Class XI
Indian Economic
Development
Chapter – 1
State of Indian Economy
on Independence
Question-Answers
1. What was the focus of
the economic policies pursued by the colonial government in India? What were
the impacts of these policies?
Ans. The economic
policies pursued by the colonial government in India were concerned more with
the protection of the economic interests of their home country than with the
development of the Indian economy. Such policies brought about a fundamental
change in the structure of the Indian economy i.e., transforming the country
into a supplier of raw materials and consumer of finished industrial products
from Britain. Impacts of these policies:
→ Agriculture practices
remained backward.
→ India became the net
supplier of raw materials and consumer of finished goods from Britain.
→ Insignificant growth
in GDP.
→ Low National and Per
Capita Income.
→ Lack of
Industrialization.
2. Name some notable
economists who estimated Indian’s per capita income during colonial period?
Ans. Dadabhai Naoroji, William Digby, Findlay
Shirras, V.K.R.V. Rao, and R. C Desai.
3. What were the main
causes of India’s agricultural stagnation during the colonial period?
Ans. The main causes of
India’s agricultural stagnation during the colonial period were:
→ Land Settlement
Policies: Colonial government introduced various land settlement policies
such as Zamindari system in which maximum profit coming from agriculture sector
went in the hands of Zamindars instead of cultivators. Neither Colonial
government nor Zamindars did anything to improve condition of agriculture. This
caused immense misery and social tension among cultivators.
→ Revenue Settlement:
The Zamindars were given rights to owed land in return of some specified sum of
revenue, failing which the zamindars were to lose rights. Therefore, the
zamindars adopt stubborn attitude. Drought and famine make situation more
critical.
→ Commercialization
of agriculture: The colonial government forced peasants to grow commercial
crops such as tea, coffee, indigo etc. in order to feed British industries with
cheap raw materials. This commercialization of Indian agriculture not only
increased the burden of high revenues on the poor farmers but also led India to
face shortage of food grains, resources, technology and investment.
→ Heavy dependence on
rainfall for Irrigation: Lack of Irrigation Facilities and Resources:
Indian agricultural sector also faced lack of irrigation facilities,
insignificant use of fertilizers, lack of investment, frequent famines and
other natural calamities, etc. that further exaggerated the agricultural
performance and made it more vulnerable.
→ At the time of partition,
most of the agricultural land which was fertile in jute production went within
the territory of East Pakistan (now, Bangladesh). This also affected Indian agriculture
adversely.
4. Name some modern
industries which were in operation in our country at the time of independence.
Ans. The modern
industries which were in operation in our country at the time of independence
are as follows:
• Cotton Textile
Industries.
• Jute Textile
Industries.
• Iron and Steel
Industries.
• Sugar Industries.
• Cement Industries.
• Paper Industries, etc.
5. What was the two-fold
motive behind the systematic de-industrialization affected by the British in
pre - independent India?
Ans. The two-fold motive
behind the systematic de-industrialization affected by the British in
pre-independent India was:
→ To reduce India to the
status of a mere exporter of exporter of important raw materials for the
upcoming modern industries in Britain.
→ To turn India into a
sprawling market for the finished products of those industries so that their
continued expansion could be ensured to the maximum advantage of their home
country Britain.
6. The traditional
handicrafts industries were ruined under the British rule. Do you agree with
this view? Give reasons in support of your answer.
Ans. Yes, I do agree
with the view that the traditional handicrafts industries were ruined under
British rule. Till the middle of eighteenth century Indian handicraft products
were greatly demanded in the markets all over the world but the policies
followed by colonial government gradually reduced their demand in market:
Discriminatory Tariff
policy of British Govt.:
→ British got raw
materials from India at cheaper rates and sold their machine made items in
Indian markets at cheaper rates than handicraft goods.
→ They also imposed
heavy export duties on India's export of handicraft products, while allowed
free export of India's raw material to Britain and free import of British
products into India.
Disappearance of
Princely Courts:
→ Before British rule in
India, the Indian kings used to provide patronage to Indian handicraft
industry, enabling to acquire international reputation. The British rule
implying end of princely courts lead to the end of this patronage.
Competition from
Machine-made Products:
Machine-made products
from Britain were low-cost products offering variety and thus, gave stiff
competition to handicraft products in India. Even this competition forced Indian
craftsmen to shut-down their enterprise forever.
New Pattern of Demand:
→ The new emerging class
of people keen to adopt western lifestyle changed their pattern of demand in
favour of British products and against the Indian products.
Introduction of Railways
in India:
→ This facilitated
transportation of British products across different parts of the country. Thus,
market for the low-cost British products tended to rise whereas that for the
high-cost Indian handicraft products shrank.
7. What objectives did
the British intend to achieve through their policies of infrastructure
development in India?
Ans. Under the colonial
regime, basic infrastructure such as railways, ports, water transport, posts
and telegraphs did develop. However, the real motive behind this infrastructure
development was not to provide basic amenities to the people but to sub serve
various colonial interests.
Like the roads that were
built primarily served the purposes of mobilizing the army within India and
drawing out raw materials from the countryside to the nearest railway station
or the port to send these to far away England or other lucrative foreign
destinations. The introduction of the expensive system of electric telegraph in
India, similarly, served the purpose of maintaining law and order.
8. Critically appraise
some of the shortfalls of the industrial policy pursued by the British colonial
administration.
Ans. The industrial
policy followed by the British colonial administration was solely to facilitate
the upcoming modern industries in Britain. The primary motive of this
de-industrialization was to reduce Indian into a mere supplier of Britain's own
flourishing industrial base and turn India into a market of Britain's machine
made items.
Though during the second half of the nineteenth century, modern industry began to take root in India but its progress remained very slow.
Though during the second half of the nineteenth century, modern industry began to take root in India but its progress remained very slow.
Initially, this
development was confined to the setting up of cotton and jute textile mills.
Subsequently, the iron and steel industries began coming up in the beginning of
the twentieth century. The Tata Iron and Steel Company (TISCO) was incorporated
in 1907.
A few other industries
in the fields of sugar, cement, paper etc. came up after the Second World War. But,
there was hardly any capital goods industry to help promote further
industrialization in India. Furthermore, the growth rate of the new industrial
sector and its contribution to the Gross Domestic Product (GDP) remained very
small.
Another significant drawback of the new industrial sector was the very limited area of operation of the public sector. This sector remained confined only to the railways, power generation, communications, ports and some other departmental undertakings.
9. What do you
understand by the drain of Indian wealth during the colonial period?
Ans. India has been an
important trading nation since ancient times. But the restrictive policies of
commodity production, trade and tariff pursued by the colonial government
adversely affected the structure, composition and volume of India’s foreign
trade. British became an exporter of primary products and importer of finished
consumer goods.
The most important
characteristic of India’s foreign trade throughout the colonial period was the
generation of a large export surplus. But this surplus came at huge cost to the
country’s economy. Furthermore, this export surplus did not result in any flow
of gold or silver into India. Rather, this was used to make payments for the
expenses incurred by an office set up by the colonial government in Britain,
expenses on war, again fought by the British government, and the import of
invisible items, all of which led to the drain of Indian wealth.
10. Which is regarded as
the defining year to mark the demographic transition from its first to the
second decisive stage?
Ans. The year 1921 is
regarded as the defining year to mark the demographic transition from its first
to the second decisive stage. (Quote some data in short.)
11. Give a quantitative
appraisal of India's demographic profile during the colonial period.
Ans. India's Demographic
conditions during the British rule depict our economy as stagnant and backward.
• Both the birth rate and death rate were as high as 48 and 40 per thousand.
Due to high birth rate and high death rate the population growth was stagnant.
• The Infant Mortality
Rate was also very high of about 218 per thousand. The Life Expectancy Rate was
as low as 32 years while presently it is 63.5 years.
• The literacy rate was
less than 16 percent which denotes social backwardness and gender bias in the
economy. In the absence of
reliable data, it is difficult to specify the extent of poverty at that time
but there is no doubt that extensive poverty prevailed in India during the
colonial period.
12. Highlight the
salient features of India’s pre-independence occupational structure.
Ans. The salient
features of India’s pre-independence occupational structure were:
→ The agricultural
sector accounted for the largest share of work force, which usually remained at
a high of 70-75% while the manufacturing and the services sectors accounted for
only 10 and 15-20% respectively.
→ Another striking
aspect was the growing regional variation. Parts of the then Madras Presidency
(comprising areas of the present-day states of Tamil Nadu, Andhra Pradesh,
Kerala and Karnataka), Maharashtra and West Bengal witnessed a decline in the
dependence of the workforce on the agricultural sector with a commensurate
increase in the manufacturing and the services sectors.
However,
there had been an increase in the share of workforce in agriculture during the
same time in states such as Orissa, Rajasthan and Punjab.
13. Underscore some of
India’s most crucial economic challenges at the time of independence.
Ans. The Indian economy
was a backward economy at the time of Independence:
→ Low Level of
Agricultural Productivity: Over 70 percent of total population of India was
engaged in agriculture but the total output was very low.
→ Industrial Sector:
There were not many industries and capital was mostly invested by foreigners.
Moreover, the need to increase the share of industrial sector to India's GDP
was one of the important economic challenges for India.
→ Lack in
Infrastructure: The famed railway network, needed up gradation, expansion and
public orientation. There was a complete absence of infrastructure for
imparting knowledge or technical skills to the labourers.
→ Poverty and
Inequalities: India was trapped in the vicious circle of poverty and
inequality. The colonial rule drained out a significant portion of India's
wealth to Britain. Consequently, majority of India's population was poverty
trodden. This further exaggerated economic inequalities across the country.
14. When was India's
first official census operation undertaken?
Ans. In the year 1881
India’s first official census operation wan undertaken.
15. Indicate the volume
and direction of trade at the time of independence.
Ans. Due to restrictive
policies of the colonial government India became an exporter of primary
products such as raw silk, cotton, wool, sugar, indigo, jute etc. and an
importer of finished consumer goods like cotton, silk and woolen clothes and capital
goods like light machinery produced in the factories of Britain, For all
practical purposes, Britain maintained a monopoly control over India’s exports
and imports, As a result, more than half of India’s foreign trade was
restricted to Britain while the rest was allowed with a few other countries
like China, Ceylon (Sri Lanka) and Persia (Iran).
16. Were there any
positive contributions made by the British in India? Discuss.
Ans. Yes, there were
various positive contributions that were made by the British in India. The
contributions were not intentional but purely the effects of colonial
exploitation of the British. The following are the positive contributions made
by the British:
→ Introduction of
Railways: The introduction of railways by the British was a breakthrough in
the development process of Indian economy. It opened up the cultural and
geographical barriers and facilitated commercialization of Indian agriculture.
→ Introduction of
Commercialization of Agriculture: The introduction of commercial
agriculture is an important breakthrough in the history of Indian agriculture.
Prior to the advent of the British, Indian agriculture was of subsistence nature.
But with the commercialization of agriculture, the agricultural production was
carried out as per the market requirements. It was due to this factor that
today India can aim at attaining self-sufficiency in food grains production.
→ Introduced Free
Trade to India: British forced India to follow free trade pattern during
the colonial rule. This is the key concept of globalization today. The free
trade provided domestic industry with a platform to compete with the Britain
industries. The introduction of free trade led to an increase in the volume of
India's export rapidly.
→ Development of
Infrastructure: The infrastructure developed in India by the British proved
as useful tool to check the spread of famines. The telegram and postal services
served Indian public.
→ Promoted Western
Culture: English as a language promoted westernised form of education. The
English language acted as a window to the outside world. This has integrated
India with the rest of the world.
→ Ready-reckoner
Administration System: The way and the technique of British administration
acts as a role model for the Indian politicians and planners. It helped Indian
politicians to govern the country in an efficient and effective manner.
