Indian Economy On The Eve Of Independence - Class 11 Economics - Chapter 1 - Notes, NCERT Solutions & Extra Questions
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Notes - Indian Economy On The Eve Of Independence | Class 11 Indian Economic Development | Economics
Indian Economy on the Eve of Independence: Class 11 Notes
Understanding the state of the Indian economy before 1947 provides essential context for appreciating the economic progress made post-independence. This article delves into the various facets of the Indian economy during British colonial rule, examining the agricultural and industrial sectors, foreign trade, demographic conditions, and more.
Introduction
In 1947, the Indian economy was marked by underdevelopment and stagnation. British colonial policies focused on protecting and promoting British economic interests, leaving India's economy in a state of disrepair. For Class 11 students, understanding this history is crucial for comprehending contemporary India's economic challenges and achievements.
Economic Landscape Before Independence
Pre-British Era
Before British rule, India had a vibrant and independent economy characterised by agricultural and manufacturing activities, particularly in handicrafts like cotton and silk textiles.
Colonial Impact
British rule drastically altered India's economic structure. The country was reduced to a supplier of raw materials for British industries and a market for their finished products, leading to the deindustrialisation of local craft industries.
Agricultural Sector
State of Agriculture
During British rule, about 85% of India's population lived in villages and depended on agriculture. However, the sector saw stagnation and even deterioration despite some growth in the area under cultivation.
Land Revenue Systems
Land revenue systems like the zamindari system resulted in profit for zamindars (landowners) at the expense of cultivators, causing immense misery and low agricultural productivity. Factors such as low technology, inadequate irrigation, and minimal use of fertilisers exacerbated the situation.
Industrial Sector
Decline of Handicrafts
India's once-thriving handicraft industries faced a severe decline as the British systematically deindustrialised the nation.
Emergence of Modern Industries
The slow progress in establishing modern industries confined largely to cotton and jute mills during the late 19th and early 20th centuries marked a modest beginning. The Tata Iron and Steel Company (TISCO), established in 1907, was a significant development in this area.
Foreign Trade
Trade Dynamics
British policies restricted Indian trade, transforming the country into an exporter of primary products and an importer of British finished goods. This trade imbalance led to an exploitative export surplus, draining Indian wealth.
Suez Canal
The opening of the Suez Canal in 1869 facilitated British control over Indian trade, reducing transportation costs and making access to Indian markets more profitable for Britain.
Demographic and Social Conditions
Population Statistics
The first census in 1881 highlighted uneven population growth in British India. By independence, literacy rates were low, health facilities inadequate, and mortality rates high, with an infant mortality rate of 218 per thousand.
Occupational Structure
Workforce Distribution
During colonial rule, the majority of the workforce (70-75%) was engaged in agriculture, with minimal employment in manufacturing and services. There were notable regional variations, with some areas experiencing a shift towards non-agricultural sectors.
Infrastructure Development
Railways and Roads
The British introduced railways in 1850, significantly impacting India's economy by facilitating long-distance travel and commercialisation of agriculture. However, the primary motive behind infrastructure development was to serve colonial interests.
Other Developments
Inland waterways and telegraph systems were also developed, although these were often inadequate or uneconomical.
graph TD;
A[Infrastructure Development by British] --> B[Railways]
A --> C[Roads]
A --> D[Inland Waterways]
A --> E[Telegraph Systems]
B --> F[Commercialisation of Agriculture]
B --> G[Facilitated Long-distance Travel]
D --> H[Uneconomical Operations]
Post-Independence Planning and Development
Planning Commission and Five-Year Plans
Post-independence, India's Planning Commission and Five-Year Plans aimed to address the economic challenges inherited from British rule. The plans focused on modernising agriculture, industrialising the economy, and improving social welfare.
Conclusion
By the time of independence, India's economy was in a challenging state due to two centuries of exploitative British policies. Agricultural productivity was low, industrial development minimal, and infrastructure required significant upgrades. Understanding this historical context is crucial for appreciating the strategies adopted in post-independence India to foster economic development and growth.
Recap for Class 11 Students
- Colonial Impact: British policies prioritised their economic interests, leading to stagnation and underdevelopment in India.
- Agriculture: Dominated by outdated practices and exploitative land revenue systems.
- Industry: Decline of handicrafts and slow industrial growth, with initial strides in modern industries like TISCO.
- Trade: Imbalanced trade dynamics favouring British interests.
- Demographics: Low literacy, poor health facilities, and high mortality rates.
- Infrastructure: Development aimed at serving colonial purposes, with significant gaps in meeting local needs.
Understanding these points provides a solid foundation for exploring how post-independence policies sought to remedy these issues and lay the groundwork for a robust, self-reliant economy.
By studying the Indian economy on the eve of independence, Class 11 students can gain valuable insights into the historical challenges and subsequent strategies that have shaped modern India’s economic landscape.
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Extra Questions - Indian Economy On The Eve Of Independence | Indian Economic Development | Economics | Class 11
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What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?
The economic policies pursued by the colonial government in India were primarily focused on the protection and promotion of British economic interests rather than the development of India. These policies aimed at transforming India into a supplier of raw materials and a consumer of finished products from Britain. The impacts of these policies were detrimental; they led to a systematic deindustrialization of India's traditional handicraft industries, creating massive unemployment and making India reliant on British goods. Furthermore, these policies contributed to the stagnation of agriculture and prevented the development of a modern industrial base, inhibiting economic growth and leading to widespread poverty and underdevelopment.
Name some notable economists who estimated India’s per capital income during the colonial period.
Notable economists who estimated India's per capita income during the colonial period include:
Dadabhai Naoroji - Often referred to as the "Grand Old Man of India," he was among the first to make estimations about India's national income and per capita income during the British rule.
William Digby - He worked on the economic conditions and per capita income estimates in the late 19th century.
V.K.R.V. Rao - He conducted detailed studies on India's national income and made credible estimates of per capita income during the colonial era.
These early estimates helped lay the groundwork for understanding the economic conditions and impacts of colonial policies in India.
What were the main causes of India’s agricultural stagnation during the colonial period?
The main causes of India's agricultural stagnation during the colonial period were:
- Zamindari System: Profits from agriculture went to zamindars who did little to improve the condition of agriculture, focusing only on rent collection irrespective of farmers' economic conditions.
- Lack of Investment: There was a notable absence of investment in necessary agricultural infrastructure like irrigation, technology, and fertilizers which directly affected productivity.
- Commercialization of Agriculture: The shift from food crops to cash crops to meet British industrial needs deprived farmers of the potential benefits of agricultural advancements and their focus remained on less-profitable traditional farming.
- Exploitative Taxation: High revenue demands by colonial authorities left little capital with farmers to invest in improving agricultural practices or adopting new technologies.
Name some modern industries which were in operation in our country at the time of independence.
At the time of independence in 1947, India already had several modern industries in operation. Some of these included:
Textile Industry: One of the oldest and largest industries, particularly cotton textile industries in cities like Mumbai and Ahmedabad.
Jute Industry: Concentrated mostly in West Bengal, with Kolkata being a major hub.
Iron and Steel Industry: Tata Iron and Steel Company (TISCO) in Jamshedpur is a prominent example.
Paper Industry: There were several paper mills producing various types of paper.
Cement Industry: Several cement plants were operational, meeting the demands for infrastructure and construction.
These industries laid the foundational stone for India's industrial sector, helping propel economic growth post-independence.
What was the two-fold motive behind the systematic deindustrialisation effected by the British in pre-independent India?
The two-fold motive behind the systematic deindustrialisation effected by the British in pre-independent India was:
To Serve as a Market for British Manufactured Goods: India was transformed into a large consumer market for British goods. By deindustrialising India, the British ensured that Indian consumers had to rely on imported British products rather than locally produced goods. This helped the British industries expand and prosper by creating a reliable market for their products.
To Source Raw Materials for British Industries: Deindustrialisation also ensured that India remained a primary producer of raw materials. By dismantling local industries, the British ensured that India would supply raw materials, such as cotton, at low prices to feed the British industries. This enabled British manufacturers to reduce their production costs and maintain a competitive advantage in the global market.
The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.
Yes, I agree that traditional handicraft industries were ruined under British rule. Here are the reasons:
- Systematic Deindustrialization: British policies systematically destroyed local handicrafts to make India a market for British manufactured goods.
- Import of British Goods: Cheap, mass-produced industrial goods from Britain flooded the Indian market, making it impossible for handmade products to compete on price and scale.
- Loss of Export Markets: British trade policies were structured to favour the exports of raw materials and the import of finished goods, which diminished the international demand for Indian handicrafts.
- Decline in Quality and Innovation: With the focus shifted to serving as a raw material supplier, there was little scope for quality improvement or innovation in handicraft industries.
- Economic Exploitation: Exploitative economic policies, high taxes, and stringent regulations impoverished craftsmen, many of whom were compelled to abandon their crafts and seek alternative livelihoods in agriculture or manual labour.
What objectives did the British intend to achieve through their policies of infrastructure development in India?
The British had specific objectives behind their infrastructure development policies in India, which included:
- Facilitating Military Movement: The construction of roads, railways, and other transport systems primarily aimed to mobilize the army efficiently within India, ensuring control and suppression of any resistance against colonial rule.
- Economic Exploitation: Infrastructure like railways and ports were developed to expedite the extraction and export of raw materials from India to Britain and import finished goods, fueling Britain's industrial growth.
- Maintaining Colonial Control: Telegraph and postal services were introduced to enhance communication for administrative and military control, helping maintain law and order.
- Minimizing Expenditure on Welfare: Despite some infrastructure developments, these were largely inadequate for public welfare, as the primary intent was not to improve the lives of Indian people but to serve colonial interests.
Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.
The British colonial administration pursued an industrial policy that notably deindustrialized India, leading to severe economic and social impacts. The primary aim was to make India a supplier of raw materials to fuel Britain's industrial growth, inhibiting the development of local industries. Iconic handicraft industries declined without the establishment of a modern industrial base, resulting in a significant loss of employment and skill levels. Furthermore, the focus of the limited industrial development was on sectors such as cotton and jute to serve British needs, not India's developmental requirements. This resulted in a narrow industrial base, leaving India dependent and underdeveloped. The absence of a capital goods industry meant limited self-sustaining growth, reinforcing economic stagnation.
What do you understand by the drain of Indian wealth during the colonial period?
The drain of Indian wealth during the colonial period refers to the process where Britain exploited India’s economic resources for its own benefit, leading to significant economic loss and deprivation in India. Key points include:
- Economic Exploitation: Colonial policies designed to turn India into a source of raw materials and a consumer of British manufactured goods, leading to the suppression of Indian industries.
- Export Surplus Utilization: Export surplus generated from India was not used for the country's development but to pay for Britain's colonial administration, wars, and other expenditures abroad.
- Monopoly Over Trade: Britain maintained control over India's foreign trade, limiting India’s trade with other countries, which restricted economic growth and diversification.
- Negligible Economic Reinvestment: Wealth extracted from India was rarely reinvested in the local economy; instead, it supported the British economy, particularly during industrialization.
This systematic extraction left India impoverished and underdeveloped by the end of colonial rule.
Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?
The defining year that marked the demographic transition from its first to the second stage in India is 1921. This period is often referred to as the "Year of the Great Divide" in the context of India's demographic history. Before 1921, India was in the first stage of demographic transition characterized by both high birth rates and high death rates, resulting in a relatively stable population with minimal growth. After 1921, India began transitioning into the second stage, where death rates began to decline significantly due to improvements in public health and sanitation, while birth rates remained high, leading to a rapid population growth. This shift significantly impacted the population structure and growth patterns in the country.
Give a quantitative appraisal of India’s demographic profile during the colonial period.
During the colonial period, India's demographic profile was marked by low growth and poor health conditions. The first reliable census in 1881 opened insights into population statistics, which reported skewness in population growth. Before 1921, India was in the first stage of demographic transition, characterized by high mortality and low growth rates. Literacy levels were dismal; overall literacy was less than 16%, and female literacy was about 7%. Health facilities were inadequate leading to widespread diseases, high infant mortality rates at 218 per thousand, and low life expectancy of just 32 years. Extensive poverty prevalent during this era contributed to a grave demographic profile, with a significant part of India’s population living in harsh conditions.
Highlight the salient features of India’s pre-independence occupational structure.
During the colonial period, the occupational structure of India exhibited minimal change, with the agricultural sector dominating the workforce, engaging approximately 70-75% of the population. The manufacturing and services sectors were significantly smaller, representing only about 10% and 15-20% respectively. Notably, there was a marked regional variation; regions like parts of the then Madras Presidency, Bombay, and Bengal saw a decreased reliance on agriculture coupled with a rise in manufacturing and services. In contrast, states such as Orissa, Rajasthan, and Punjab witnessed an increase in agricultural labor. This occupational distribution underpinned the economic stagnation and limited industrial progress in pre-independence India.
Underscore some of India’s most crucial economic challenges at the time of independence.
At the time of independence, India faced enormous economic challenges shaped by two centuries of colonial rule. The agricultural sector, which employed the majority of the population, suffered from surplus labor and low productivity and was dominated by subsistence farming rather than commercial output. The industrial sector was underdeveloped and crying for modernisation and diversification, with little in the way of a capital goods industry to spur further industrial growth. Foreign trade was heavily skewed towards the interests of Britain, focusing mainly on the export of raw materials. The infrastructure, though somewhat developed, was inadequate and primarily catered to colonial needs, not public welfare. Widespread poverty and high unemployment demanded a welfare-oriented public economic policy. These challenges required a strategic redirection towards self-sustained national growth.
When was India’s first official census operation undertaken?
India’s first official census operation was undertaken in 1881. This census, despite its limitations, revealed the unevenness in India's population growth and provided a crucial base for demographic studies.
Indicate the volume and direction of trade at the time of independence.
- Direction of Trade: At the time of independence, India's foreign trade was predominantly with Britain. More than half of India's external trade was with Britain, while the remaining trade was with a few other countries like China, Ceylon (Sri Lanka), and Persia (Iran).
- Volume of Trade: India was a major exporter of primary products such as raw silk, cotton, wool, sugar, indigo, and jute. The country also imported finished goods like clothes and light machinery primarily from Britain.
- Monopolistic Control: Britain maintained a virtual monopoly over India's international trade, controlling both the exports and imports which adversely affected the Indian economy.
- Economic Impact: The trade structure established during colonial times led to an economic drain, where the benefits of trade surpluses largely supported the British economy rather than contributing to Indian economic growth.
Were there any positive contributions made by the British in India? Discuss.
While the British rule in India is marked predominantly by exploitation and economic suppression, there were a few contributions that had a lasting positive impact:
- Railway System: The establishment of a widespread railway network facilitated long-distance travel and communication within the country, improving trade and mobility.
- English Education: Introduction of the English language and education system, which formed the foundation for modern education in India.
- Legal and Administrative Systems: Establishment of a structured administrative framework and a legal system, which have continued to govern the public and judicial affairs till today.
- Scientific Research: Founding of scientific institutions like the Indian Agricultural Research Institute and Geological Survey of India, which aided in future developmental works.
These infrastructures laid down a rudimentary foundation for India’s post-independence growth, although their primary intent was to serve colonial interests.
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