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Indian Economy on the Eve of Independence

Indian Economy on the Eve of Independence

Indian Economy on the eve of independence the condition was very bad there was nothing, and everything was destroyed. Here in this article, we have explained the condition of the Indian Economy on the evening of independence.

► Indian Economy on the Eve of Independence

The British Ruled India for over 200 years. The foundation of the British Empire in India was laid by the Battle of Plassey, fought in 1757. Finally, after 200 years on 15th August 1947, India got independence.

The 5 Indian economists calculated the GDP of India at the time of the British period.

  1. Dadabhai Naoroji
  2. William Digby
  3. Findlay Sierras
  4. V.K.R.V. Rao
  5. R.C. Desai

► Colonial Exploitation in India

  • Colonial Exploitation of the Agriculture Sector
  • Colonial Exploitation of the Industrial Sector
  • Colonial Exploitation of International Trade

◉ 1. Colonial Exploitation of the Agriculture Sector

It was the threefold system in which there was a British Government, Zamindars, Tillers, etc.

  • Government – take the fixed rent from zamindars and has allowed zamindars that they can charge tax as much as they want.
  • Zamindars – Owner of the land and they take all the things from tillers.
  • Tillers – They do the work on the lands they were holding all the work but they have to give all those things to the government.

As a result, the whole of agriculture was destroyed because the zamindars were spending all the money on fulfilling their needs and the tillers were left with nothing so they were not able to spend on agriculture or lands.

◉ 2. Colonial Exploitation of the Industrial Sector

At the time of Independence, the Indian industry was known for handicrafts. The handicraft was very famous from starting and the Britishers destroyed the whole Industrial Sector.

  • High export duty on handicrafts – now we cannot export raw materials like cotton, and jute because there was a high export duty on them which finished the International Demand.
  • Duty-free import of British goods – from Britain there was a free import of finished goods which were very cheap in rate like cotton cloth, jute bag due to which the domestic demand was finished.

◉ 3. Colonial Exploitation of International Trade

  • Discriminatory tariff policy – the taxation policy was put like this that the international demand, as well as the domestic demand, will finish.
  • Duty-free export of Raw materials – there was no tax on exports from India to Britain, raw materials like cotton, or jute.
  • Duty-free import of Finished goods – there was no tax on imports from Britain to India, Finished goods like cotton cloth, and jute bags.

Also Read :Primary Sector of Economy

► Features of Indian Economy on the eve of Independence

  • Stagnant Economy
  • Backward Economy
  • Agricultural Backwardness
  • Industrial Backwardness
  • Poor Infrastructure
  • Heavy Dependence On Imports

◉ 1. Stagnant Economy:

The economy in which the growth rate is very slow or there is no growth so that time in our economy there were not any resources and all the resources were exploited or destroyed badly. There was no capital base, no industrial base our economy was at a very low growth rate. Due to this in India, there was poverty and a low standard of living.

◉ 2. Backward Economy:

Our economy was that much backward that every industry was finished there was no source of income and people were almost 70% dependent on agriculture and which was also exploited badly. In that case, our per capita income was very low.

◉ 3. Agricultural Backwardness:

Agriculture was also very backward besides we were 70% dependent on agriculture then also our agriculture was very backward because the productivity was very low.

◉ 4. Industrial Backwardness:

If we talk about industries we were not having any type of capital good industry because there was no one to invest money. The government was only focusing on railways, roads, ports, and power generation. There were no heavy industries no basic industries.

◉ 5. Poor Infrastructure:

The condition of infrastructure was very bad or poor. Schools, colleges, bridges, buildings, and dams nothing were developed at that time. As a whole, the economy was very low.

◉ 6. Heavy Dependence on Imports:

We were heavily dependent upon Britain or on other countries for finished goods. Defense pieces of equipment were also coming from outside the local resources were fully destroyed. And the finished goods were very cheap.

► Agriculture Sector on the Eve of Independence

  • Low production and productivity
  • The high degree of uncertainty
  • The dominance of subsistence farming
  • Small and fragmented land holdings
  • Land revenue system under the British raj
  • The gulf between owners and tillers of the soil

◉ 1. Low production and productivity:

The production and productivity were not good. Production means how much output is generated and productivity is the capacity that our land has how capacity per hectare of output. Both were low the production was not good and the productivity was also not good.

◉ 2. High degree of uncertainty:

Uncertainty means the production was very uncertain. It was uncertain because it was dependent on rainfall we don’t have permanent means of irrigation if there is rain so production and productivity were good and if it was not good the production and productivity both were not good.

◉ 3. Dominance of subsistence farming:

Subsistence farming means it’s a system where farmers should grow this much in which they can survive and were not having any type of surplus, no stock and they were not having anything where they can store their food. Because they were having scattered land.

◉ 4. Small and fragmented land holdings:

They were having small-small landholdings in which we cannot bring permanent means of irrigation because we can’t manage everything is going to manage it was very costly.

◉ 5. Land revenue system under the British raj:

Here we will talk about the Zamindari system the government charge the fixed rent from zamindars but zamindars take all things from tillers in an uneven way and they were exploited badly.

◉ 6. Gulf between owners and tillers of the soil:

The owners were living a luxurious life and the tillers even don’t have 1 chappati to eat and they die due to poverty and hunger. There was a major gap between tillers and the owner of the soil.

► Industrial Sector on the Eve of Independence

  • Systematic De-industrialisation
  • Discriminatory tariff policy
  • Competition from machine-made products

◉ 1. De-industrialization: Indian Economy on the Eve of Independence

Our industries were finished systematically. It was divided into 2 parts

(a) Decay of handicraft – the handicraft industry was fully finished because there was free export of raw material and free import of finished goods.

(b) Bleak growth of the modern industry – there was no growth in modern industries because there were few industries we were not having capital goods industry. The government was only on communication, power, railways, and ports. So we were largely dependent on other countries.

◉ 2. Discriminatory tariff policy:

The raw material was exported duty-free from India and from Britain the finished goods were imported duty-free.

◉ 3. Competition from machine-made products:

India has to face a big competition because the goods which were brought from Britain it was of very cheap cost. Our hand-made goods were nothing in front of machine-made goods because the quality was very good.

Unit 1 in the subject “Development Policies and Experience” in CBSE cover this topic in more detail. You can read more about the Indian Economy on the Eve of Independence Here