Question

NCERT Solutions Class 12, Economics, Indian Economic Development, Chapter- 1, Indian Economy on the Eve of Independence

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Concepts covered in Class 12 Economics, Indian Economic Development, Chapter- 1 Indian Economy on the Eve of Independence, are-

• Introduction
• Low level of economic development under the colonial rule
• Agricultural sector
• Industrial sector
• Foreign trade
• Demographic condition
• Occupational structure
• Infrastructure

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Answer 1

NCERT Solutions Class 12, Economics, Indian Economic Development, Chapter- 1, Indian Economy on the Eve of Independence

1. What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?

Solution:

The main aim of the economic policies adopted by the colonial government was to make India just a supplier to Britain’s flourishing industries. The policies were made to benefit and strengthen their own country. They completely ignored the interests of the Indian economy. These discriminatory policies made the Indian economy a supplier to British economy and consumer of finished goods of British economy. The effects of these policies are given below:

1) Low Economic Development

During British rule, there was a very little economic development. This was because the British government was more focused on the promotion of their own economic interest. Consequently, the colonial rule converted India's agriculture sector into a supplier of raw materials for the British industrial base. This affected the production of the agricultural sector of India. It also destroyed the small manufacturing industries such as handicrafts and cotton industries. These manufacturing units suffered a cut throat competition from the British machine made textiles and handlooms.

2) Backwardness of Indian Agriculture

India was basically an agricultural economy employing almost of its population in the colonial rule. There was a meagre growth in agriculture sector. It was caused by the presence of various land settlement systems, particularly the Zamindari system. In this system, the zamindars (landowners) had to pay very high revenue (lagaan) to the British government, which they collected from the peasants (landless labourers). The zamindars were focused on extracting high revenues from the peasants but never took any interest in the improvement of the productivity of the land using cheap raw materials. As a result, Indian peasants grew cash crops (e.g., indigo and cotton) in order to feed British industries at the expense of food crops instead of food crops (such as, rice and wheat). This commercialisation of agriculture increased the burden of high revenues on the poor peasants. It also led Indians face shortage of food grains. Hence, Indian agriculture remained backward and primitive.

3) De-industrialisation of Indian Economy

India, during colonial era, was not able to develop a sound and strong industries. The term 'systematic de-industrialisation' can be used to define the status of industrial sector during the colonial rule. The downfall of India's handicraft industry led to deindustrialisation and the cause of meager growth of modern industry was the lack of investment. Indian handicraft products were taxed heavily by the British government, which permitted free exports to Britain of raw materials and free imports of British products from India. Because of these, the Indian exports became dearer and its demand in the international market fell miserably that led to the decline of Indian handicrafts industries. Simultaneously, the demand for the Indian products fell in the domestic markets as machine made textiles were cheaper than Indian handicrafts. Hence, the domestic industries lacked investment and growth initiatives.

4) Regression in Foreign Trade

In the colonial era, the British government had the monopoly over India's foreign trade. According to the British government, the trade policies were based on the government's interests. Until the end of the 19th century, exports and imports were restricted to India and Britain. India's exports provided cheap raw materials for the British industries, and Britain's imports from India provided a untouched market for British goods. In every way, British industries were benefitted. The surplus money generated from the foreign trade was not even invested in the Indian economy. It was used for administrative and war activities by Britain.

2. Name some notable economists who estimated India’s per capita income during the colonial period.

Solution:

The following economists estimated India’s per capita income during the colonial period:

1. Dadabhai Naoroji
2. R.C Desai
3. V.K.R.V. Rao
4. William Digby
5. Findlay Shirras

3. What were the main causes of India’s agricultural stagnation during the colonial period?

Solution:

Indian economy during the colonial era remained basically agrarian. About 85 percent of the population who were living mostly in villages derived their livelihood directly or indirectly from agriculture. A very low growth rate was recorded in the agriculture sector. The reasons that explain why there was stagnancy in Indian agriculture sector during the colonial rule are:

1) Introduction of Land Revenue System

India was basically an agricultural economy employing almost of its population in the colonial rule. There was a meagre growth in agriculture sector. This was due to the presence of various systems of Land Settlement, particularly Zamindari system. The zamindars (owners of land) needed to pay very high revenue (lagaan) to the British government, which they collected from the peasants (landless labourers). The zamindars focused on receiving high revenues from the poor landless labourers but never took any interest in the improvement of the productivity of the land with cheap raw materials. This resulted in low agricultural productivity and also degraded the peasants economically.

2) Forceful Commercialisation

Before the colonial era, the farmers used to practise conventional subsistence method of farming. They used to grow food crops like rice and wheat for own consumption. Then, in order to provide British industries with cheap raw materials, the Indian farmers were forced to grow commercial crops (like indigo required by British industries to dye textiles) instead of food crops .The result was the commercialization of Indian agriculture. As a result of this commercialization of Indian agriculture, the poor farmers were not only burdened by high investment costs, but they also faced a shortage of food grains, resources, and technology. Therefore, Indian agriculture remained backward and primitive.

3) Facilities and resources were lacking for irrigation

The Indian agricultural market also encountered shortages of irrigation facilities, inadequate fertilizer use, little investment, and occasional famines and natural disasters, etc. that further exaggerated the agricultural performance and made it more vulnerable.

4. Name some modern industries which were in operation in our country at the time of independence.

Solution:

India witnessed the growth of some industries before independence, the most prominent of which is Tata Iron and Steel Company (TISCO). India was also witnessing a growth of textile mills and ancillary products. Maharashtra, Gujarat, and Bengal were areas where cotton and jute industries were set up. Apart from these industries, some other industries that started operating are sugar, paper and cement.

5. What was the two-fold motive behind the systematic de-industrialisation affected by the British in pre-independent India?

Solution:

The two-fold motives behind de-industrialisation by the British were as follows:

1. Obtaining raw materials from India at rock-bottom prices and reducing the status of India as a supplier of raw materials for feeding its industries back in Britain.

2. Selling the finished goods in India and thereby making India a market for selling items produced by British industries.

6. The traditional handicrafts industries were ruined under British rule. Do you agree with this view? Give reasons in support of your answer.

Solution:

Yes, the traditional handicraft industry was ruined under British rule. The following points are in agreement with this statement:

1. The British had introduced a discriminatory tariff policy. This led to a high export tariff on Indian-made goods, which made the price of products high in international markets, leading to less demand for Indian-made goods. Consequently, this ended up ruining the handicraft industry.

2. As Britain began importing duty-free goods from Britain to India, the demand for locally made goods started decreasing as the mechanically produced goods were much cheaper. This resulted in ruining the market for handicrafts.

3. The princely states of India used to provide patronage to local art and handicraft, but during British rule, the princely states were ruined by the East India Company, which thus resulted in a decrease in demand for Indian-made goods. Indian handicrafts gradually lost their market and diminished.

Answer 2

7. What objectives did the British intend to achieve through their policies of infrastructure development in India?

Solution:

Under the British rule, infrastructure development in the country was significant. The British, however, had no other motive than colonial interests in mind when they were developing the infrastructure. Transportation and communication infrastructures were developed. In addition to roads, ports were also constructed for the ease and fast transportation of goods to and from Britain, as well as to facilitate transport of raw materials. Similarly, railways were introduced and developed to transport finished goods from British industries to India's interior. Railways facilitated the expansion of the market for British industries. British administration was made more efficient and effective by post and telegraph. Therefore, infrastructural development was not aimed at the growth and development of the Indian economy, but at serving its own interests. British rulers developed infrastructure in India to have effective control and administration of Indian Territory, to make money through foreign trade, to take advantage of profitable investment and to mobilise the Indian army.

8. Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.

Solution:

The aim of British rule was to make India a source of raw materials to feed the industries back in Britain and present India as a virgin market for the finished goods from Britain. The policies created by them were for the development of industries in Britain. 

The industrial policy had the following shortfalls:

1) British neglected the developed handicraft industries to deprive India of revenue from exports. Indian handicrafts had high demand all over the world, but due to the high export tariffs imposed on goods exported from India, the price of products raised exponentially, which impacted its demand and led to the collapse of the handicraft industry.

2) Indian industries suffered from a lack of investment in machinery, and the British government was not at all interested in assisting the growth of industries. Therefore, growth significantly decreased.

9. What do you understand by the drain of Indian wealth during the colonial period?

Solution:

The economic policies of the British Government were primarily aimed at amassing wealth from India. India had extensive resources, which the British found highly useful for fulfilling the industrial requirements of Britain. Britain also utilized India’s manpower to increase its industrial operations and expand bases outside of India. All these expenses were borne by the Indian exchequer. Therefore, it can be said that British rule drained wealth from India during the 19th Century (colonial period).

10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?

Solution:

The year 1921 is regarded as the defining year. 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 was consistent.

11. Give a quantitative appraisal of India’s demographic profile during the colonial period.

Solution:

The demographic profile of India during the colonial period is as follows:

1. The Birth Rate was high at 48 per thousand and the Death Rate at 40 per thousand, respectively.
2. Infant Mortality Rate was 218 per thousand, which is very high.
3. Life Expectancy rate was 32 years on average.
4. The literacy rate was below 16 per cent, which shows the backwardness of the society.

From the above data, it can be inferred that India was undergoing a phase of poverty, low standard of living and low survival rate. This situation was aggravated by the absence of healthcare facilities and a lack of health-related awareness among the Indian population.

12. Highlight the salient features of India’s pre-independence occupational structure.

Solution:

It refers to the distribution of the workforce among the different sectors of the economy.

The following points define India’s occupational structure at the time of pre-independence:

1) India was primarily an agrarian economy, which consisted of more than 75 % of the population involved in agriculture as a source of sustenance, while the rest was divided among the manufacturing and service sectors. The number of people in the manufacturing and industrial sectors was less due to the tough competition they got from cheap goods from Britain, which were machine-made. Britain imposed a high tariff on export, thereby restricting the growth of industries. Hence, industries did not contribute well to the GDP of India.

2) India witnessed regional variation in occupational structure; it was seen that states like Andhra Pradesh, Tamil Nadu, West Bengal and cities like Bombay had experienced more concentration of work in production and manufacturing while states like Punjab, Orissa and Rajasthan had more population that was shifting towards agriculture.

13. Underscore some of India’s most crucial economic challenges at the time of independence.

Solution:

Crucial challenges at the time of independence are as follows:

• Low Agricultural Output was one factor which was due to the colonial impact on the country. Only items that were of monetary importance to the government were grown
• Low level of industrialisation and decline in handmade products
• Low levels of national income and per capita income
• A low standard of living, low expectancy and high infant mortality rate
• High level of unemployment and gross underemployment

14. When was India’s first official census operation undertaken?

Solution:

In 1881, India conducted its first official census. From then on, every 10 years a census has been conducted. A complete demographic profile of the country is provided alongside the detailed estimation of population size.

15. Indicate the volume and direction of trade at the time of independence.

Solution:

India's export of handicraft products was issued heavy tariffs (export duties) during the British colonial rule, while raw materials and British products were freely exported from the country to Britain. India's international demand plunged as a result, which made exports more expensive. During the colonial rule of India, India's export basket mainly consisted of primary products such as sugar, jute, and silk, while its imported basket included finished consumer goods such as cotton. Over half of India's trade was restricted to Britain due to the monopoly that India held over its exports and imports. The remainder of India's imports were directed towards China, Persia, and Sri Lanka. After the Suez Canal was opened, British monopoly over India's foreign trade was further enhanced. This resulted in the rapid movement of goods from India to Britain and vice versa. Foreign trade surpluses generated by India were not invested in the Indian economy, but were used for administration and war. India's wealth was drained to Britain as a result.

16. Were there any positive contributions made by the British in India? Discuss.

Solution:

Yes, the Britishers though exploited India very much but made various positive contributions. The contributions were not intentional but were purely the byproducts of colonial exploitation of the British. 

The British have made the following positive contributions:

1. Introducing the railways: It was British railways that provided a breakthrough in the economic development of India It opened up the cultural and geographical barriers and facilitated commercialisation of Indian agriculture.
2. A brief introduction to commercial agriculture: Commercial agriculture introduced in India is an important step forward in its history. Subsistence agriculture was the norm in India prior to the British era. However, with the commercialisation of agriculture, the agricultural production was carried out as per the market requirements. The development of this factor has allowed India to attain self-sufficiency in grain production today.
3. Introduction of Free Trade to India: During the colonial period, the British forced India to comply with free trade. Globalisation today revolves around this concept. Domestic industry was given a competitive platform to compete with British industries through the free trade agreement. India's export volume increased rapidly after free trade was introduced.
4. Developing Infrastructure: The British developed infrastructure in India which proved beneficial in preventing famines. The telegram and postal services provided services to Indians.
5. The western culture was promoted: Introducing English as the language of education gave birth to a westernized form of education. The English language provided a window to the rest of the world. As a result, India is now integrated into the global economy.