Chapter-I INDIAN ECONOMY ON EVE OF INDEPENDENCE
CHAPTER :-1
INDIAN ECONOMY ON EVE
OF INDEPENDENCE
COLONIAL
RULE:- it refer to a system between 2 countries
under which one country being the ruler and another being the colony and the
ruling countries determines the economy policy( especial in establishing
settlements or exploiting resources) to
the economy.
STAGNANT ECONOMY:- it refers to the economy which stuck
or very slow at its path of development.
BEFORE
COLONIAL RULE:
1)
Agriculture based economy: 85 %population directly and indirectly depend on
agricultural for employment and living.
2) Only
those crops were grown that are used for self –consumption and for village
artisans
3) Famous
for handicraft industry
4) Enjoy
extensive trade in Asia &Europe
5)
Independent, self-reliant and prosperous economy.Ancient India was called a
“GOLDEN SPARROW” OR “GOLDEN BIRD”
FEATURE
OF INDIAN ECONOMY (ON THE EVE OF INDENPENDENC
1) STAGNANT ECONOMY: - little /no
growth, per capita income low ,no job opportunity
2) BACKWARD ECONOMY:-low per capita
income (1947-48 :-230 rs but in USA 6900 Rs, no sufficient food ,clothing or
shelter , unemployment
3) AGRICULTURE BACKWARDNESS:- 72% people engaged here but
contribution to GDP only 50%,low productivity, sustainable agriculture
4) Industrial backwardness:
5) Heavy dependency on imports:-
6) Poverty:-
7) Limited urbanization:-in 1948 only
14%people lived in urban area,lack of opportunity outside agriculture
8) Poor infrastructure:
9) Limited foreign trade: most of India’s foreign trade was with England and with COMMONWEALTH COUNTRIES.
AGRICULTURE
SECTOR(AT THE EVE OF INDEPENDENCE)
1.
LAND
TENURE SYSTEM:- Three major
systems of land revenue collection existed in India. They were – Zaminidari,
Ryotwari and Mahalwari.
Zaminidari system:- under this system ,ownership right of the land
was transferred from farmers to zamindari. i.e zamindari was the nominal
head of the land who collects the
revenue from farmers(lagan).THAT LAGAN
WAS REGARDLESS TO THE LEVEL OF INCOME OF THE CULTIVATOR.
2.
COMMERCIALIZATION
OF AGRICULTURE:-commercialization
of agriculture means production of crops( COTTON ,JUTE, INDIGO ETC) for sale in
the market rather than for self-consumption. –Production of cash crops, farmers
were given higher price for cash crop,-Britishers use them as raw material.
3.
Low
level of productivity:- lack of irrigation facility, lack of
technology, Negligible use of fertilizer.
4.
High
degree of uncertainty:-
INDUSTRIAL
SECTOR (AT THE EVE OF INDEPENDENCE)
1)Decline
of handicraft industry( De-industrialization):- forced the people to indulge in
agriculture .the 2 fold policy of British rule was enforced to ensure the
maximum advantage of their home country.
— A) To convert Indian economy into the supplier of raw material for their
industries.
— B) To transform India as the consumer of finished products from Britain.
2)
Discrimination tariff policy:- (Reason for decline of handicraft industry)
>Unrestricted entry of British goods.
> Tariff free export of raw material to Britain.
>Heavy duty on export of Indian handicraft products.
3)
Competition from machine made products.
4)
Lack of capital goods industry.
5)
Change in pattern of demand.
6)
Negative effect of Railways.
FOREIGN
TRADE (volume & direction)
Foreign trade (pre-colonial period)
India was well known exporter of finished goods like silk, Handicraft
Ivory work etc.
(DURING
COLONIAL PERIOD)BRITISHER ADOPTED DISCRIMINATORY POLICY
1) Exporter of primary product
and importer of finished goods.
2)Monopoly control on trade.
>Majority of trade is restricted to
Britain.
>Opening of SUEZ CANAL.
>Free
export and import between India and Britain.
— 3) Drain of Indian wealth
during British Rule:- Concept of drain of Indian wealth was given by Dada Bhai Naoroji.
Under
the colonial rule, India became an Exporter of raw material and importer of
finished goods .there was huge export surplus due to excess exports.
However
Export surplus was used:
1) To make
payment for British office and heavy salaries
and pensions to British officers.
2)
To meet expenses on war fought by the British government.
3)To
import invisible items.
DEMOGRAPHIC CONDITION
Demographics is the study
of a population based on social-economic factors such as age, race and sex,
education level, income level, marital status, occupation, religion, birth
rate, death rate.
The first official Census was conducted in the year 1881.
1) High birth rate and death
rate.
>Before 1921 both are very high.(48 & 40)
>year 1921- YEAR OF GREAT DIVIDE
>First stage -> Second stage
2) Low Literacy Rate:- Less
than 16%.
>Female Literacy Rate 7%
3) High Infant Mortality Rate :-( 218/1000).
4)Poor Health Facilities.
5)Low Life Expectancy:- 32 YEARS
6) High Level of Poverty.
OCCUPATIONAL STRUCTURE
Occupational structure is distribution of occupations in
society, classified according to skill level, economic function, or social
status.
>Pre dominance
of agriculture (72.7%).
>Unbalanced
Growth.
INFRASTRUCTURE
It refers to the
basic Physical & organizational structure and facilities required for the
operation of an economy. For example. Railways, road, dams, building.
Ø
Railways:-
Benefits were mostly restricted to Britishers.
Ø
Roadways:
- primarily served the interest of mobilizing the army and shifting of raw
material.
The system of
ELECTRICAL TELEGRAPH was introduced at a high cost to serve the purpose of
maintain law and order.
>Introduction
of Railways.
>commercialization
of agriculture.
>Monetary
system of exchange.
>effective
system of administration.
>Check on
Famines.
Some important:-
1) Some
notable economist like Dadabhai naoroji, V.K.R.V Rao, willam digby, Findlay Shirrao were estimated India ‘s per capital income.
2) TISCO (Tata Iron steel
company) was set up in the year 1907 in Jamshedpur. And other industry in the
fields of sugar,Cement,paper.
3.)The year 1921 is regarded as the defining year for Indian demography. It is also known as the year of the Great Divide, as population growth was scarce before that time. After 1921, India's population growth has remained consistent.
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