Indian Economy on the Eve of Independence Notes PDF

INDIAN ECONOMY ON THE EVE OF INDEPENDENCE Q1. Give the features of Indian economy before the advent of the British rule ? Ans. India had an independent economy before the advent of the British rule.  Though agriculture was the main source of livelihood for most people, yet, the country’...

INDIAN ECONOMY ON THE EVE OF INDEPENDENCE Q1. Give the features of Indian economy before the advent of the British rule ? Ans. India had an independent economy before the advent of the British rule.  Though agriculture was the main source of livelihood for most people, yet, the country’s economy was characterized by various kinds of manufacturing activities.  India was particularly well known for its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc.  These products enjoyed a worldwide market based on the reputation of the fine quality of material used and the high standards of craftsmanship seen in all imports from India. Q2. What was the condition of agriculture at the time of Independence ? OR Why agricultural productivity was low during colonial period? (V. IMPT) Ans :Agricultural productivity became very low / stagnant in agriculture sector because of following reason – 1) Policies of Land Settlement - Colonial government introduced various land settlement policies such as Zamindari system in which maximum profit coming from agriculture sector went in the hands of Zamindars instead of cultivators. The main interest of the zamindars was only to collect rent regardless of the economic condition of the cultivators; this caused immense misery and social tension among cultivators. This lead to discouragement amongst the cultivators to produce less. 2. Lack of irrigation facilities:-Agriculture sector was mainly dependent on monsoon. No effort was ever made under the British rule to develop permanent means of irrigation. 3. Lack of Proper Inputs:-Low level of technology, and negligible use of fertilizers lead to low agricultural productivity. 4. Less investment: There was less investment in terracing, flood-control, drainage and desalinisation of soil. While a small section of farmers changed their cropping pattern from food crops to commercial crops, a large section of tenants, small farmers and sharecroppers neither had resources and technology nor had incentive to invest in agriculture. 5. Commercialisation of agriculture:- Initially before the British rule, the farmers used to grow food crops like rice and wheat for their own consumption. But afterwards, in order to feed British industries with cheap raw materials, the Indian farmers were forced to grow cash/commercial crops (like indigo required by British industries to dye textiles) instead of food crops (like rice and wheat). This led to the commercialisation of Indian agriculture. This commercialisation of Indian agriculture not only increased the burden of high revenues on the poor farmers but also led India to face shortage of food grains, resources, technology and investment. Q3. What was the condition of industrial sector at the time of Independence ? OR appraise some of the shortfalls of the industrial policy pursued by the British colonial administration. Ans. 1. Systematic de-industrializing :- The primary motive of the colonial government behind this policy of systematically de-industrializing India was two-fold. (i) Firstly the intention was to reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain and, (ii) Secondly to turn India into a market for the finished products of those industries so that their continued expansion could be ensured to the maximum advantage of Britain. 2. Decline of indigenous handicraft industries:-The decline of the indigenous handicraft industries created massive unemployment in India. It also lead to increase in demand in the Indian consumer market as there was shortage of locally made goods. 3. Dependence on imports -The more demand of Indian consumer market was met by increasing imports of cheap manufactured goods from Britain. 4. Less role of modern industries -During the second half of the nineteenth century, modern industry began to take root in India but its progress remained very slow. Initially, this development was confined to the setting up of cotton and jute textile mills. The cotton textile mills, mainly dominated by Indians, were located in the western parts of the country, namely, Maharashtra and Gujarat, while the jute mills dominated by the foreigners were mainly concentrated in Bengal. Subsequently, the iron and steel industries began coming up in the beginning of the twentieth century. The Tata Iron and Steel Company (TISCO) was incorporated in 1907. A few other industries in the fields of sugar, cement, paper etc. came up after the Second World War. 5. Lack of capital goods industry:- There was hardly any capital goods industry to help promote further industrialization in India. Capital goods industry means industries which can produce machine tools which are, in turn, used for producing articles for current consumption. The establishment of a few manufacturing units could not cover the loss due to huge decline of indigenous handicraft industries. 6. Low growth rate :-The growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP)remained very small. 7. Limited role of public sector –There was very limited area of operation of the public sector. This sector remained confined only to the railways, power generation, communications, ports and some other departmental undertakings. Note – 1.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. The economic policies pursued by the colonial government in India were concerned more with the protection and promotion of the economic interests of their home country than with the development of the Indian economy. Such policies brought about a fundamental change in the structure of the Indian economy — transforming the country into supplier of raw materials and consumer of finished industrial products from Britain. 2. Despite some progress made in irrigation, India’s agriculture was starved of investment in terracing, flood-control, drainage and desalinisation of soil. While a small section of farmers changed their cropping pattern from food crops to commercial crops, a large section of tenants, small farmers and sharecroppers neither had resources and technology nor had incentive to invest in agriculure. 3.Even as the country’s world famous handicraft industries declined, no corresponding modern industrial base was allowed to come up. The decline of the indigenous handicraft industries created not only massive unemployment in India but also a new demand in the Indian consumer market, which was now deprived of the supply of locally made goods. This demand was profitably met by the increasing imports of cheap manufactured goods from Britain Q4. What was the condition of foreign trade at the time of Independence ? OR Indicate the volume and direction of trade at the time of independence. Ans 1. Restrictive policies:-The restrictive policies of commodity production, trade and tariff imposed by colonial government adversely affected the structure, composition and volume of India’s foreign trade. India became an exporter of primary products such as raw silk, cotton, wool, sugar , indigo, jute etc. and an importer of finished consumer goods like cotton, silk and woollen clothes and capital goods like light machinery produced in the factories of Britain. 2. Full Control of Britain:- Britain maintained a monopoly control over India’s exports and imports. As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia (Iran). 3. Opening of the Suez Canal:- The opening of the Suez Canal (1869) further intensified British control over India’s foreign trade as it reduced the cost of transportation and made access to the Indian market easier. 4. Large export surplus:- The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus. But due to this large export surplus , the supply of several essential commodities like food grains, clothes, kerosene etc decreased in the domestic market. 5. Drain of Indian wealth:- The export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war , again fought by the British government, and the import of invisible items, all of which led to the drain of Indian wealth. Q5. Explain the Demographic profile of India at the time of Independence. OR Give a quantitative appraisal of India's demographic profile during the colonial period. Ans.Demographics is defined as statistical data about the characteristics of a population, such as the age, gender, literacy etc. Demographic profile of India at the time of Independence is given below : 1.Low literacy level :- The overall literacy level was less than 16 per cent. Out of this, the female literacy level was at a negligible low of about seven per cent. 2. Lack of Public health facilities :- Public health facilities were either unavailable to majority population or, when available, were highly inadequate. Consequently, water and air -borne diseases were rampant and took a huge toll on life. 3. High mortality rate / death rate :- The overall mortality rate was very high and in that, particularly, the infant mortality rate was quite alarming about 218 per thousand in contrast to the present infant mortality rate of 33 per thousand. 4.Low Life expectancy - Life expectancy was also very low of 44 years in contrast to the present 69 years. 5. Extensive poverty :- Extensive poverty prevailed in India during the colonial period which contributed to the worsening profile of India’s population of the time. The year 1921 is regarded as the defining year. It is also known as the year of the Great Divide, as population growth was scarce before that time. After 1921, India’s population growth was consistent. Q6. Explain the Occupational structure of India at the time of Independence. Ans. Occupational structure means distribution of working persons across different industries and sectors. Occupational structure of India at the time of Independence is given below: 1. Agricultural sector accounted for the largest share of workforce:-During the colonial period, agricultural sector accounted for the largest share of workforce, which usually remained at a high of 70-75 per cent while the manufacturing accounted for 10 per cent and services sectors accounted for 15-20 per cent. 2. Growing regional variation :- Parts of the then Madras Presidency (comprising areas of the present-day states of Tamil Nadu, Andhra Pradesh, Kerala and Karnataka), Bombay and Bengal witnessed a decline in the dependence of the workforce on the agricultural sector with a corresponding increase in the manufacturing and the services sectors. However, there had been an increase in the share of workforce in agriculture during the same time in states such as Orissa, Rajasthan and Punjab. Note :- 1. The colonial government never made any sincere attempt to estimate India’s national and per capita income. Some individual attempts which were made to measure such incomes yielded conflicting and inconsistent results. Among the notable estimators — Dadabhai Naoroji, William Digby, Findlay Shirras,  V.K.R.V. Rao and R.C. Desai — it was Rao, whose estimates during the colonial period was considered very significant. 2. Most studies did find that the country’s growth of aggregate real output during the first half of the twentieth century was less than two per cent coupled with a meagre half per cent growth in per capita output per year. 3. First official census operation was undertaken in the year 1881. Q7. Explain the condition of infrastructure of India at the time of Independence. Ans. Under the colonial regime, basic infrastructure such as railways, ports, water transport, posts and telegraphs did develop. However , the real motive behind this development was not to provide basic amenities to the people but to subserve various colonial interests. 1. Railways - The British introduced the railways in India in 1850 and it is considered as one of their most important contributions. The railways affected the structure of the Indian economy in two important ways. On the one hand it enabled people to undertake long distance travel and thereby break geographical and cultural barriers while, on the other hand, it lead to commercialisation of Indian agriculture. But this commericalistaion has negative impact on self-sufficiency of the village economies in India. The volume of India’s export s undoubtedly expanded but its benefits rarely accrued to the Indian people. The social benefits, which the Indian people gained owing to the introduction of the railways, were thus outweighed by the country’s huge economic loss. 2. Inland trade and sea lanes :-Along with the development of roads and railways, the colonial government also took measures for developing the inland trade and sea lanes. However , these measures were far from satisfactory. The inland waterways, at times, also proved uneconomical (as in the case of the Coast Canal on the Orissa coast. Here the canal was built at a huge cost to the government , yet, it failed to compete with the railways, and so canal had to be ultimately abandoned. 3.Electric telegraph :- The introduction of the expensive system of electric telegraph in India, similarly, served the purpose of maintaining law and order. 4. Postal services :- The postal services, on the other hand, despite serving a useful public purpose, remained all through inadequate. Note - Under the colonial regime, basic infrastructure such as railways, ports, water transport, posts and telegraphs did develop. However, the real motive behind this development was not to provide basic amenities to the people but to subserve various colonial interests. Roads constructed in India prior to the advent of the British rule were not fit for modern transport. The roads that were built primarily served the purposes of mobilising the army within India and drawing out raw materials from the countryside to the nearest railway station or the port to send these to far away England or other lucrative foreign destinations. There always remained an acute shortage of all weather roads to reach out to the rural areas during the rainy season. Naturally, therefore, people mostly living in these areas suffered grievously during natural calamities and famines. Q 8. Underscore some of India’s most crucial economic challenges at the time of independence. Ans.By the time India won its independence, the impact of the two-century long British colonial rule was already showing on all aspects of the Indian economy.  The agricultural sector was facing surplus labour and extremely low productivity.  The industrial sector was in urgent need of modernisation, diversification, capacity building and increased public investment.  Foreign trade was oriented to feed the Industrial Revolution in Britain.  Infrastructure facilities, including the railway network, needed upgradation, expansion and public orientation. Prevalence of poverty and unemployment required welfare orientation of public economic policy. In a nutshell, the social and economic challenges before the country were enormous. NOTE -1. India’s economy under the British colonial rule remained fundamentally agrarian — about 85 per cent of the country’s population lived mostly in villages and derived livelihood directly or indirectly from agriculture However, despite being the occupation of such a large population, the agricultural sector continued to experience stagnation and, not infrequently, unusual deterioration. 2.Agricultural pro-ductivity became low though, in absolute terms, the sector experienced some growth due to the expansion of the aggregate area under cultivation. This stagnation in the agricultural sector was caused mainly because of the various systems of land settlement that were introduced by the colonial government. Particularly, under the zamindari system which was implemented in the then Bengal Presidency comprising parts of India’s present-day eastern states, the profit accruing out of the agriculture sector went to the zamindars instead of the cultivators. 3. To a very great extent, the terms of the revenue settlement were also responsible for the zamindars adopting such an attitude; dates for depositing specified sums of revenue were fixed, failing which the zamindars were to lose their rights. NCERT QUEST ANSWERS CHAPTER 1 Q.1:- What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies? Ans The economic policies pursued by the colonial government in India were concerned more with the protection and promotion of the economic interests of their home country rather than with the development of the Indian economy. They exploited India by using it as a supplier of raw materials and a consumer of British-made finished goods. Impacts of these policies are : i.Backwardness of the agricultural sector:- Colonial government introduced various land settlement policies such as Zamindari system in which maximum profit coming from agriculture sector went in the hands of Zamindars instead of cultivators. The main interest of the zamindars was only to collect rent regardless of the economic condition of the cultivators; this caused immense misery and social tension among cultivators. This lead to discouragement amongst the cultivators to produce less. ii. Deindustrialisation:- India could not develop its industrial sector under the colonial rule. This is because the colonial government followed the policy of systematic deindustrialisation. Under this policy, India was turned into an exporter of raw materials to Britain and an importer of British-made finished goods. Also, iii. Regression in foreign trade: Britain maintained a monopoly control over India’s exports and imports. As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia (Iran). The opening of the Suez Canal further intensified British control over India’s foreign trade as it reduced the cost of transportation and made access to the Indian market easier. The export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war , again fought by the British government, and the import of invisible items, all of which led to the drain of Indian wealth. (iv)Decline of indigenous handicraft industries:-The colonial government imposed heavy tariffs on exports of Indian handicrafts which destroyed the handicraft industry in India. The decline of the indigenous handicraft industries created massive unemployment in India. It also lead to increase in demand in the Indian consumer market as there was shortage of locally made goods. (v) Less growth rate:-The growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP)remained very small. 2. Name some notable economists who estimated Indian’s per capita income during colonial period? Ans. DadabhaiNaoroji, William Digby, R. C Desai 3. What were the main causes of India’s agricultural stagnation during the colonial period? Ans. 1 Policies of Land Settlement 2. Lack of irrigation facilities: 3. Lack of Proper Inputs: 4. Less investment: 5. Commercialization of agriculture: For Detailed explanation - See question 2 chapter 1 (Main question answer section) 4. Name some modern industries which were in operation in our country at the time of independence. Ans.Cotton Textile Industries, Jute Textile Industries., Iron and Steel Industries. etc 5. What was the two-fold motive behind the systematic de-industrialization affected by the British in pre - independent India? Ans.Make India (i)Exporter of important raw materials (ii) Importer of finished product For Detailed explanation - See question 3 (parti) chapter 1 (Main question answer section) Q.6:- The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer. Ans.Yes I do agree with the view that the traditional handicrafts industries were ruined under British rule. Till the middle of eighteenth century Indian handicraft products were greatly demanded in the markets all over the world but the policies followed by colonial government gradually reduced their demand in market. The main cause of exploitation of traditional handicraft industries was de- industrialisation introduced by British rulers in India. (a) British got raw materials from India at cheaper rates and sold their machine made items in Indian markets at cheaper rates than handicraft goods. (b) They also imposed heavy export duties on India's export of handicraft products, while allowed free export of India's raw material to Britain and free import of British products into India. In this way, Indian markets were full of manufactured goods from Britain which were low priced. Indian handicrafts started losing both domestic market and export market. Ultimately, the handicraft industry declined. Q7. What objectives did the British intend to achieve through their policies of infrastructure development in India? Ans. During the British rule, some basic infrastructure was developed in the form of railways, water transport, ports, post and telegraph, etc. However, the real intention behind these developments was to serve their own colonial interest. Like the roads that were built primarily served the purposes of mobilizing the army within India and drawing out raw materials from the countryside to the nearest railway station or the port to send these to far away England or other foreign destinations. The introduction of the expensive system of electric telegraph in India, similarly, served the purpose of maintaining law and order. Q8. appraise some of the shortfalls of the industrial policy pursued by the British colonial administration. Ans. 1. Systematic de-industrializing 2. Decline of indigenous handicraft industries 3. More import 4. Less role of modern industries 5. Very few capital goods industry 6. Less growth rate 7. Less role of public sector For Detailed explanation - See question 3 chapter 1 (Main question answer section) Q9. What do you understand by the drain of Indian wealth during the colonial period? Ans. The export surplus of India was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war etc. For Detailed explanation - See question 4 (point v) chapter 1 (Main question answer section) 10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage? Ans.The year 1921 is regarded as the defining year to mark the demographic transition from its first to the second decisive stage. It is also known as the year of the Great Divide, as population growth was scarce before that time. After 1921, India’s population growth was consistent. Q11. Give a quantitative appraisal of India's demographic profile during the colonial period. Ans.1.Low literacy level 2. Lack of Public health facilities 3. High mortality rate / death rate 4.Low Life expectancy 5. Extensive poverty See question 5 chapter 1 (Main question answer section) Q12. Highlight the salient features of India’s pre-independence occupational structure. Ans. For Detailed explanation - See question 6 chapter 1 Q13. Underscore some of India’s most crucial economic challenges at the time of independence. Ans.For Detailed explanation - See question 8 chapter 1 (Main question answer section) Q14. When was India's first official census operation undertaken? Ans.First official census operation was undertaken in the year 1881. Q15. Indicate the volume and direction of trade at the time of independence. Ans. For Detailed explanation - See question 4 chapter 1 (Main question answer section) Q16. Were there any positive contributions made by the British in India? Discuss. Ans.Yes, there were positive contributions that were made by the British in India. The contributions were not intentional but purely the effects of colonial exploitation of the British. The following are the positive contributions made by the British: (a) Introduction of Railways: It opened up the cultural and geographical barriers and facilitated commercialisation of Indian agriculture. (b)Commercialisation of Agriculture: Prior to the advent of the British, Indian agriculture was of subsistence nature. But with the commercialisation of agriculture, today India can aim at attaining self-sufficiency in food grains production. (c) Development of Infrastructure: The development of infrastructure like roads, sea lanes, electric telegraph, postal services etc generated new opportunities for economic and social growth of India. (d) Effective administration set up: The way and the technique of British administration acts as a role model for the Indian politicians and planners. It helped Indian politicians to govern the country in an efficient and effective manner. NCERT BOXES FOR EXTRA READING 1.Muslin is a type of cotton textile which had its origin in Bengal, particularly, places in and around Dhaka (spelled during the pre-independence period as Dacca), now the capital city of Bangladesh. ‘Daccai Muslin’ had gained worldwide fame as an exquisite type of cotton textile. The finest variety of muslin was called malmal. Sometimes, foreign travellers also used to refer to it as malmalshahi or malmalkhas implying that it was worn by, or fit for, the royalty 2.Suez Canal is an artificial waterway running from north to south across the Isthmus of Suez in north-eastern Egypt. The canal provides a direct trade route for ships operating between European or American ports and ports located in South Asia, East Africa and Oceania by doing away with the need to sail around Africa. Strategically and economically, it is one of the most important waterways in the world. Its opening in 1869 reduced the cost of transportation and made access to the Indian market easier. DOWNLOAD ECOVISIONNAIRE APP FOR SUBJECT RELATED CONTENT SUBSCRIBE ECOVISIONNAIRE CHANNEL ON THE YOUTUBE TO GET THE SUBJECT RELATED UPDATES FOLLOW economics_by_amit on Instagram to get latest updates For any subject related query contact- 9891203546