British Exploitation of the Indian Economy

12 Questions

What was the growth rate of India's aggregate real output during the first half of the twentieth century as per most estimates?

Less than 2%

In 1947-48, what was the per capita income in India?

$230

What percentage of the working population in India was engaged in agriculture?

72%

What was a major factor contributing to poverty in India before independence?

Widespread unemployment

What percentage of the Indian population lived in urban areas at the time of independence?

14%

Why was the Indian economy described as a semi-feudal economy on the eve of independence?

It had a mixture of feudalistic and capitalist modes of production

What impact did the British rule have on the Indian economy?

Stagnation and backwardness

What was the primary focus of the British in exploiting the Indian economy's agricultural sector?

Generating revenue

How did the British rule affect India's industrial sector?

Destroyed it by promoting British products

What strategy did the British employ to promote supplies to their industry?

Encouraged export of raw materials

Who were some notable individuals mentioned in the text who tried to estimate India's national and per capita income?

Dadabhai Naoroji and William Digby

On the eve of independence, how would you describe the Indian economy based on the information provided?

Stagnant and backward

Study Notes

Impact of British Rule on Indian Economy

The British rule marked the beginning of systematic exploitation of the Indian economy.
The agricultural sector was exploited as a source of revenue.
The industrial sector was destroyed by exploiting the domestic market for British products.

Features of Indian Economy on the Eve of Independence

Stagnant Economy: The Indian economy showed little or no growth in income, with a growth rate of less than 2% and per capita output per year of 0.5%.
The standard of living was miserably low, with epidemics and famines recurring.
The British government never attempted to estimate India's national and per capita income.

Backward Economy

Low Per Capita Income: In 1947-48, the per capita income in India was just 230.
The bulk of the population was very poor, without sufficient food, clothing, and shelter.
Widespread unemployment, caused by the destruction of handicraft industries, contributed to poverty.

Dominance of Agriculture

Agricultural Sector: Nearly 72% of the country's working population was engaged in agriculture.
The contribution of agriculture to GDP was only 50%, indicating the backwardness of this sector.
The sector suffered from low productivity, leading to low contribution to GDP.

Industrialisation

Destruction of Handicrafts: Prior to the British rule, India's industrial sector was well-known for handicrafts, but it was systematically destroyed by discriminatory British policies.
By the time of independence, small-scale and cottage industries were almost ruined.
Heavy industry showed a bleak growth, and the country relied heavily on imports from Britain for capital goods requirements.

Dependence on Imports

Heavy Dependence: The country was heavily dependent on imports, particularly for machinery and related equipment of production.
The armed forces also depended heavily on foreign imports for most of the defence equipment.
Several consumer goods, such as sewing machines, medicines, kerosene oil, bicycles, etc., were imported from abroad.

Urbanisation

Limited Urbanisation: At the time of independence, the bulk of the population lived in villages.
In 1948, only 14% of the population lived in urban areas, while 86% lived in rural areas.
Rural population lacked opportunities outside agriculture, compounding their poverty.

Semi-feudal Economy

Mixed Economy: On the eve of independence, the Indian economy was a mixed economy or a semi-feudal economy, with a mixture of feudalistic and capitalist modes of production.
Feudalistic mode of production leads to low productivity, contributing to backwardness.