- 1757

’Battle q Plamey
-’areat pivide- 192 |
CHAPTER 9 of Dernagaphe -’Befoie 1921 Fist stage traniion

Indian Economy on The

Eve of Independence
LEARNING OBJECTIVES
What is Microecononics?
Central Problenms

Chief concepts of this introductory chapter - 9.1 Some of the features of the Indian
A brief introduction of the state of
Indian economy economy on the eve of independence are:
on the eve of independence
1. Stagnant economy : most of the estimates done
Main features come up problems and policies of by notable individuals ( Dadabhai Naoroji, Findlay
agriculture institutional aspects and new agricultural Shirras, R.C.Desai and few others) who attempted
strategy to estimate Indias national and Per Capita Income,
Industry (IPR 1956 SSI- role &importance) revealed that the country's growth of aggregate real
output during the first half of the 20th century was
Foreign trade less than 29% and growth in per capita output per
Overall Features of Indian Economy on The year was bigger 0.59%.
Eve of Independence 2. Backward economy : in 1947- 48, the per capita
Indian economy in the ancient period was a vibrant and income in India was just Rs. 230. The bulk of the
prosperous economy. On the agricultural front, it was self population was very poor, without sufficient food,
contained rural economy where cultivators themselves clothing and shelter. Widespread unemployment
were the owners of land. Industrial sector what's famous caused by the destruction of handicraft industries
throughout the world for its handicraft products. Indian was an important factor contributing to poverty.
exports enjoyed global reputation. The silk and coton textiles 3. Dominance of agriculture: Nearly 72% of the
were famous for their fne quality and the metal and precious country's working population was engaged in
stonework were famous for excellent craftsmanship. Spices agriculture However, the contribution of agriculture
were of high quality. to GDP was only 50%, indicating the backwardness
The advent of British rule however marked the beginning of this sector this sector suffered from low
of a systematic exploitation of the Indian economy. The productivity, owing to which it had low contribution
agricultural sector was exploited as a source of revenue. The to GDP.
industrial sector was destroyed by exploiting the domestic 4. Bleak industrialization: By the time of
market for the British products. Export of raw material was
encouraged to promote supplies to the British industry. independence, small- scale and cottage industries
Import of British goods was encouraged to give impetuous were almost ruined. Heavy industry showed a
bleak growth, and for the bulk of capital goods
to the industrial revolution which was then happening in
Britain. requirements, we were dependent upon imports
from Britain.
Due to the systematic exploitation of the agricultural and 5. Heavy dependence on imports: India was heavily
industrial sectors and restructuring of India's foreign trade in
favour of the British economy, India changed from a vibrant
dependent upon imports, particularly for machinery
and related equipment of production. Several
economy to a stagnant in a backward economy. consumer goods like sewing machines, medicines,
 9.2
exhibited Indias
stagnationlowpointed
Independence 9.2
Limited6.
hardly
on interest the Lackindustry.
ol infrastructure.
sFlood- British(cultivation
the cash beforeForced Zamindari government to Agriculturaleconomy.protection
agricultural of the to Indian Ihus, ivity mode and CapiSuchtalist of Semi- This urban in equpmen. detenethe
which ranfall
among
the Exploitive
backwardness three
ports the to ol
promote British the productwe vil Population independence dependentJbroad
ages kerosene
economic capitalisitndependence,compounded
colonial of crops tiller the Indian
control,available. level principal came ext ent of an te udal areas
in
and promotinginvestment
commercialization to of
the British economy can production economv: Ared
could for for shift system government,the inland of sector and
economy. the up, sav leads
economy lacked while 1948.In heav1lv od.
organisation:
government government . it
development. econom:
torbvces,
Permanent
therefore th e India productivity promotion bulk
drainage
have Agriculture self-consumption) soi l.
of settlement characteristics;
of Sector economy process Pos t coul d was that tomodes ces
led
continued investmentagriculture
in
market from
Land Thi s
the up
set Indias (on
the
It and serve
of characterised the
backwardness.
on leads has
was
Itwas
ofthe neither Indan
ther
to 86%
oprortunities
onl
lived 14%
y
the
of on
lorign ofe..
to and means to
subsistence of was
settlement. a agriculture on rather directed ofwasTelegraph to a povert.
increased de- was
zamindars
or cope
agriculture: popularly owner
triangular system: eve
these of economi
the colonial Even the It eve
c col oni al was production low seni
mixture wholeconomv ly outsid e
in
populatwn IWhen count
the
r wel wer
mports imported
productivity dependent
heaviy
salination irrigation
be
of
to infrastructure:
agricultural
in
wit h
cultivation
to
thecultivation relationship the
of independence)
The characteristics
well
as
The
Eve
than
exploitation
the towards
devel o
wer
ped
ethough
develoipedndependence. ivity.
interest
wi th product
of

Feudalifsetuicdalistic
leudal
of teudal
on areas of
population Inda
rural
agriculture Inda tor
uncertain. took needs Farmers known soil interests rai lways. low cconomy lived lvgoted its
of were British as Indian
olonlv
le vel LOw nor he
Rural in most Iom
the no of of asand its of the of
d ot
produced and products
woollen an
importer
and Under
the
Goods
Exporter 1.the 9.4.1
poor
adversely trade But
foreign
Indias
trade.

Following affected tariff the

and when
India
has
India
times.

of
Foreign
endedForeign Trade
Trade9.4 inareForei
a gn

industrial revolTo Briutitoanin.needsin Tothe Government

durinTwo-
British . Decay
g fold
de-impliniedusdthitnwog"tsSrsyitthaasettulesimsIndustrial
aticon" Sect9.3 the or a is to Moil
wuerild1ng Smal wedge A
CHAPTER9:
suchcolonial products.exploit Britioppor
sh imotnvesivtuetmnientties.Bleak industry F a rmin g ho ld1ng b Ih at
industrial backwardpnrevsailed and
in been
tclothes
he growth
of exploit of lit le
lack provile
as restrictive this trade, Indi a both toking:
industrial India's behind growth OWing
Primary were of
factories
finished
and
ofraw
silk,
rule, the
imposed important
an
eminence.
since had products India It Rule
of
world
surofplus tor was me s
up mal low betwe n Econom)
structure, was in lak en outasput most
of cotton, India Products of
capital
Britain. consumer
became
foreign
were policies
e volumeand theby of trading
thcomposition
occupied
ancient of
Britain. a
as inputs weal (industrialisai
th therequired
of to
discriminatory
India.
systematic
modern famous
sector commercial let the
tor basic n ost/ meanshere aawel atland oWners
sale needs Iragmented.
on
The
goods wool, and times. a potential in ra w
of
industry during
descrih. is apiece
as
unecon
as high
holdings } of
commodity colonial place emergny dominaled
Ipovertyoutlook. in the \nde0er Eve of
an trade: reasons the fulflto traditional cost.
exporter Importer
the
ligkhtegoodssugar, nation
But of material rulk thethatterm means
of of sol
wake the As
were
indigos
like government.i eminence
the market the now policies British market.
(amilh. Landho
and
since Fragten,
.\mgy Subsiste
o of productot British of and llers

cotton. behind industr primar to handir

machine p Finis ancier inth, tor lack Thig
 5.1 revealed very Indiaofstage collected
demographic 9.population was iVarious
throughrst ively. Demographic
respect features
and 9.5 lexpenses huge expensesHuge Indiaof
. .
ofhghtGovernment Also, werSeveral
e colthiBsuot nial An adwith (rade andBriMonopoly
taBritain'
nControlCHAPTER
and Both the Life thousand ofhighly largePublic
inadequate. about7%. ofThe The On the
high. began the in
nor details
death
Demographic
Condition
of
this.pursuit
wa rsadministrative th is
Scarcely
surplus
i nip ortant
Drain
Persia few aimports.
was
mtensiBrheidtish
s
present 63 grew Though the after first rate led in s surplus essential period of
40 expectancy
birth per chunks femaleoverall
thUnevenness
e stagnant a ( maintaincd
lndia's (Iran)restricted
other
per health wereconditions to their to available 9
thousand. at rate 1921. stage about wermanage
e characteristic Due :Indian
thousand rate 66 contrast in condition
literacyliteracy a the
was came was
of eve rate suftering of of very and drain incurredof
commodities the Wealthcontrolcountries
The to
and years. was facilities However, census athe
demographic not in at opening tothis, a
population ofpopulation
in high during
backward their
the generation a monoply Economy
death very Infant level level of1.2%India's population of used huge over like; Britain
of to nearly Indianpolicy by domestic of more
persons present
low mortality were was was was
independence, up from neither in the colonial
the were Iin cost foreign lndia' s of
rate like than
SuezChina, while control
or toThe growth
population
growth. 1881. economy.48British wealth. of incurred
any to of on
44 were either at less the certain transition. imperialism. tood the
respectively. were years infantavailable, when
negligible a than as the Before
British
of and British developmental
rule market. large a
trade toreign
Canal the half
0ver
Ihe
rate year attotal country's Ceylon
very follows: 40 rule grains, throughout rest of
inmortality unavailable 16%. limitations,
1951.
this per Both Government in by export trade. in lndia'sIndias ve
high contrast was population The 1921, India exhibited India. the I869 (Sri was of
low stáge thousand birth economy.
kerosene, Independence
218 second India surplus. allowed exports
foreign
at
the were British activity further Lanka)
48 to rate per to rate was
it
rate
al
Also,
to the
The
the important beganBritishRailways 2. it. the the Theseason.
exporting during
rainy
modern Roadsunderstood The provide
Roads 1. interests.
colonial However, realthe Intrastructure
telegraphs
developed.
infrastructure growth
development
intrastructure tor well agriculture,
Infrastructure
Infrastructure 9.7
decline a insuchImanufacturing
parts There and remained
dccountedIndia.subsistence Accordingly,
During lesser Structure
0ccupational
OccupationalGreater 9.6
followingrailways countryside army roads state growth as agricultural
itsrulers of as 15-20%
constructed basic of elements existed exh1bited availability
and It
enabled contribution operation within weretransport. of other Madras Orissa, the
with and in at for dependence
thereby affected
two introduced infrastructure amenities suchcomprises of is thworkforce
e Rajasthan respectively. a colonialagriculture and
to built a
development refer a and high th e structure
ways the India the motive industries. country. a of presidency. growing its less of
breakpeople in It
before as precondition social to percentage
the onl y was help railways, services largest
backwardness. of as land
of
1853. nearest and to the period, an on on
structure behind of change 70-75%
geographical to Britishers. railways transportingserveindependence to very of
under
the
Under such elements and
while regional occupation was per the
undertake following Bombay share head
It
is
railway diticult
people
this portindustries of
to which
of Punjab sectors the taken agIculture eve
of
considered the the
a work the of
of for ol
in the
developmentbut per country.
the disparity occupational
th e
the
India station purpose points colonial economic serve of states
witnessing accounted the The largely
for the
and long Indian raw to colonial
to transport, economic force and work ndependence
proht. tarnung
cultural reach were sub whichDevelopment Bengalwhich agriculturalwork ds
distance
economy
as in materials or of
rule serve period,
as
a dependent with force as
suggested by
one 1850 t he
mobilising rural not wasnotto posts help foundation an for forcestructure a
and change witnessed increase few population.
barriers. port can various were onl v and means
travel ofand from areas fit in social whichsector innphed
in the fo r for be and basic the the
states
th e 93
it of as on 10 of of
 Multiple
1. Howdid 5. 4. 3. Frequently systems.
revenue
economy
GrowingDeveloped
(deconomy
) (a)Indian Britain? 2. 1. (Landlord)
peasants.and
Zamindari
Zamindari
StatementsKey independence
before Conclusion9.8
economic
to Why?Indian has Prevalence purpose
Developing
economy 6) backwardness.
the Legally What WhatBritishWhere expensi
TelevConmunication
e Moderninaugurated
graphy 4.
inThe serve coast.
1932colonialuneconomical o0lwWatereighed3.
waterThe The
inland So,
Choice success been the 9.4
economy Britain's
discriminatory agriculture is do
Zamindarimeant you rulethere
SystemSystenm: country
policies. maintaining
of
of
system linepostal by transport.colonial
The the
abolished asked the
Igovernment
establishing main
and socialvil age
which I
Questions of mean in were rampant
were required wasystem
s aviation colonial as rulers Air by fostered
the
by India any of
under industrial
continues subsistence by Questions
The
- enormous.
The
electricopened Purpose thein Transporl economi
took country'benelits
s es y
adversel
positive Known as three social law interest. commerci
British in
system ? British welfarepoverty and
started sector Tata also case
tradeindependent Population in
telegraph I857. in inshowed behin d measures
hugeovided Indiaflae.incted
(MCQ's)revolution
side Government,
one
major and
and
order. Ai
India.rlines. wate rt of
twhe ays, pr cialisation
rule policy off
agriculture? (FAQ's) orientation
economic The India Iway their coast lor economic by the
be components
of unempl o yment in
in land census? effects introduct
was:
India ion in Thus, to canal atthe
development times, loss. the Indianof
contribute
Great
in India.
a
staterevenue
of
major
the
Zamindar
of
challenges of served
1837.
The
inthe
this air development
on
the also
self-sut iciency
Railways
ofYet Exercise
the land
the
public after of
the the first
transpor
way t was Oris aproved agriculturtehe
of
it of was
(6))Importer
productsfrproducts
British
4.
om from (a) in (d)) (agriculture?
c) (b) (a) Which Tertiary
(d)
sector
3.
(c) Primary
Secondary
sector sector
(b) (a)) rule
Most of
2. also their
occurrences,
cause hurri clanes,
andslidIndependence
es,NatuBrralitishers til itsofpowerno is over
ful Coloanial die. life Lile infant age
members number detinitionI,ntant to
and works trom death model
CHAPTER
products
exporterand
and Importer
India
All Lack Lowsystem Equally
own
resour ces. ju stic e expectancExy peclancymor: talidityvided Mortalitycor elate Demographi 9:
natinion,weakerRegime: ofa yearsof
products
exporter rulers'
was
of toabove
the
of of
investment
level factor
of
dependent
in
was

India's
damageaccordevents Calafimires,ties:
to
tornadoes,
or
spont aneous India and count it
particular
the ry A is
rate th
by
e
the
basedperson The is Rate: with birth
apthreep-irnedmuissetrial Indan
number
on rates
to
low
used
to

number stages repTrresaenstition:Eco my

a
of make ofland air
because or
finished Bra of Brntpolicy technology
ofprimary caused all
the
phenomenon
by Earthquakes,
ice was smal
the ler rule
on termn also tha t to
an
econon iand the
primaryfinished toBrt population
towards
India
settlement
above which
on pollution) ofstorms.
certain tree
of
1947,15thon
e weaker
under ruled the the population
by
estimate
an
can
"life
expect
called
of
children Tindustrial1zed
he birth
of
ye ofinfant
industrial
morta
death
Demographic on
low floods, , thnation
e colorulniael.
nation wealthy infantthe live and movement of The
mainly: sectors
that
Natural limbs groupwil expectancy" aredeath
rates
sector acts colonial of to nderu birthsdying Eve
industrializs productivt during happen volcanicAugust, e would sapowerful
is or the live developme
rtallty
rale rates as
a
of averay counlY \ndere
of
death
for man calamitit,falling, regime colony thFor
e be By
reler hal |
to in cerup be

liaBrt
w deht
(ve enpa ra a
Br w d