An Overview of Indian Economy: State of the Indian Economy at the (For CBSE, ICSE, IAS, NET, NRA 2022)

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State of the Indian Economy at The

Time of Independence

India inherited the economy from the British who were ruling this country for their gain. The British were never interested in the development of India or its citizens. Their aim was to exploit the resources of India and take away as much as possible to England. This is the reason why railway lines were laid so that things can be transported to port areas for shipment to England. Even if construction of railways was a positive contribution, it was mostly used to serve the British interest.

At the end of British period some notable economic features were as follows:

Time of Independence

Decline of Handicraft Industry

  • Before the British came to India, Emperors and kings were ruling this land. They promoted the interest of local artisans, carpenters, artists, weavers etc.
  • who were very good at making beautiful paintings, decorating walls, designing textiles and Jewellery, tailoring, making furniture, toys and idols of stones and metals etc. These people were using their labour and local skills to create these things. A lot of concentration and long-time was required to create such things. The Kings՚ courts in various parts of the country.
  • were full of decorative items of various types made of different materials. But when the British came, they defeated the Kings and took over their kingdoms. Towns were destroyed and with this the handicraft industry was also faced closure. An important part of Indian handicraft were the textile handicrafts. In the latter half 19th century England was experiencing changes in production technology. Machine was replacing human labour to produce goods. Producing goods at large scale was becoming easier. More factories were coming up. The British could bring their machine-made textiles and sell in India at a cheaper price and also in large quantities. The British government also made policies to help the British producers only. So Indian handicraft suffered.

Production of Cash Crops

As said above, England was undergoing change in terms of industrialization so factories there were in need of raw materials to produce goods. In order to make textiles raw cotton was needed. Similarly, indigo was in high demand to make prints on textiles. Also, jute, sugarcane, ground nuts were all in great demand in England as they were all needed in factories there. Since these were all cultivated in India, the British offered money to poor farmers of India to raise these crops so that they could send them to England. Since these crops are used in factories as raw materials to produce goods, they are called cash crops. Attracted by money, Indian farmers grew these cash crops for the British who supplied them to factories in England. The factory-made goods were sent for sale in the Indian market. Now the British sold these goods to Indian people and made profit.

Famines and Food Shortage

The worst part of British rule in India had been the frequent occurrences of famines. Famine is a situation wherein many people do not get food to eat and die from hunger and diseases. Famine occurred nearly 33 times during whole British period. The most devastating famine was the Bengal famine of 1943, just four years before independence. More than 1.5 million people died at this time due to lack of food.

Some reasons for occurrence of famines were as follows:

  • Bad rainfall upsetting food grain production since irrigation facilities were not available. Agriculture was dependent on rainfall.
  • British government kept on exporting food grains to its native country England and elsewhere even if there was local need for these things. British government was only interested in earning revenue for itself by exporting food grains to other countries. It also used food grains to feed its soldiers who were fighting wars in different parts of the world. You know that the British had not only captured India, but also many other countries of the world. So, they were sending food from India to these countries where their soldiers were fighting to capture territories.
  • Poor people had not enough money to purchase food grains from the market.
  • As said above, Indian farmers were encouraged to produce cash crops on their fields. This led to fall in production of food grains because less area was available for their cultivation.

Rise of Intermediaries in Agriculture

Agriculture was major occupation of people of India during British rule. More than 70 percent of the population was dependent on agriculture. So, it was the major source of revenue for the government.

The British introduced two types of land revenue, such as:

  • Permanent settlement under which land revenue to be collected was permanently fixed.
  • Temporary settlement under which land revenue was changed after 25 - 30 years of time.

In order to collect revenue, the British appointed Zamindars in eastern part of India, Mahal Wari in western part and Ryotwari in south India. These persons were called intermediaries because they used to act between British Government and common people. Their job was to collect revenue in the form of rent, tax etc. from the villagers, farmers and other households and submit that revenue with the government. Over the years these people became exploiters of common people as they mercilessly collected revenue without considering their poor status. Similarly, no mercy was shown even during poor harvest due to bad rain fall or floods. Out of the total revenue collected from the villagers these intermediaries used to keep a part of it before depositing with the British government. Besides collection of land revenue, the British government also depended on them for running the administration. In this way the Zamindars, Mahal Wari and Ryotwaris became mini rulers in their respective areas. They used force to take away belongings of persons who failed to give revenue. This way these intermediaries became rich and powerful at the cost of common man and with the blessings of British government.

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