CH-1 : INDIAN ECONOMY AT THE EVE OF INDEPENDENCE
Battle of Plassey Commercialisation of Crops
Fought in = 1757 Food Crops Cash crops
British East India Company expanded its rule Commercialization of agriculture meant shifting from
over India after this War. food crops to cash crops for market sale. Some
After 200 years of British rule, India became regions saw higher cash crop production, but farmers
independent on 15th August 1P47. remained poor as British industries used these crops
for textiles.
They wanted to Exploit India’s natural and Industrial Sector
human resources for the benefit of Britain.
Under British rule, India couldn’t develop industries.
British Designed Economic Policies to benefit
Earlier, it was famous for handicrafts in textiles,
Britain, not India.
metals, and gems, but British policies destroyed these
It Transformed India’s economy:
industries.
- India became an exporter of raw materials
(cotton, silk, jute).
State of Industrial Sector OR
- India was forced to import finished goods Shortfalls of British Industrial Policy In India
from Britain (textiles, machines). De-Industrialization – British policies destroyed
It Led to the decline of Indian industries. handicrafts and stopped modern industries. India
exported raw materials and imported British
Low Level of Economic Development
goods.
British government did not make proper efforts Decline of Handicrafts – Artisans lost jobs,
to estimate India’s national income 2 Per moved to villages, and depended on cheap British
Capita Income. goods.
First Estimation by = Dadabhai Naoroji.
No Heavy Industries – British rule blocked the
Other experts = William Digby, Findlay Shirras, growth of iron, steel, and machinery industries.
V.K.R.V. Rao, R.C. Desai, Wadia 2 Joshi, and Low GDP Contribution – Industrial growth was
K.T. Shah also attempted estimates, but their slow and added little to the economy.
results were conflicting. Limited Public Sector Growth – Railways and
Dr. V.K.R.V. Rao’s estimates were considered communication were built for British benefit, not
the most reliable. Real GDP < 2% p.a. India’s progress.
Growth was very low Causes of Decline of Handicraft Industry OR
Per capita 0.5% p.a.
“The traditional handicrafts industries were
Agriculture Sector ruined under the British Rule”
Nearly 85% of India’s population dependent Discriminatory Tariff Policy – British taxed
on agriculture. Indian handicrafts but not their own goods,
Agriculture did not improve much during causing losses for Indian artisans.
British rule. Machine-Made Goods – Cheap, high-quality
This sector was facing stagnation and British products replaced Indian handicrafts.
deterioration during the British rule. Changing Demand – People started preferring
Causes of Stagnation h Low Productivity British goods over Indian ones.
Zamindari System – British landlords charged Railways Helped British Trade – Railways made
high rents, making farmers poor while it easier to sell British goods across India,
collecting money for the government. reducing the market for Indian products.
Poor Irrigation – Farming depended on rain Some Modern Industries
since the British didn’t build proper irrigation ftodern industry started = late 1Pth century.
systems. Cotton mills (Indian-owned)= ftaharashtra
Old Farming Methods – Farmers used simple and Gujarat.
tools without fertilizers or machines, leading to Jute mills (British-owned) = Bengal.
low crop production. TISCO founded in 1P07 in Jamshedpur.
Lack of Money h Resources – Farmers had no Sugar, cement, and paper = After WW II,
money for fencing, drainage, or soil care,
making farming difficult.
Battle of Plassey Commercialisation of Crops
Fought in = 1757 Food Crops Cash crops
British East India Company expanded its rule Commercialization of agriculture meant shifting from
over India after this War. food crops to cash crops for market sale. Some
After 200 years of British rule, India became regions saw higher cash crop production, but farmers
independent on 15th August 1P47. remained poor as British industries used these crops
for textiles.
They wanted to Exploit India’s natural and Industrial Sector
human resources for the benefit of Britain.
Under British rule, India couldn’t develop industries.
British Designed Economic Policies to benefit
Earlier, it was famous for handicrafts in textiles,
Britain, not India.
metals, and gems, but British policies destroyed these
It Transformed India’s economy:
industries.
- India became an exporter of raw materials
(cotton, silk, jute).
State of Industrial Sector OR
- India was forced to import finished goods Shortfalls of British Industrial Policy In India
from Britain (textiles, machines). De-Industrialization – British policies destroyed
It Led to the decline of Indian industries. handicrafts and stopped modern industries. India
exported raw materials and imported British
Low Level of Economic Development
goods.
British government did not make proper efforts Decline of Handicrafts – Artisans lost jobs,
to estimate India’s national income 2 Per moved to villages, and depended on cheap British
Capita Income. goods.
First Estimation by = Dadabhai Naoroji.
No Heavy Industries – British rule blocked the
Other experts = William Digby, Findlay Shirras, growth of iron, steel, and machinery industries.
V.K.R.V. Rao, R.C. Desai, Wadia 2 Joshi, and Low GDP Contribution – Industrial growth was
K.T. Shah also attempted estimates, but their slow and added little to the economy.
results were conflicting. Limited Public Sector Growth – Railways and
Dr. V.K.R.V. Rao’s estimates were considered communication were built for British benefit, not
the most reliable. Real GDP < 2% p.a. India’s progress.
Growth was very low Causes of Decline of Handicraft Industry OR
Per capita 0.5% p.a.
“The traditional handicrafts industries were
Agriculture Sector ruined under the British Rule”
Nearly 85% of India’s population dependent Discriminatory Tariff Policy – British taxed
on agriculture. Indian handicrafts but not their own goods,
Agriculture did not improve much during causing losses for Indian artisans.
British rule. Machine-Made Goods – Cheap, high-quality
This sector was facing stagnation and British products replaced Indian handicrafts.
deterioration during the British rule. Changing Demand – People started preferring
Causes of Stagnation h Low Productivity British goods over Indian ones.
Zamindari System – British landlords charged Railways Helped British Trade – Railways made
high rents, making farmers poor while it easier to sell British goods across India,
collecting money for the government. reducing the market for Indian products.
Poor Irrigation – Farming depended on rain Some Modern Industries
since the British didn’t build proper irrigation ftodern industry started = late 1Pth century.
systems. Cotton mills (Indian-owned)= ftaharashtra
Old Farming Methods – Farmers used simple and Gujarat.
tools without fertilizers or machines, leading to Jute mills (British-owned) = Bengal.
low crop production. TISCO founded in 1P07 in Jamshedpur.
Lack of Money h Resources – Farmers had no Sugar, cement, and paper = After WW II,
money for fencing, drainage, or soil care,
making farming difficult.
