Indian Economic Development | Chapter:1 |CBSE

Indian Economy On The Eve Of Independence

|Chapter -1 |Short Notes| CBSE |Class-12

1) Colonial Exploitation Of Indian economy Under British Rule:

Indian Economy under the British Rule was subjected to colonial exploitation.

a) Colonial Exploitation Of Agricultural Sector-

Agriculture was exploited through zamindari system of land revenue.

Zamindari system of land revenue – A system of land revenue that worked through middlemen called zamindars, an intermediary between colonial government and peasants. 

Zamindars were declared as owners of the soil. They were to pay a fixed sum to the Government by way of land revenue, and were free to extract as much as they wished from tillers of the soil.

tillers of the soil  got bare minimum for survival. They were left with no surplus for investment in agriculture.

On the other hand, Zamindars spent their revenue income n the luxuries of life. 

b) Industrial Sector – 

Prior to British Rule, Industrial sector in India was well known for its handicrafts.

Indian Handicrafts (work produced by hand labor) enjoyed a world wide reputation for their  variety and quality. But these were destroyed by British Government in two ways :

Foreign demand for the Handicraft was destroyed by way of heavy duty on their exports.

Domestic demand was destroyed by way of duty free import of the British  goods in Indian Markets.

c) International Trades – 

It was exploited through discriminatory tariff( tax on imports policy) policy. It implied :

Duty free exports of Indian raw material to fulfil industrial needs in Britain and Duty free imports of British goods to expand demand for British Goods in Indian Markets.

Owing to its colonial Exploitation, the Indian economy became both stagnant as well as backward.

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2)Features:

a) Stagnant Economy: 

On the Eve of Independence, Indian economy was completely a stagnant economy.

stagnant economy is the one which shows little or no growth in income.

On account of its stagnation, bulk of Indian Population lived in poverty. Standard of living of the people remained miserably low. Epidemics and Famines were a recurring phenomenon.

b) Backward Economy:

Backward Economy is one in which per capita income is very low. The bulk of population was very poor, without sufficient food, clothing and shelter. Unemployment was rampant.

c) Agricultural Backwardness:

Nearly 72% of the country’s working population was engaged in agriculture. But, its contribution in GDP was only 50 %. Productivity was extremely low. Thus, per hectare output of wheat was only 660 kilograms, and of rice just 665 kilograms.

d) Industrial Backwardness:

There was a virtual lack of the basic and heavy industries in the country. Production of machines was almost negligible. Small scale and cottage industries were almost ruined. For the bulk of its capital goods requirement, the Indian industry was dependent upon imports from Britain.

e) Rampant Poverty:

Bulk of population was very poor. People were not getting two square meals of a day. They lacked shelter and clothing. This was largely owing to widespread of unemployment.

f) Poor Infrastructure:

Infrastructural development(including means of communication and transport, generation of power\energy )was extremely low.

g) Heavy Dependence of Imports:

The country had to depend on imports of machinery for production, equipment of Armed forces. Several consumer foods such as medicines and kerosene  oil,etc. Used to be import from abroad.

h) Limited urbanisation:

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

i) Semi- feudal Economy:

Indian economy was neither wholly feudal nor a capitalist economy. It was mixed economy or semi feudal economy. India had mixture of feudalistic and capitalist modes of production which leads to low productivity, hence, backwardness.

j) Colonial Economy:

Since, Indian Economy was a colony of British Government, which implied exploitation of Indian economy for the sake of British Govt.

British Government destroyed Indian goods by imposing heavy duty on Domestic Industry which forced Indians to but British Goods. Export of raw material by Britishers led to destruction of Indian natural Resources.  Cruelty were committed on Cottage industries, which further led to destruction of Indian Handicraft.

3) Agriculture Sector :

Characteristics of Agriculture Sector on the Eve of Independence- 

a) Low Productivity-

Production refers to total output, while productivity refers to output per hectare. Level of productivity was extremely low which implied low output, despite large area cultivation. 

The table shows the comparison of figures of production in 1947 and production in 2018-19.

b) High degree of uncertainty:

Agriculture showed a high degree of vulnerability as it was excessively dependent upon rainfall. Good Rainfall implied good output while poor rainfall implied poor output. No efforts were ever made under British Govt. To develop permanent means of irrigation such as wells, canals.

c) Dominance of Subsistence Farming:

Subsistence farming refers to that farming in which crops are produced to fulfil basic needs of the family . There is  little surplus left for sale in the market which implies lack of commercial outlook , further leads to poverty dominated.

d) Gulf(gap) between Owners of Soil and Tillers of Soil:

Agriculture was characterised as wedge between Owners and Tillers of Soil ,under British Raj. The owners hardly shared the cost of production, they were interested in maximising  their rental income. While, tillers were merely given enough for subsistence, confronted absolute poverty and accepted indebtedness as their way of living.

e) Small and Fragmented Holdings:

Landholdings were both small as well as fragmented. Accordingly, most landholding were uneconomic yield low output at high cost.

f) Land Revenue System Under British Raj:

Britishers introduced a unique system of land revenue. It set up a triangular relationship among the Govt., the owner of the soil and the tiller of the soil. This was popularly known as zamindari system Of Land Revenue. 

Feature:

The zamindars  were recognised as permanent owners of the soil, were to pay a fixed sum to Government as land revenue, were free to extract as much from tillers of the soil as they could.  

It led to unlimited exploitation to the tillers of the soil by zamindars. Rates of land revenue were frequently raised by zamindars which reduced tillers to landless labourers. 

g) Forced Commercialisation of Agriculture:

Commercialisation of Agriculture refers to shift from cultivation for self consumption to cultivation for the market. Since, Indigo was required by textile industry in Britain for dyeing of textile , farmers were forced to shift commercial crops (particular, indigo) from conventional subsistence crops (like wheat, rice). The farmers were  forced to accept advance payments for cultivation of Indigo.

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