Chapter 1:Indian Economy on The Eve Of Independence

Agriculture Sector On the Eve Of Independence: Backward , Stagnant & Non -vibrant

Features of Agriculture: Backward , Stagnant & Non -vibrant

• Low Level of Productivity: productivity of rice was nearly 20 times low & productivity of wheat was 12 times low as
compared to 2008.
• High dependence on rainfall: lack of permanent means of irrigation
• Poor relation between land owner and cultivator : zamindar charge high rent from cultivator ;
• Lack of new technology

Causes of backwardness Of Agriculture

• Zamindari System: introduced by British govt, three parties – British govt at top, zamindars (land owner) at
middle , cultivator at bottom
British Govt charged fixed rent from zamindars;
Zamindars charge high rent from cultivators
Cultivator (farmers) were in poor condition due to high rent
• Commercialisation of agriculture: forced to grow Indigo ; shift from foodcrop to cash crop.
• Partition of India: most of the fertile land of the Punjab given to Pakistan; bulk of fertile land for production of
jute went to east Pakistan

Industrial Sector On Eve Of The Independence:

Systematic de-industrialization—policy framed by British; to destroy Indian industry ; by imposing high tax on
Indian goods, no tax on British good.
Motive behind Systematic de-industrialization
• to make India a supplier raw material (primary products ) to Britain;
• to make India a market of British goods

Causes of Decay Of Indian handicraft Industry

•Discriminatory (different ) tariff(tax) policy: No tax on British goods ; but high tax on Indian goods; so British
goods were cheaper ;Indian goods were expensive; demand of Indian goods decreased.
•Removal of Princely Courts: British govt ended rule rajas &maharaja; as a result financial help to Indian
industry stopped
•Competition with machine made products: British goods were machine made ; so cheaper & good in quality ;
whereas Indian goods were hand made; so high in cost and low in quality. Demand of Indian goods decreased
•British culture & style : Indian adopting british lifestyle; demand for British products increased , demand for
Indian goods decreased
These are the reason for destruction of Indian Industry.

A little GROWTH OF MODERN INDUSTRY under British rule

•few textile mills, paper mills iron & steel mills , sugar , cement factories were started under british rule, set up
by private Indian businessmen, not by the British Govt; due to World War I & II.
• lack of capital good industries ; requires huge investment , not possible for Indian Private Businessmen to
invest
•Under British Rule- in Public sector development of infrastructure was done ; Railways, power generation,
Ports, means of communication , for administration purposes and for expanding the market of British Goods.

FOREIGN TRADE UNDER THE BRITISH RULE

•Change in composition(types) of Goods: Before British, India was a exporter of finished goods; like fine
cotton, silk, iron goods, wooden goods, ivory work, precious stone, metal work; but under British rule India was
now the exporting of raw material & primary products
•Change in status: India became exporter of raw material & importer of finished goods.
•Change in direction: before British govt India's foreign trade was with all countries; under British rule it was
with Britain only (more than 51% trade); opening of Suez Canal in 1869; led to monopoly control ; it reduced
the cost of transportation ; reduced distance between India & Britain
•Surplus Balance Of Trade(BOT): not used for development of India ; used for administration expenses and
war expenses of Britain.
 DEMOGRAPHIC PROFILE OF INDIA DURING BRITISH RULE:
•High Birth rate nearly 48 per thousand.
•High Death rate nearly 40 per thousand
•Low Growth rate of population 8 per thousand per annum.
•High Infant mortality rate 218 per thousand(no. of death of children before completing age of one year)
•Low life expectancy 44 years
•Low Literacy rate 16 %; low female literacy rate 7 %.
• the economic & social backwardness of Indian economy
• lack of public health facilities,
•gender bias in the society,
•mass poverty.
Additional Info for MCQ
•Population census was first conducted under British rule in 1881.
•1921 is called the YEAR OF GREAT DIVIDE after 1921 the growth rate of population increased

OCCUPATION STRUCTURE ON EVE OF INDEPENDENCE:

Meaning:-Occupation structure refers to the distributiuon of working population across primary , secondary
and tertiary sectors of the economy.
Primary sector: 72.7%, secondary sector: 10.1% , Tertiary Sector 17.2 %
Observations
•Agriculture was main occupation: - 72.7% working population was in agriculture
cultivation was for self- consumption not for sale in market.
•Low growth of industries : 10.1 % working population was engaged ; lack of manufacturing industries in india.
•Tertiary sector nearly 17% working population- located in coastal areas
• regional variation - punjab & rajasthan were more dependent on primary sector, Maharashtra , Bengal ,
Madras showed the shift from Primary to secondary & tertiary sectors.

INFRASTRUCTURE ON EVE OF INDEPENDENCE

There was some infrastructural development under British Rule in following areas:
•railways; motive: to transport british finished goods to interior of India; to increase the size of market for
British goods
•posts & telegraph: motive - for easy and smooth administration by British govt
•sea ports: motive-export of raw material to Britain & import of finished goods from Britain
•roads: motive—for easy transportation of raw material from different parts of country to sea ports, to carry
arms and weapons

IMPACT OF RAILWAYS IN INDIA

Positive side effects of railways & British rule
•reduced distance among people;
• commercialisation of agriculture
•it facilitated the expansion of market
• check on famines in India as food supplies could be sent to drought areas
•Shift from batter system of exchange to monetary system of exchange
•efficient administrative set up.