economy

Indian Economy On The Eve Of Independence

The main purpose of this Topic is to make you familiar with India’s economy in 1947 and present some important factors that leads to underdevelopment and stagnation of the India’s Economy.

The structure of India’s present day economy is not just of current making, It  has it’s root steeped in the history specially British India

It’s important for us to know country ‘s economic  conditions before Independence to understand present economic condition.

Two most important purpose of Britishers are-

*To reduce the India to being a feeder economy for Great Britain’s own rapidly expanding modern industrial base.

*To protect and promote economy interest’s of Britain than with the development of the Indian economy.

Overview of Indian economy during British rule

Before Britishers-Independent economy, agrarian society, India famous for Handicraft Industries(silk, cotton, metal & precious stone works ).

The above two main policy transformed India into a net supplier of raw material and consumer of finished Industrial product from Britain.

Country’s growth rate-less than 2 %(percent)

Per -capita  output-less than half percent.

Under colonial rule

Agriculture sector

Indian society was mainly agrarian society about 85 % of population directly or indirectly involved in agriculture.

Agriculture was continuously stagnated and deteriorated.

Little growth due to expansion of area under cultivation .

Cause for low productivity and stagnation of agriculture during British rule

Low productivity in agriculture during British period is due to land settlement system.

Zamindari system-Profit which came from agriculture went into the hands of Zamindars instead of cultivators.

Zamindars did nothing for the development of agriculture sector because there main aim was to gain profit ignoring whatever the economic condition of cultivators.

Revenue settlement process-zamindars had to deposit fixed amount of money within given date if they fail to do this they lose their rights.

It is one of the reason for the more harsh attitude  of  zamindars towards cultivators .

Ryotwari System

·         Ryotwari System was introduced by Thomas Munro in 1820.

·         In Ryotwari System the ownership rights were handed over to the peasants. British Government collected taxes directly from the peasants.

·         The revenue rates of Ryotwari System were 50% where the lands were dry and 60% in irrigated land.

Mahalwari System

·         Mahalwari system was introduced in 1833 during the period of Warren Hastings.

• The villages committee was held responsible for collection of the taxes.

However, the British officers hardly cared of these rules. This created widespread discontent among the Indians

Low levels of technology

Negligible use of fertilizers

Lack of irrigation facility

Growth-commercialisation of agriculture results in high yield of cash crops in some areas but in no way help farmers because it was used by Britishers  .

Partition-Highly irrigated and fertile land went to Pakistan this affects India’s output.

Industrial sector

Like agriculture industrial sector could not develop during British rule.

World-wide famous Indian handicraft Industries declined during British rule and to take it’s place no other modern industry was allowed to come.

Reason behind failure of industrial sector during British rule

British India wants to make India only exporter of raw material to Britain and feeder of the finished products from Britain .

Result-Unemployment, demand in the Indian consumer market this result in more imports of cheap manufactured goods from Britain.

Positive Impact –Modern industry began to grow during the second half of the 19 century but it’s progress remained very slow.