Indian Economic Development | Chapter:1 |CBSE|Class-12
Indian Economy On The Eve Of Independence
|Chapter -1 |Short Notes| CBSE |Class-12
4. INDUSTRIAL SECTOR ON THE EVE OF INDEPENDENCE:
Systematic de-industrialisation describes status of industrial sector during the British rule. It implied two thing.
A) Decay of world famous traditional handicraft industry
B)Bleak growth of modern industry owing Iack of investment opportunities.
Decay of Handicrafts : British Raj contributed to decay of Indian Handicraft:
(1) Discriminatory Tariff Policy: The British found India as the best source of raw material as well as the best market for their industrial products It allowed: (I) tariff free export of raw material from India, and (ii) free import of British industrial products into India.
But at the same time, heavy duty was placed on the export of Indian handicraft products which reduced their competitiveness In the international market. The Indian handicraft products started losing their domestic as well as foreign market.
2) Disappearance of Princely Court: Prior to the British rule, nawabs, raja, princes and emperors ruled different parts of the country. They used to patronise the handicrafts because of which the Indian handicraft industry had acquired international reputation. Consequently, the handicrafts started decaying.
(3) Competition from Machine-made Product: Machine made products from Britain were low cost products and gave a stiff competition to the handicraft products in India. Competition forced the Indian craftsmen to shut down their enterprises.
(4) New Patterns of Demand: Owing to the impact of British culture, a new class emerged in India which was keen to adopt the western lifestyle. This changed the pattern of demand against the Indian Products and in favour of British Products.
5. Introduction of Railways : Size of the market for the low-cost British products tended to expand while it started shrinking for the high cost Indian products. The British government converted the Indian economy into a colonial market for the British industrial goods. Implying exploitation of the Indian market as: a source of raw material and a destination of demand for the British product.
Bleak Growth of Modern Industry:
Under the British Raj, modern industry saw only a bleak growth. Three observations need to be noted:
1) Some industries were established by the private entrepreneur, Included:Iron and steel (Tata Iron & Steel Company was founded In 1907) sugar, cement and paper Industries; were established in wake of worldwide scarcity of industrial goods.
2) The state participation in process of modern Industrialisation was limited. Railways and means of communication helped expansion of the Indian market for the British products.
3) There was no capital industry. In the absence of this Industry, Industrialisation in India remained asymmetrical.
5. FOREIGN TRADE UNDER THE BRITISH RULE :
India was well known exporter of finished goods (such as fine cotton, silk, textile, iron goods, wooden goods, ivory work and precious stones). But the British converted India into a net exporter of raw material and importer of finished goods. It was all due to discriminatory policy of trade and tariff pursued by the British government.
1) Net Exporter of Primary Products and Importer of Finished Goods: Indian economy became exporter of raw materials and primary products (like raw silk,cotton,mud,jute, indigo,sugar,etc.). On the other hand. it became net importer of finished goods produced by British industry. Composition of exports and imports reflected utter backwardness of Indian Economy.
2) Monopoly Control of India's Foreign Trade: During the British rule, exports and imports of the country came under monopoly control of the British government.
• More than 50% of India's foreign trade was directed towards Great Britain.
• While exports of primary products (raw material) from India supplied inputs to the British industry.
3)Surplus Trade but only to Benefit the British: Surprisingly, during the British rule, our exports exceeded our imports. It implied a surplus of. balance of trade.
• This surplus was owing largely to the export of primary goods which is a sign of economic backwardness.
• The trade surplus was not used for growth and development of the country. lnstead was used to meet: administrative expenses of the British government in India and expenses of war fought by the British government.
• Administrative and war expenses led to a huge drain of wealth from India. It compounded the backwardness of the Indian economy.
6. DEMOGRAPHIC PROFILE DURING THE BRITISH RAJ-
(1) Birth Rate and Death Rate: Both birth rate (BR) and death rate (DR) were very high , nearly 48 and 40 per thousand respectively.
High BR and High DR suggest a state of massive poverty in country.
(2) Infant Mortality Rate: Infant mortality rate (death rate of children below the age of one year per 1000 live births) was very high. It was about 218 per thousand, while at present ,it is 32 per thousand. High Infant mortality is a sign of poor healthcare associated with extreme poverty.
(3) Life Expectancy: Life expectancy (average life of a person) was as low,32 years, while presently it is 69.4 years.
Low life expectancy reflects lack of healthcare facilities as well as lack of awareness.
(4) Literacy Rate: Literacy rate (referring to those 'who can read and write) was nearly 16% reflecting social backwardness as a reflection of economic backwardness. Female literacy rate was still worse—only 7%. This indicated gender bias in the society.
Demographic Transition
a) 1921 is regarded as Year Of Great Divide.
b) Prior to 1921, population growth.in India was never consistent,kept fluctuating, increasing in one census and decreasing in the other.
c) From the year 1921 onward, total population of India never declined; it showed a consistent rise: the census 1931 recorded a rise of 2.76 crore,the census 1941 recorded a rise of 3.96 crore , the
census 1951 showed a rise of 4.24 crore,and so on.
d) A consistently rising population led to excessive burden of maintenance investment.
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