unable to use new techniques in agriculture and
industry. They were unable to organize trade and commerce on
modern lines. In 1948, rate of literacy was 18%. Thus 82% of the
population was illiterate.
(v) Agricultural Backwardness:
Indian economy was predominantly agricultural. In 1948, about 72%
population was engaged in agriculture. Moreover, agriculture
constituted 50% of GDP. But agriculture itself was backward.
KISHAN BHUTANI (9045876022) Page 2
, KISHAN BHUTANI (9045876022)
Regarding productivity, it was 710 kg/hectare for wheat and 660
kg/hectare of rice in 1947-48.
(vi) Industrial backwardness:
There was very little development of industries. Large industries used
to produce consumer goods. Small scale and cottage industries were
very less in number. Production of machine was almost nill. For the
bulk of capital goods requirement, Indian industry dependent upon
imports from Britain.
(vii) Stagnant Economy:
During the British period, Indian economy remained almost stagnant.
There was very slow growth of economy. This was clear from the fact
that for almost a century, the average annual growth rate of per capita
income in India was not more than 0.5%.
The high growth rate of population tended to make it difficult to
maintain even the proposed growth rate. In fact poverty was
widespread and about 40% people were living below poverty line.
(viii) Limited urbanization: At the time of independence most of the
population of India lived in villages. In 1948, only 14% of population
lived in urban areas while 86% lived in rural areas. Rural population
lacked opportunities outside agriculture.
AGRICULTURE SECTOR ON THE EVE OF INDEPENDENCE :
A) LOW LEVEL OF PRODUCTION AND PRODUCTIVITY: Production refers to
total units produced, while productivity refers to production per hectare of
land. Both production and productivity were found to be extremely low on
the eve of independence. The British rulers did not give much of attention
to increase irrigation facilities and technological upgradation in India.
B) FORCED COMMERCIALIZATION OF AGRICULTURE:
British rulers initiated commercialisation of agriculture in which they
encouraged the production of cash crops. As a result, Britisher transformed
Indian agriculture into a raw material activity to England. As a result of
KISHAN BHUTANI (9045876022) Page 3
, KISHAN BHUTANI (9045876022)
reduction in the production of food crops and lack of proper policies the
country had to suffer from frequent occurrence of famines.
C) LAND REVENUE SYSTEM UNDER THE BRITISH RAJ: The British
government in India introduce a unique system of land revenue. It set up a
triangular relationship among the government, the owner of the soil and the
tiller of soil. This was popularly known as ZAMINDARI system of land
revenue. Main features are:
Zamindars were declared as owner of the soil. They were to pay a fix sum to
the government (Peshkash) by the way of land revenue and they were free
to extract as much as they could to the farmers (tillers of the soil).
The farmers (tillers of the soil) or the actual cultivators got minimum
quantity for survival. They were left with no surplus for investment in
agriculture.
The Zamindars spend their revenue income on the luxuries of life. No
investment was made for the development of agriculture.
D) ADVERSE EFFECT OF PARTITION:
The partition of the country had also adversely affected the India’s
agricultural production. It created a serious problem of shortage of raw
material for jute mills of Calcutta and textile mills of Bombay and
Ahmedabad. Also, rich food producing areas of the west Punjab and
Sindh went to Pakistan which created food crises in the country. INDIA
got 82% of population and 65% of food grains area.
E) HIGH DEGREE OF UNCERTAINTY: Agriculture showed a high degree of
uncertainty because agriculture is depends upon rainfall. Good rainfall
increases the production while poor rainfall decreases the production. No
efforts are made under the british rule to develop agriculture means.
F) DOMINANCE(EFFECT) OF SUBSISTENCE FARMING: Subsistence farming
is a form of farming in which the crops are produced to provide for the
basic needs of the family. There is little surplus left for sale in the market.
Hence backwardness and poverty dominated.
INDUSTRIAL SECTOR ON THE EVE OF INDEPENDENCE:
KISHAN BHUTANI (9045876022) Page 4
