Indian Economy on the Eve of Independence

Introduction to Indian Economic Development

• This is the second book in the Android series, focusing on the Indian economy's development.
• The goal is to complete the book and provide one-shot revision videos for each chapter.

Study Approach

• The course will start with conceptual understanding, followed by solving NCERT solutions.
• One-shot videos will be provided for each chapter.
• The book explores India's economic development from the British era to the present day.
• This includes policy frameworks and the impacts of British rule.

Book Overview

• The book can be seen as a history of the Indian economy.
• The book is purely theoretical, without numerical problems.

Chapter 1: Indian Economy on the Eve of Independence

• The first chapter examines the state of the Indian economy at the time of independence.
• This includes levels of economic development under colonial rule.

Topics to be Covered

• Introduction providing an overview of the chapter
• Low Level of Economic Development Under Colonial Rule: Explanation of why economic development was low during British rule.
• Origin of British Rule: How the British established their rule in India.
• Agriculture Sector: Analyzing the condition of the agriculture sector before independence.
• Industrial Sector: Analyzing the condition of the industrial sector before independence.
• Foreign Trade: Analyzing the state of foreign trade before independence.
• Demographic Condition and Occupational Structure: Understanding the population and job distribution at the time.
• Infrastructure Sector: Examining the state of roads, railways, and other infrastructure.
• Positive Contributions of British Rule: Identification of any positive impacts from the British period.
• Indian Economy on the Eve of Independence: Overall state of the Indian economy when the British left.
• NCERT Solutions: Solving textbook questions for better understanding.

Interrelation of Pre and Post-Independence

• Pre-independence, the Indian economy was exploited by the British for their own development.
• Post-independence witnessed gradual economic development due to new ideas and policies.
• This included improvements in infrastructure, agriculture, and technology.

Origin of British Rule

• Britishers first landed in Surat, Gujarat in August 1608 with the primary motive of using India’s resources to develop their economy.
• Seven years later, the British got a royal order to establish a factory at Surat under Sir Thomas Roe.
• Next, the East India Company got permission from Vijayanagar to establish a factory at Masulipatnam in Andhra Pradesh. This shows that more and more factories came to the country.

Expansion

• More British businesses started to expand, leading to the Battle of Plassey in 1757 between the Nawab of Bengal and the British East India Company.
• This gave the British a route to other places in the country.
• This battle resulted in British rule over Bengal, providing access to more areas in India.

Motives of British Rule

• The main purpose of British rule in India was to use the Indian economy as a feeder for the development of the British economy.

Pre-British Economy

• Before the arrival of the British, India was a prosperous economy.
• It was self-reliant and independent, with no dependence on external entities.
• The Indian economy was rich in both human and natural resources.

Features of Pre-British Economy

• Prosperous Economy: India was an independent, self-reliant, and prosperous economy.
• Agrarian Economy: Agriculture was the main source of livelihood for most people.
• Agriculture contributed two-thirds of the total population.
• Well-Known Handicraft Industries: The handicraft industries were well-known in fields like cotton, silk, metal, and precious stone work. They had a wide market due to the quality of material and craftsmanship.

Economic Transformation During British Rule

• Economic policies were made to promote the economic strengths of British and did not help India's economy.

Economic Policies

• Indian became a supplier of raw materials because the British wanted India to only supply raw materials. and the British were the consumers in all.

Measuring Economic Decline

• National income and per capita income are measures of the economic situation of the time.

Attempts to Assess Economic Growth

• No actual attempts made to calculate these incomes, no one ever wanted to find out how to fix the income gap.

Study Attempts

• Some people tried, like:

  • Dadabhai Naoroji
  • William Digby
  • Findlay Shirras
  • V.K.R.V. Rao

• They all figured out that national income and income per capita were not consistant.

• Dr. Rao's estimates on these were most important to use.

• These studies revealed that the progress for the country during the first half of the 20th century was 2 percent and 0.5 in per capita export.

Agricultural Sector Before British Rule

• Most of the population did agriculture, but there were no improvements for the farmers.

Nature

• During the British time, agriculture was not good.
• India can also be looked as rural and agriculture.
• Majority of the population did agriculture.
• It was a main source of income, whether indirect or direct.

Reasons for Agriculture Degradation

• Even though majority of the people did agriculture, they were not sufficient in providing raw foods and materials for industry.
• The agriculture could not grow well because of reasons in terms of seasons and other factors.

Stagnation of Agriculture Sector Reasons

• Land Settlement System: This slowed the development of the economy, because the amount gained didn't add up.

Land Settlement System

• This caused the agricultural section to come to an end.
• The most important reason being the introduction of the Zamindari system.
• Everything that farmers did was for the profit of the Zamindars, who profited off the agriculture sector.
• What mattered to Landlords, otherwise known as "Zamindars", was revenue collected regardless of environment.

Zamindars

• Zamindars were superior, and had a lot of benefits during the British's time.
• British rulers never did anything to fix the agriculture revenue system.

Commercialization of Agriculture

• Agricultural sector saw a wave of production.
• During the British, farmers were incentivized to grow cotton, sugarcane, and other cash crops.
• The farmers switched from food crops to cash crops which was not a good idea.
• It resulted in the increase in the food supply. They were replaced with commercial crops instead.
• British ruled more and they were just there to get raw material for their land.
• If they produced more, then the farmers would gain more.
• By the time the food reached there, it was harder and harder to get.

Effect on Farmers

• Farmers could not make a lot more money, so they were not producing much.
• What made British so nice to help people with farming?
• The production was for the needs of the factory.
• This resulted in a wide range famine, resulting in bad scenarios.

British

• The British put so many people in the place of people so that the material can go where they need it to.

Low Level of Productivity

• Farmers had no idea what they needed to do for good cultivation practices.
• They were just told to plant stuff.

Lack of Means

• Low levels of technology, luck of rain water, fertilization resulted in low level of products.
• These all resulted in what happened with farmers and the growth of their land.
• If it rained, or if it does not, it means what it does, some farmers use their own methods in those cases. These methods may sometimes work, and sometimes not.
• This may have caused some formers to have had no income at all.

Lack of Incentives

• Cultivators did not invest in equipment themselves.
• Zamindars and British did not involve agriculture and technical equipment into their lessons.
• There may have been some difficulty with farmers introducing equipment on their own.
• This is why there were not as many investments at the time.

Investment Scenario

• Because it was a set standard, they felt there should not be too many changes or differences.
• There were not a lot of places to go if there was lots of extra water.
• These places can flood and result in damages to the crops and land.
• This includes droughts and it does not help either.
• In result of this, the farmers make lower income. This results in agriculture development to stop since they can't afford.