Chapter-1, Notes
Origin and Basic Purpose of British Rule:-
The British rule over India
changed the course of history in India. The foundation of British Empire in
India was laid by Battle of Plassey, fought in 1757.The main purpose of the
British rule in India was to use Indian economy as feeder economy for the development
of British economy. British colonial rule tempered the Indian economy very
badly.
Before the start of British rule, Indian economy has the following features:-
· Prosperous Economy :
India was an independent, self-reliant and prosperous economy.
· Agriculture Economy:
Agriculture was the main source of livelihood for most people and engaged about
two-third of the total population.
· Well Known Handicraft Industries:
Indian was also known for its handicraft industries in the fields of cotton and
silk textiles, metal and precious stone works, etc. Handicraft products enjoyed
a worldwide market due to its reputation of fine quality of material used and
the high standards of craftsmanship.
Meaning of Colonialism
Colonialism refers to a
system of political and social relations between two countries, of which one is
the ruler and the other is its colony. The ruling country not only has
political control over the colony, but it also determines the economic policies
of the dominated country.
Low Level of National Income and Per Capita
Income:-
The economic condition of a
national can be judged with the data of national income and per capita income.
· However,
no sincere attempt was made by the British Government to estimate India’s
national and per capita income.
· Some
individual attempts were made by experts like Dadabhai Naoroji, V.K.R.V Rao and
R.C. Desai. But, all these estimates produced conflicting and inconsistent
results.
· However,
estimates of Dr. Rao on national and per capita incomes were considered very
significant.
· Most
of the studies revealed that country’s growth of aggregate real output during
the first half of the twentieth century was less than 2% and only 0.5% growth
in per capital output per year.
AGRICULTURAL SECTOR
in
pre-British period and during British period
During the pre-British
period, the condition of Indian agriculture was not at all satisfactory.
· India’s
economy under the British colonial rule was overwhelmingly rural and
agricultural in character.
· Nearly
85% of the country’s population lived mostly in villages and derived livelihood
directly or indirectly from agriculture.
· Even
with this large proportion of population
engaged in agriculture, the country was not self-sufficient in food and raw
materials for industry.
Main Reasons for stagnation in Agricultural Sector
The stagnation in the
agricultural sector was caused due to the following reasons:-
1.
Land Settlement System:- The most important
reason for stagnation in agricultural sector was the introduction of ‘Zamindari
System’ by the colonial government.
· Under
this system, profits accruing out of agricultural sector went to the zamindars
in the form of ‘Lagaan’.
· The
main interest of the zamindars was only to collect lagaan regardless of the
economic condition of the cultivator.
· The
dates for depositing specified sums of lagan to British Government were also
fixed, failing which the zamindars were to lose their rights.
· The
zamindars and the colonial government did nothing to improve the condition of
agriculture.
2.
Commercialization of Agriculture:- Commercialization of
agriculture means production of crops for sale in the market rather than for
self consumption.
· During
the British rule, farmers were given higher price for producing cash crops,
like cotton or jute. However, this did not improve the economic condition of
farmers because instead of producing food crops, they were producing cash
crops, which were to be ultimately used by the British Industries.
· Thus,
British rule promoted shifting of crops from food crops to cash crops.
Que:-“Commercialization
of Agriculture resulted in Famines” defend or refute ?
Ans:- I defend statement that
Commercialization of Agriculture resulted
in Famines because of the following Reasons .
· During the British
rule, agriculture was commercialized to cater to the need of the British
industries for necessary raw materials.
· The British
industrialists were always in need of raw materials like cotton, jute,
groundnut, sugarcane, etc. to keep their factories running.
· By offering high
prices, the Indian peasants were attracted to production of commercial crops
instead of food crops.
· The extent of
commercial agriculture went so far as to make many peasants purchase their food
requirements from shops in towns.
This fall in production of food crops was responsible for
frequent famines in India during the British days .
3.
Low level of productivity:- Low levels of
technology lack of irrigation facilities and negligible use of fertilizers
resulted in low level of productivity.
· The
cultivator had neither the means nor any incentive to invest in agriculture.
· The
zamindar had no roots in the villages, while the British rule spent little on
agricultural, technical or mass education.
· All
this made it difficult to introduced modern technology, which caused a
perpetually low level of productivity.
4.
Scarcity of Investment: India’s agriculture was
facing scarcity of investment in terracing flood-control and drainage. Although
somes farmers changed their cropping pattern from food crops to commercial
crops, a large section of tenants, small farmers and sharecroppers* neither had
resources and technology nor had incentive to invest in agriculture.
Industrial Sector during british
rule
India was particularly well
known for its handicraft industries.Like agriculture, India could not develop a
sound industrial base under the British rule. The poor state of Industrial
sector during the British rule is due to the following reasons :
1.
De-industrialization-Decline
of Handicraft Industry:-
British Government systematically destroyed Indian handicraft industries and no
modern industrial base was allowed to come up. The primary motive of British
rule behind the de-industrialization was two-fold:
i.
To get raw material from India at cheap
rates to be used by upcoming modern industries in Britain.
ii.
To sell finished products of British
industries in Indian market at higher prices.
The two-fold policy of
Britain rule was enforced to ensure the maximum advantage of their home
country.
2.
Adverse effects of decline of Handicraft Industry:-
Decline of handicraft industries adversely affected the Indian economy in the
following ways:
i)
High
level of Unemployment: The decline of Indian handicrafts
resulted in unemployment on a mass scale. The displaced artisans were forced to
take up agriculture for their livelihood. This increased the burden of
population on villages and over-crowding in agriculture.
ii)
Import
of Finished Goods: The Indian made goods could not withstand
the foreign competition of machine made cheap goods. It encouraged the import
of manufactured goods from Britain.
3.
Lack of Capital Goods Industries:- Capital goods industry
refer to those industries which can produce machine tools, which are, in turn,
used for producing articles for current consumption.
· During
the British rule, there was hardly any capital goods industry to promote
further industrialization in India.
· British
rulers did not pay any attention for their promotion as they always wanted
Indians to be dependent on Britain, for the supply of capital goods and heavy
equipments.
4.
Low Contribution of Gross Domestic Product (GDP):- The
growth rate of the new industrial sector and its contribution to the GDP
remained very small.
5.
Limited role of Public Sector:- The
limited area of operation of the public sector was also a significant reason
for hardback of the industrial sector. The public sector remained confined only
to the railways, power generation, communications, ports and some other
departmental undertakings.
Que
:- What are the reasons for the Decline
of Handicraft Industry
Ans:-The
main reason for decline of India’s renowned handicraft industry was the
introduction of ‘Discriminatory Tariff Policy’ by the colonial government. This
policy allowed free export of raw materials from India and free import of final
goods of British industry to India. But, heavy duty was imposed on the export
of Indian handicrafts.
As a result, Indian markets
were full of finished goods from Britain which were low priced. It led to the
decline of Indian handicrafts, both in the domestic market as well as the
export market.
Foreign Trade under British rule
India has been an important
trading nation since ancient times. However, the restrictive policies adopted
by the colonial government adversely affected the structure, composition and
volume of India’s foreign trade.
The state of India’s foreign
trade during British rule is discussed as under:-
1. Exporter of Primary Products and Importer of Finished Goods:-
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 British Industries.
2. Monopoly Control of British Rule:- British Government
maintained a monopoly control over India’s exports and imports.
· More
than ½ of India’s foreign trade was restricted to Britain while the rest was
allowed with few other countries like China, Ceylon (Sri Lanka) and Persian
(Iran).
· The
opening of the Suez Canal in 1869 served as a direct route for the ships
operating between India and Britain.
3. Drain of Indian wealth during British rule:-
Under the British rule, India became an exporter of primary products (raw
material) and a importer of finished goods. There was huge export surplus due
to excess exports. However, export surplus was used.
i) To
make payments for expenses incurred by an office set up by the colonial
government in Britain.
ii) To
meet expenses on war fought by the British government.
iii) To
import invisible items.
Demographic Condition during the Colonial rule
The demographic condition
during the Colonial rule is described in the following points:-
1.
High Birth Rate and Death Rate:- Birth Rate refers to
number of children born per thousand in a year. Death rate refers to number of
people dying per thousand persons in a year. Both birth rate and death rate
were very high at nearly 48 and 40 per thousand respectively.
2.
Extremely Low Literacy rate:- The overall literacy
level was less than 16 percent. Out of this, the female literacy level was at a
negligible low of about 7 per cent.
3.
Poor Health facilities:- Public health
facilities were either unavailable to large mass of population or, when
available, were highly inadequate. As a result, water and air-borne diseases
were widespread and took a huge toll on life.
4.
High Infant Mortality Rate:- Infant mortality rate
refers to number of infants dying before reaching one year of age per 1,000
live births in a year. The infant mortality rate was quite alarming-about 218
per thousand, in contrast to the infant mortality rate of 44 per thousand in
2011.
5.
Low Life Expectancy:-
Life
expectancy refers to the average number of years for which people are expected
to like. Life expectancy was also very low-44 years, in contrast to the present
68 years.
6.
Widespread Poverty:-
There
was no reliable data about the extent to poverty. But, there is no doubt that
extensive poverty prevailed in India during the colonial period. The overall
standard of living of common people in India was very low and there was widespread
poverty in the country.
OCCUPATIONAL
STRUCTURE:-
Occupational structure
refers to distribution of working persons across different industries and
sectors. During the colonial period, the occupational structure of India showed
little sign of change. The state of occupational structure during the British
rule can be summarized as under:-
1.
Predominance of Primary Occupation:- The
agricultural sector accounted for the largest share of workforce with
approximately 75%. The manufacturing and service sectors accounted for the
remaining 25%.
2.
Regional Variation:-
Another
striking aspect was the growing regional variation.
· The
states of Tamil Nadu, Andhra Pradesh. Kerala, Karnataka, Maharashtra and West
Bengal witnessed a decline in dependence of workforce on the agricultural
sector with a commensurate increase in the manufacturing and service sector.
· However,
during the same time, there had been an increase in the share of workforce in
agriculture in states such as Orissa, Rajasthan and Punjab.
1.1 INFRASTRUCTURE
The infrastructure
facilities during British rule were very poor. Some efforts were made to develop
basic infrastructure like roads, railways, ports, water transport, post and
telegraphs. But, the main aim motive behind such infrastructural development
was to serve various colonial interests. The state of infrastructure as
inherited from the British rule, is discussed below:-
1.
Roads:- The
colonial administration could not accomplish much on construction of roads due
to scarcity of funds.
· The
roads that were built, primarily served the interest of mobilizing the army and
shifting raw materials.
· There
always remained an acute shortage of all weather roads to reach out the rural
areas during the rainy season. As a result, people living in these areas suffered
badly during natural calamities and famines.
2.
Railways
:- The
most important contribution of the British rule was to introduce railways in
Indian in 1850, The railways affected the structure of the Indian economy in
two important ways:-
i) Railways
enabled people to undertake long distance travel. It broke geographical and
cultural barriers and promoted national integration.
ii) In
enhanced commercialization of Indian agriculture, which adversely affected the
comparative self-sufficiency of the village economies in India.
Railways also promoted the foreign trade but
it benefited the Britishers more than the Indians. The construction of railways
led to huge economy losses to the Indian economy.
3. Air and Water Transport :-
British Government took measures for developing the water and air transport.
However, their development was far from satisfactory.
Inland waterways proved to be uneconomical,
as in the case of the Coast Canal on the Orissa coast. This canal was built at
a huge cost, but it failed to complete with the railways, and finally, canal
had to be abandoned.
4.
Communication:-
Posts and telegraphs were the most popular means of communication.
· The
introduction of the expensive system of electronic telegraph in India served
the purpose of maintaining law and order.
· The
postal services, despite serving a useful public purpose, remained all though
inadequate.
Reason
for Infrastructural Development
The basic objective of
British Government to develop infrastructure was not to provide basic amenities
to the people, but not serve their own colonial interest.
1. The
roads were built for mobilizing the army within India and for drawing out raw
materials from the countryside to the nearest railway station or port and to
send these to England or other lucrative foreign destinations.
2. Railways
were developed by the Britishers mainly for three reasons:-
a) To
have effective control and administrative over the vast Indian territory.
b) To
earn profits through foreign trade by linking railways with major ports.
c) To
make profitable investment of British funds in India.
3. The
system of Electric Telegraph was introduced at a high cost to serve the purpose
of maintaining law and order.
What is the impact of british rule on the Indian economy
Ans:-By the time Indian won its
independence in 1947, the impact of 200 years of British colonial was already
showing on all aspects of the Indian economy. Following points are the clear
proofs of economy underdevelopment during like British period.
· The
constant per capita income over a long period.
· Increasing
dependence of population on agriculture.
· The
Zamindari System.
· Traditional
methods of cultivation.
· High-frequency
of Famines.
· Destruction
of Indian Handicrafts
· Inadequate
industrialization.
All of the above policy of British Government led to the
complete ruin of the Indian economy.
Positive Contributions of British Rule
British Rule also had some
positive effects on the Indian economy. They are discussed as under:-
1.
Self-sufficiency in food grain production: Commercialization of
agriculture initiated by British Government resulted in self-sufficiency in
food grain production.
2.
Better means of transportation:
Development of roads and railways provided cheap and rapid transport system and
opened up new opportunities of economic and social growth.
3.
Check on Famines:
Roads and railways worked as a great check on the occurrences and impact of
famines as food supplies could be transported to the affected areas in case of
droughts.
4.
Shift to Monetary Economy: British rule helped Indian
economy to shift from barter system of exchange (exchange of goods for goods)
to monetary system of exchange.
5.
Effective administrative Setup: The British Government had
an efficient administration system, which served as a ready reckoner for Indian
politicians.
State of Indian economy on the eve of Independence
During the British rule, the
Britishers transformed the Indian economy into a colonial, backward,
semi-feudal, stagnant, backward, depleted and amputated economy.
1.
Colonial Economy
:
In which, colonial exploitation is a long history, spread over nearly 200
years.
· British
rule resulted in huge drain of wealth from India, in order to facilitate
growing British industry with the supply of raw materials from India.
· They
also encouraged commercialization of Indian agriculture to transform Indian
economy into a British colony.
· The
impact of the British colonial policy was deep on India, even at the time of
Independenc.
2.
Semi-feudal Economy: By
the close British period, there were two aspects of the Indian economy.
· Introduction of Feudal System: The
land settlement system gave birth to feudal relations (landlord-tenant
relations). The landlords used to charge very high rate of lagaan and were very
cruel to the cultivators.
· Introduction of Capitalist System: The
establishment of modern industries led to creation of two classes- capitalist
and labourers.
So, India inherited the
features of both feudal and capitalist system in the Indian economy.
3.
Stagnant Economy:
A
stagnant economy is one which is growing at a very low rate. On the eve of
independence, Indian economy was a stagnant economy as country’s growth of
aggregate real output during the first half of 20th century was less
than 2% and growth in per capita output was only 0.5%.
4.
Backward Economy: At
the end of British rule, Indian economy was backward and underdeveloped. The
main reasons for the backwardness of Indian economy were:
· Low
level of productivity.
· Low
per capita income.
· Traditional
methods of agriculture.
· High
birth and death rate.
· Mass
illiteracy.
5.
Depleted (or Depreciated) Economy: At the time of
independence, Indian economy was a ‘Depleted Economy’. Depleted Economy refers
to an economy, where no arrangements have been made to replace the physical
assets, depreciated due to excessive use.
· During
the 2nd World War, Indian industries had to work beyond their
capacities to meet the increasing demand of plant, machinery, equipments, etc.
for the war.
· However,
British rulers did not make any arrangements to replace the depreciated
physical assets. As a result, British rulers had left a seriously depleted
economy.
6.
Amputated Economy: The
Britishers policy of ‘divide and rule’ always promoted discrimination between
various groups on the basis of religion, caste, language and culture.
· As a
result, on the eve of Independence, country was geographically divided into two
parts: India and Pakistan.
· Partition
of the country virtually disrupted the economy due to : (i) Problem of
rehabilitation of large number of refugees from Pakistan; and (ii) Shortage of
raw material for jute and cotton mills as most of the cotton and jute growing
areas went to Pakistan.
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