INDIAN ECONOMY ON THE EVE OF INDEPENDENCE
Basic Purpose of British Rule :– The main Purpose of the British rule in India was to use Indian economy as feeder economy for the development of British economy. British colonial rule tempered the Indian economy very badly. They exploited India’s natural as well as human resources for the glory of their country. Finally, after 200 years of British rule, India gained independence from them on the 15th August 1947.
Characteristics of Indian economy before the advent of British rule :–
Prosperous Economy : – India was an independent, self-reliant and prosperous economy.
Agrarian Economy :- Agriculture was the main source of livelihood for most people and it engaged about two- third of total population.
Well Known Handicraft Industries :- India was also known for its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works, etc. Handicraft product enjoyed a worldwide market due to its reputation of fine quality of material used and the high standards of craftsmanship.
What was the condition of agriculture sector at the time of Independence?
During the pre-British period, the condition of Indian agriculture was not at all satisfactory :-
At the time of independence, 85 percent of the total working population of India was working in the agriculture sector and derived livelihood, directly or indirectly from agriculture, but the country was not self-sufficient in food and raw materials for industry. The reasons for which were the following
1. The level of production was very low because the resources of production were poor, the use of chemicals was used nominally.
2. The whole production depended on rain, this meant that good rain meant good production and bad rain meant bad production because there was no other resources of irrigation.
3. Due to high population pressure on the land, sub-division of land led to decline in productivity level.
4. Agriculture was done for self consumption, its commercialization was not much.
5. At the time of partition, the irrigated and fertile part went to Pakistan, which had a bad effect on agricultural production.
Main causes of India’s agricultural stagnation during colonial period :-
Zamindari system :-
- The Zamindars were made the owners of large tracts of land. In return, they had to pay a fixed amount of land revenue to the government. The main interest of the Zamindars was thus, only to collect rent and did nothing to improve the condition of agriculture.
- The cultivators had no ownership rights and thus lacked the interest to increase productivity of land.
- The agricultural sector was marked with low levels of technology, lack of irrigation facilities and negligible use of fertilizers, leading to low productivity.
Due to the above reasons enmity arose between the landowners and the tenants. Many farmers were evicted from the land ownership by the landlords and they started living the life of landless labourers. In this way the attachment of the farmers towards agriculture ended and agriculture was destroyed. Now agriculture started being done only for subsistence.
2. Commercialization of agriculture :- The commercialization of agriculture means that “production of crops for sale instead of self-consumption”.
- During the British rule, farmers were given higher price for producing cash crops (like cotton or jute) and forced to produce commercial crops such as: – Neel etc. so that crops could be used as raw material for British Industries.
- Thus, British rule promoted shifting of crops from food crops to cash crops. this reduced the production of food crops.
3. Adverse affects of Partition :-
The partition of the country in 1941 had a bad effect on India’s agricultural production, the high food producing areas of western Punjab and Sindh went to Pakistan. Even the entire productive area of jute production went to East Pakistan. India’s jute industry was badly affected due to partition.
Thus, The loss of fertile areas after partition made India dependent on imports of food grains. Indian agriculture became backward, stagnant and dormant during the British rule.
What was the condition of Industrial sector at the time of Independence?
State of Industries in India on the eve of independence:–
The industrialization sector was backward at the time of independence, which is evident from the following points.
De-industrialization:- The British adopted the policy of de-industrialization in India due to the following reasons:-
(a) To obtain raw material from India at a lower or cheaper rate
(b) Selling goods made in England at high prices in the Indian markets
Due to this the handicraft art declined. Because these items were made of machines, in which the cost was less, due to their cheapness, their demand increased in the market, on the other hand, due to the end of the royal courts, the demand for items made by handicraftsmen ended. Before the advent of British in India, the traditional handicraft industries enjoyed a worldwide reputation for their quality and standards of craftsmanship.
- An introduction of railways facilitated the transportation of the British product to different parts of the country. As a result, the size of the market for the cost British product expanded while it started shrinking for the high cost Indian products. This lead to decay of Industry in India.
- The policy of the British was to develop such industries, which were not competitors of the British industry. He wanted Indians to always be dependent on England for capital and heavy plants. Therefore, only consumer goods industries developed during the British rule.
- Some Modern industries in India developed very slowly, in the beginning of the 19th century some cotton, jute mills, were established. Apart from this, the Tata Iron and Steel Company was established in 1907. Influenced by this, some sugar, cement and paper mills were also established.
- Owing to British rule in India, a new class of people emerged in India. This changed the pattern of demand in India against the Indian products and in favour of British products. As a result, the Indian Industry tended to perish.
Note:- If the British rule gave us anything, it is rail transport, postal telegram, apart from this, they also built ports and roads, but behind all this they had their personal interest.
What was the condition of foreign trade under the British rule?
Foreign Trade :-
In ancient times, India enjoyed a high position in foreign trade, it was considered an exporter of fine cotton, silk cloth, iron articles, ivory work and valuables, but the British rule made it an exporter of raw materials and manufactured goods. importer of which was due to:
- Composition of exports and imports showed the backwardness of Indian economy. Exports and imports were largely restricted to Britain only due to monopoly control of India’s foreign trade.
- India became an exporter of only primary commodities like cotton, sugar, indigo, jute etc., which led to shortage of these goods in the domestic market.
- India was also developed as a market for the finished goods of the British industries.
- Due to the opening of the Suez Canal, It reduced the cost and time of transportation and made access to the Indian market easier. so more than 50 percent of exports and imports now started between India and Britain only.
- Indian treasury was used to meet administrative expenses, due to which Indian wealth started decreasing.
Reason for decline of Handicraft Industry :-
The main reason for decline of india’s renowned handicraft industry was the introduction of ‘Discriminatory Tariff Policy’ by the colonial government. This policy allowed free export of raw materials from India and free import of final goods of British industry to India. But, heavy duty was imposed on the export of Indian handicrafts.
As a result, Indian markets were full of finished goods from Britain which were low priced. On the other hand, with the end of the royal courts, the demand for items made by handicraftsmen ended. It led to the decline of Indian handicraft, both in the domestic market as well as the export market.
Mention the demographic profile during the British rule.
During this period India was passing through the first demographic phase where both the birth rate and death rate were very high.
- Details about the population of British India were first collected through a census in 1881.
- Literacy rate was as low as 16 percent Whereas female literacy was only 7 percent, which reflects the social and economic backwardness of the country.
- The infant mortality rate during this period was about 218 per thousand and life expectancy was only 32 years which shows the lack of health care facilities, lack of awareness as well as lack of means for health care.
- The year 1921 is described as the ‘Year of the Great Divide’. From this year onwards, population increased by only about 1.25 corer persons, with a growth rate of only 0.2 per cent.
- Mention the condition of occupation structure at the time independence.
It is clear from the above description that all the characteristics are a sign of poverty, lack of health facilities and social and economic backwardness.
What was the condition of Infrastructure at the time of Independence.
There was some infrastructural development during the British in the area of transport and communication.
- Introduction of railways, was a major break through followed by the development of some ports and the construction of some roads.
- But the main motive of the British government was to foster the interest of the British Government rather than to accelerate the growth of Indian economy.
- There was transition from barter system of exchange to monetary system of exchange, which facilitated division of labour & large scale production.
Positive contribution made by British in India :-
- Self-sufficiency in food grain production :- Commercialization of agriculture initiated by British Government resulted in self-sufficiency in food grain production.
- Better means of transportation :- Development of roads and railways provided cheap and rapid transport system and opened up new opportunities of economic and social growth.
- Check on Famines :- Roads and railways worked as a great check on the occurrence and impact of famines as food supplies could be transported to the affected areas in case of droughts.
- Shift to Monetary Economy :- British rule helped Indian economy to shift from barter system of exchange (exchange of goods for goods) to monetary system of exchange.
- Effective administrative Setup :- The British Government had an efficient administration system, which served as a ready reckoner for Indian politicians.