Impact of British Rule on Indian Economy

• The sole purpose of the British colonial rule in India was to reduce the country to being a raw material supplier for Great Britain's own rapidly expanding modern industrial base
• Another purpose was to transform the country into a consumer of finished industrial products from Britain
• India was also turned into a sprawling market for the finished products of British industries to ensure their continued expansion
• Commercialisation of agriculture was coercively introduced by the Britishers
• The aim of commercialisation of agriculture was to support the British industries
• Cheap imports of British manufactured goods increased in India
• The growth rate of the industrial sector was very small
• India was reduced to be a mere exporter of raw material
• India faced a shortage of locally made goods
• Restrictive policies of commodity production, trade, and tariff pursued by the colonial government adversely affected the structure, composition, and volume of India's foreign trade
• Under the colonial regime, basic infrastructure like railways, posts, and water transport developed; the real motive behind the development was to subserve various colonial interests
• During colonial rule, mortality rates and infant mortality rates were very high
• The British never focused on improving public health facilities in India
• During the colonial period, the overall mortality rate was very high in that the infant mortality rate was alarming, about 218 per thousand, in contrast to the present infant mortality rate of 33 per thousand

Life Expectancy

• Life expectancy was also very low at 44 years in contrast to the present 69 years
• During the colonial period, the occupational structure of India showed little sign of change

Workforce Divisions

• The agricultural sector accounted for the largest share of the workforce, which usually remained at a high of 70-75 percent
• The manufacturing and service sectors accounted for only 10 and 15-20 percent, respectively

Column I

• Introduction of railways in India
• Incorporation of TISCO
• First Official Census of India
• Opening of Suez Canal

Column II

• Introduction of railways in India occurred in 1850
• The Suez Canal opened in 1869
• Roads were constructed by the British primarily for the army's movement
• Britishers took steps to expand Indian exports and develop inland trade and sea routes
• The first British census in India was in 1881
• Zamindari system was introduced by the British to ensure proper control over the revenue system in India
• An understanding of the Indian economy before independence is necessary to know and appreciate the level of economic development achieved during the post-independence period
• The country's growth rate of aggregate real output during the first half of the twentieth century was only less than 2% p.a, with a real output of about 0.5% p.a
• India's economy under British colonial rule remained fundamentally agrarian
• About 85% of the country's population derived their livelihood directly or indirectly from agriculture

Drawbacks of The New Industrial Sector

• The new industrial sector had many drawbacks
• Modern industry started taking root in India in the 19th century's second half
• There were not capital goods industries to help promote industrialisation in India
• The very limited area of operation of the public sector was also a main drawback, which remained confined only to the railways, power generation, communications, ports and some other departmental undertakings
• The opening of the Suez Canal significantly reduced the transportation costs between Britain and India

Motives of the British

• The focus of the economic policies pursued by the colonial government centered on protecting and promoting the economic interests of their home country, not developing the Indian economy
• The motive behind the systematic de-industrialisation in India was to reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain
• The motive behind the infrastructural development in India was to subserve various colonial interests, e.g., mobilising the army within India and drawing out raw materials from the countryside to the nearest railway station or port to send them to England
• The motive behind monopoly control over India's exports and imports focused on using a large export surplus to make payments for the expenses incurred by an office set-up in British, expenses on war, and import of invisible items
• The first Indian railways in India were introduced in 1850, which fostered India's commercialisation of agriculture and the exports of cotton and silks, rice, sugar and butter, which gave rise to production and grains
• In the Swadeshi Movement against the British started in 1905 that replaced British goods for Indian products.

Impact of the movement

• A likely impact of the movement was the fall in imports from Britain
• Another impact was the rise in the production of goods in India
• Construction of railways led to huge economic losses to the Indian economy

Tata Airlines Inauguration

• The railways enhanced the commercialisation of India agriculture, which adversely affected the comparative self-sufficiency of the village economies in India
• Tata Airlines, a division of Tata and Sons, inaugurated the aviation sector in India
• Under the colonial regime, basic infrastructure such as railways, ports, water transport, posts and telegraphs developed
• The real motive behind this development was not to provide basic amenities but to subserve various colonial interests