Indian Economy On The Eve Of Independence Flashcards
(20 cards)
Indian economy prior to British rule
1.Prosperous economy
2.Agrarian economy
3.Worldwide famous handicraft industry
Indian Economy during the British rule
1.Stangant economy
2.Backward economy
3.Dominace of agriculture
4.Semi- fedual economy
5.Bleak industrialisation
6.Dependence on imports
7.Limited Urbanisation
How was India a stangant economy
- Shows little or no growth
- aggregate output was less than 2 %
-Per capita output was just 0.5%
-Standard of living of people was extremely low
How was Indian economy a backward economy
- Backward economy has very low per capita income
- In 1947-48 Per capita income was just ₹230
- Bulk of population was poor due to widespread unemployment caused by destruction of handicraft industries.
Dominance of Agriculture
- principal source of agriculture
- 72 % of population engaged in agriculture
- But the contribution of agriculture to GDP was just 50%
- This indicated backwardness of this sector
- suffered from low productivity
Bleak industrialisation
- British systematically destroyed Indian handicraft industries by discrimatry polices
- Small and cottage industries were almost ruined
-heavy industries showed bleak growth. - We were heavily dependent on Britain for the import of capital goods.
Heavy dependence on imports
- For capital goods and equipment of production
- Armed forces for defence equipments
Limited Urbanisation
-Bulk of population lived in rural areas about 86%
-only 14% lived in urban areas.
-Rural population lacked opportunities outside agriculture
Semi - feudal economy
- an economy which is neither feudal nor capitalist economy
-This resulted in low productivity which leads to backwardness
State of Agricultural sector
- primarily agrarian economy
-suffered from deep stagnation and chronic backwardness
1.Low production and productivity
- Production= total output
-Productivity=per hectare output - Both were extremely low
Because of lack of means with farmers and tillers of soil
Exploitative land settlement system
- British introduced Zamindari system under which
- Zamindars were considered as permanent owners of land
-They were to pay a fixed sum to the British govt.
-They were free to extract as much as they could from the tillers of the soil , their only interest was revenue maximization .
Effects of land settlement system
- led to unlimited exploitation of tillers
- Rates of land revenue were frequently raised
- Tillers were reduced landless labourers
Forced commercialisation of agriculture
- Shift from Subsistence to cultivation of cash crops .
-farmers were forced to shift to produce indigo.
-this exposed farmers to uncertainties of the market - it also raised the credit needs of farmers which led to their perpetual indebtedness
Lack of investment in agriculture
- Colonial govt or Zamindars took no interest in promoting agricultural investment
- Low level technology
- No irrigation facilities
- No fertilizers
-Agriculture was heavily dependent on rainfall and was uncertain
-Flood control and drainage were totally neglected
Small and fragmented land holdings
- Lang holdings were small and fragmented ( piece of land here piece of land there)
- most Lang holdings were uneconomic
-Yeiled low output at high cost
Subsistence outlook
-Farming was mostly Subsistence
- implying a lack of commerical outlook
- Accordingly backwardness prevailed and poverty dominated
Charterstics of backwardness
- Low productivity and production
2.Lack of investment in agriculture - Small and fragmented land holdings
- Subsistence outlook
Charterstics of Stagnation
- Exploitative land settlement system
2.Forced commercialisation of agriculture
3.Gulf b/w owner and tillers of soil
State of Industrial sector
- British government systematically de- industrialized the Indian Handicraft industry
2.discriminatory tariff policies
3.Bleak industrialisation
