CBSE Class 11 Economics Indian Economy On The Eve Of Independence

AGRICULTURE SECTOR
“During the British colonial rule, despite being the occupation of about 85% of India's population, the agriculture sector continued to experience stagnation and, not infrequently, unusual deterioration. Agricultural productivity became low." Do you agree with the above statement? Give valid reasons in support of your answer.

1. Land Revenue system: -
• Under the Zamindari system the Zamindars exploit the cultivator by imposing lagan irrespective of their Poor economic condition
• Zamidars took the land of farmers when they were not able to deposit the Lagan on fixed dates
• Profit accruing out of the agriculture sector went to the Zamindars instead of the cultivators did nothing to improve the condition of agriculture.

2. Force Commercialization of agriculture: -
• British transformed Indian agriculture into a raw material for their industries
• They forced the commercialization of agriculture in which they encouraged the production of cash crops instead of food crops
• Due to shortage of food crops country had to suffered from frequent famines

3. Low level of Productivity:
• Dependence on rain/lack of modern technology
• No means or incentives to invest in agriculture
• Low levels of technology,
• Lack of irrigation facilities
• Negligible use of fertilizers

INDUSTRIAL SECTOR (LIGHT)
India could not develop a sound industrial base under the British colonial rule. Even as the country’s world famous handicraft industries declined, no corresponding modern industrial base was allowed to come up to take pride of place so long enjoyed by the former. ”
India could not develop a sound industrial base under the British rule and was in poor state. Followings are the reason for the downfall

1. Limited contribution of industries to GDP
• Growth rate of the new modern industrial sector and its contribution to the country’s GDP was very small.
• Only one sixth (about 17%) of the GDP

Slow and limited industrial development
o Cotton textile mill by Indians in Maharashtra and Gujarat,
o Jute mills dominated by the foreigners in Bengal.
o Tata Iron and Steel Company (TISCO) were incorporated in 1907.

2. Inadequate role of Public Sector
• Very limited operation of public sector
• Only restricted to the railways, power generation, communication, ports etc

3. Got Shortage of Capital Goods Industry
• During the British rule, there was hardly any capital goods industry to promote further industrialization process.
• They always wanted Indians to be dependent on them, for the supply of capital goods and heavy equipment.

4. Huge Competition from machine-made goods
• Machine-made products from Britain were low cost products and gave a hard competition to the handicraft products in India.
• It forced the Indian craftsmen to shut-down their enterprises and leads to massive unemployment

5. Two fold De-Industrialization policy
• Reduce India to exporter of raw materials for rapid industrialization in Britain
• Convert India to importer for the cheap finished products

Impact
o Decline in Indian handicraft industries leads to massive unemployment
o Demand for cheap imported manufactured goods from Britain rises

FOREIGN TRADE (DIM)

How did the restrictive policies of commodity production, trade and tariff pursued by the British colonial government affect the structure, composition and volume of foreign trade?
India has been an important trading nation since ancient times. But the restrictive policies of commodity production, trade and tariff follow by the colonial government adversely affected the structure and volume of India’s foreign trade

1. Drain of Indian wealth:
• Export surplus from foreign trade did not result in any flow of gold or silver into India
• This Export surplus was used make to payments for expenses incurred on war fought by the British government

2. Importer of finished goods and Exporter of primary products
• India became an exporter of primary products such as raw silk, cotton, silk and woolen clothes and capital goods like light machinery, produced in the British Industries.
• As a result there was a shortage of essential commodities in domestic market. Large export surplus created.

3. Monopoly control of British:
• More than half of India’s foreign trade was restricted to Britain while the rest was allowed with few other countries like China, Ceylon (Sri lanka) and Persia (Iran).
• The opening of the Suez Canal in 1869 served as a direct route for the ships operating
between India and Britain.

DEMOGRAPHIC PROFILE

▪ Study of various aspects of population like birth rate, death rate, sex ratio etc.
▪ Demographic conditions during the British Rule exhibited all features of a stagnant and backward Indian economy.
▪ 1st official Census: The first official census was conducted in the year 1881. Though suffering from certain limitations, the census revealed unevenness in India’s population growth. From 1881 onwards, census operations were carried out after every ten years.
▪ 1921: Year of Great Divide: before 1921, India was in the first stage of demographic transition. The second stage of transition began after 1921. So, the year 1921 is described as the ‘year of the Great Divide’.

STATE OF DEMOGRAPHIC PROFILE (SLIP)

1. Slow population growth Life expectancy was as low as 44 years which shows the lack of health care facilities water and air-borne diseases, as well as lack of means for health care. Infant mortality rate was as high as 218.
2. Lack of Public health facilities Health facilities were either unavailable to large portion of population or, when available, were highly insufficient
3. Illiteracy rate:-Literacy rate was as low as which reflects the social and economic backwardness of the country. The average literacy rate was 16 % and woman literacy rate was only 7%.
4. Poverty Wide poverty prevailed in India during the colonial period worsening profile of India’s population of the time

Infant (Child) Mortality (Death) Rate (IMR):- is the number of deaths per 1,000 live births of children under one year of age

OCCUPATIONAL STRUCTURE

Occupational structure includes distribution of labor force in the three main sectors of the economy- agriculture, industry and services Salient features of India's pre-independence occupational structure are:

1. Agriculture was the principal source of occupation
• Agriculture sector 70-75%
• Manufacturing sector 10%
• Service sector 15-20 %

2. Unbalanced growth/ Regional variation:
• Decrease in the share of workforce in the agriculture sector in Tamil Nadu, Andhra Pradesh, Kerala, Karnataka, Maharashtra and West Bengal.
• Increase in the share of workforce in the agriculture sector in Orissa, Rajasthan and Punjab.

INFRASTRUCTURE (CARE)

Infrastructure:- Capital invested in the country that helps in production distribution and consumption.
• Economic infrastructure such as transport, irrigation, banking and credit, power
• Social infrastructure includes water supply, sanitation , health , education etc

“Under the colonial regime, basic infrastructure such as railways, ports, water transport, posts and telegraph develop. However, the real motive behind infrastructure development was not to provide basic amenities to the people but to subserve various colonial interests.

1. Communication:
• Posts and telegraphs were the most popular means of communication.
• The introduction of the expensive system of electric telegraph in India served the purpose of maintaining law and order.

2. Air and Water Transport:
• Construction of the inland trade and sea lanes was not satisfactory and was costly.
• Indian 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

3. Roads
• The colonial administration could not construct large roads due to shortage of funds.
• The roads that were built to
o Mobilizing the army
o Shifting raw materials.
• There was shortage of roads to reach out to rural areas during the rainy season.
• As a result, people living in these areas suffered badly during natural calamities and famines.

4. Encourage Railways
• British introduced the railways in India in 1850 and it is considered as one of their most important contributions.
• Affected the structure of the Indian economy two important ways
o Helped them take long distance travel and thus break geographical and cultural barriers.
o It improved commercialization of Indian agriculture.

Positive impact of british rule in India (BASIC)
1. Barter system to monetary system:- Barter transactions was replaced by monetary exchange system which increase the size of trade.
2. Administration system:- Indian economy got the system of efficient administration from Britishers who bring all the independent states into common frame
3. Spread of railways:-British introduced the railways in India in 1850. The railways enabled people to undertake long distance travel and thereby break geographical and cultural barriers.
4. Increasing Commercialization of agriculture:- Promote commercialization of Indian agriculture and volume of the India’s export trade undoubtedly expanded.
5. Check on famines:- Expanding means of transportation help to check the famine hit areas as they rush to the drought hit areas

Question. On the eve of Independence, Indian economy was:
(a) Stagnant and backward
(b) Developed
(c) Self-reliant
(d) Capitalist
Answer. A

Question. In 1947, the growth rate of per capita income in India was approximately:
(a) 2%
(b) 1.5%
(c) 0.5%
(d) 2.5%
Answer. C

Question. Name the economist whose estimates on GDP and per capita income during the British rule were considered very significant.
(a) William Digby
(b) Dr. V.K.R.V. Rao
(c) Dadabhai Naroji
(d) Findlay Shirras
Answer. B

Question. Which industry suffered a major setback due to partition of India?
(a) Jute
(b) Silk
(c) Iron and steel
(d) Cotton
Answer. A

Question. Which industry suffered a major setback during the British rule?
(a) Cement
(b) Iron and steel
(c) Handicraft
(d) Paper
Answer. C

Question. The most important infrastructure developed during the British rule was:
(a) Airways
(b) Waterways
(c) Railways
(d) None of these
Answer. C

Question. Which year is described as the “Year of Great Divide”?
(a) 1881
(b) 1921
(c) 1907
(d) 1931
Answer. B

Question. The opening of Suez Canal served as a direct route for ships operating between:
(a) India and America
(b) India and Sri Lanka
(c) India and Pakistan
(d) India and Britain
Answer. D

Question. The opening of the Suez Canal in 1869:
(a) Adversely affected the monopoly control of India’s foreign trade
(b) Reduced the cost of transportation of goods between India and Britain
(c) Enhanced inter-state trade in India
(d) Reduced the export of goods from India to Britain
Answer. B

Question. The British introduced railways in India in the year_________ .
(a) 1849
(b) 1850
(c) 1851
(d) 1859
Answer. B

Question. The main reason for stagnation in agriculture during the British rule was:
(a) Lack of technology
(b) Commercialisation of agriculture
(c) Land tenure system
(d) De–industrialisation
Answer. C

Question. The literacy rate and the female literacy rate of India at the time of independence were:
(a) 16 per cent, 7 per cent
(b) 12 per cent, 7 per cent
(c) 32 per cent, 16 per cent
(d) 16 per cent, 12 per cent
Answer. A

Question. What was the principal source of occupation during the British rule?
(a) Agriculture
(b) Mining
(c) Manufacturing
(d) Trade and Commerce
Answer. A

Question. When was first official Census conducted in India?
(a) 1882
(b) 1881
(c) 1885
(d) 1886
Answer. B

Question. The motive of British government behind de-industrialisation was:
(i) To get raw material from India at cheap rate
(ii) To sell British manufactured goods in Indian market at high prices
(iii) To focus on development of agriculture
(iv) To get finished products from India at cheap rate
(a) Both (i) and (ii) above
(b) Both (ii) and (iv) above
(c) Only (iii) above
(d) Only (iv) above
Answer. A

Question. The decline of handicraft industries led to:
(i) Large scale unemployment
(ii) Encouraged the import of manufactured goods from Britain
(iii) Development of capital goods industries in India
(iv) Encouraged the export of manufactured goods to Britain
(a) (i), (ii) and (iii) above
(b) (i), (iii) and (iv) above
(c) Both (i) and (ii) above
(d) Both (i) and (iv) above
Answer. C

Question. Mortality rate is one of the indicators of __________of an economy.
(a) Occupational structure
(b) Unemployment
(c) Demographic profile
(d) Foreign trade
Answer. C

Question. High value of which of the following indicators reflected social backwardness during the British rule in India?
(a) Literacy Rate
(b) Female literacy
(c) Infant Mortality Rate
(d) Life Expectancy
Answer. C

Question. On the basis of the workforce engaged in various sectors in pre-independent India, the following are ranked from the highest to the lowest? (Choose correct alternative)
(a) Primary sector, Secondary sector, Tertiary sector
(b) Tertiary sector, Primary sector, Secondary sector
(c) Secondary sector, Tertiary sector, Primary sector
(d) Primary sector, Tertiary sector, Secondary sector
Answer. D

Question. Which of the following statements is not true about the Indian economy during the British rule?
(a) Slow growth of agricultural and industrial sector
(b) The area of operation of public sector was very limited
(c) Drain of India’s wealth despite export surplus.
(d) During the colonial period, the service sector accounted for the largest share of workforce.
Answer. D

Question. Which of the following social indicators contributed to the worsening of India’s demographic profile during the colonial period?
(a) Low Infant Mortality rate
(b) High Life expectancy
(c) Low Literacy rate
(d) Low Birth rate and Death rate
Answer. C

Question. Which of fothe llowing statements is not true about the foreign trade in context of Indian economy during the British rule?
(a) India became exporter of primary products and an importer of finished consumer goods and capital goods from Britain.
(b) India traded with many countries of the world despite discriminatory tariff policy pursued by the British government.
(c) India generated huge export surplus.
(d) Britain had a monopoly control over India’s foreign trade.
Answer. B

Question. Which of the following statements is not true with regard to the development of railways by the British?
(a) It helped in breaking geographical and cultural barriers among people.
(b) It promoted commercialisation of Indian agriculture.
(c) The social benefits accruing due to development of railways outweighed the country’s huge economic loss.
(d) It increased the volume of India’s exports.
Answer. C

Question. The export surplus generated during the British rule was used:
(a) To meet administrative expenses of the British government
(b) To meet expenses on war fought by the British government
(c) To import invisible items
(d) All of the above
Answer. D

Question. Match the following
(i) TISCO                                       (a) 1869
(ii) Year of demographic divide      (b) 1881
(iii) Opening of Suez Canal           (c) 1907
(iv) First official census                 (d) 1921
Answer. (i) (c) (ii) (d) (ii) (a) (iv) (b)

Question.
(i) Agricultural sector                 (a) Drain of India’s wealth
(ii) Industrial sector                    (b) Lack of social infrastructure
(iii) Foreign trade                       (c) Low public investment
(iv) Low literacy rate and life     (d) Surplus labour
      expectancy
Answer. (i) (d) (ii) (c) (ii) (a) (iv) (b)

Question.
(i) Literacy rate                                (a) Less than 2 per cent
(ii) Female literacy rate                   (b) Nearly 7 per cent
(iii) GDP growth rate                       (c) Approximately 0.5 per cent
(iv) Per capita GDP growth rate      (d) Less than 16 per cent
Answer. (i) (d) (ii) (b) (ii) (a) (iv) (c)

Question.
(i) Subsistence farming                (a) Zamindari system
(ii) Commercial farming               (b) Workforce engaged in different economic activities
(iii) Occupational structure           (c) For self–consumption
(iv) Land tenure system               (d) Cash crops
Answer. (i) (c) (ii) (d) (ii) (b) (iv) (a)

Question. Fill in the blanks

1. __________ was the main source of livelihood for most people in pre-independent India.
2. The economic policies pursued by the colonial government in India transformed the country into supplier of __________ and consumer of __________ products from industries in Britain.
3. One of the notable economist who made significant contribution to the estimation of India’s national and per capita income during British rule was __________ .
4. __________ is defined as the total national income of a country divided by its population during a given period.
5. The growth of aggregate real output was less than __________ per cent and the growth of per capita output was just __________ per cent during the first half of the 20th century in India.
6. The most prominent cause of the stagnation of agricultural sector was the __________ system which was introduced by the British rulers in India.
7. The triangular relationship among the government, the owner and tiller of the soil is known as __________ system.
8. __________ of agriculture implies production of agricultural crops for sale in the market rather than for self-consumption.
9. Partition of the country created serious problem of shortage of raw materials for __________ mills of Bengal.
10. Commercialisation of agriculture resulted in shifting the agricultural production from __________ crops to __________ crops.
11. __________ industry produces machine tools which are further used for producing consumer goods.
12. Opening of __________ Canal fostered India’s trade with Britain by reducing the cost of transportation.
13. __________ year is regarded as the year of great divide in the India’s demographic history.
14. After the year 1921, India entered the __________ stage of demographic transition.
15. The average literacy rate in India during the British rule was nearly __________ per cent.
16. __________ sector accounted for the largest share of workforce in India during the British rule.
Answer. 
1. Agriculture                         2. raw materials, finished
3. Dr. V.K.R.V. Rao               4. Per capita income
5. 2 per cent, half per cent    6. land settlement system or Zamindari system
7. zamindari system              8. Commercialisation
9. jute mills                          10. food, cash
11. Capital goods                12. Suez
13. 1921                              14. Second
15. 16                                  16. Agricultural

VERY SHORT ANSWER QUESTIONS

Question. Give the names of some notable economists who estimated India’s per capita income during the British period. 
Answer. Notable estimators of India’s national and per capita income during British rule were: W. Digby; Findlay Shirras; Dadabhai Naoroji; K.T. Shah; Dr. V.K.R.V. Rao; R.C. Desai.

Question. State the growth of aggregate real output (or GDP) and per capita output during the first half of the 20th century in India.
Answer. The growth of aggregate real output was less than 2 per cent and the growth of per capita output was just half per cent during the first half of the 20th century in India.

Question. What was the most prominent cause of stagnation of the agricultural sector under the British rule?
Answer. The most prominent cause of the stagnation of agricultural sector was the new land revenue system that was introduced by the British rulers in India.

Question. What is meant by commercialisation of agriculture?
Answer. Commercialisation of agriculture implies production of agricultural crops for the market rather than for self-consumption or production of cash crops in place of food crops.

Question. How did the partition of the country adversely effect India’s agriculture?
Answer. The partition of the country created serious problems of shortage of raw material for jute mills and textile mills and resulted in food crisis in the country.

Question. What was the motive behind the systematic de-industrialisation by the colonial government in India? 
Answer. The motive behind de-industrialisation was two-fold: (a) to get raw materials from India at cheap rate; (b) to sell British manufactured goods in Indian market at higher prices.

Question. What was the adverse impact of the decline of handicraft industries in India?
Answer. The decline of handicraft industries created large scale unemployment and encouraged the import of manufactured goods from Britain.

Question. Which industries were adversely affected due to partition and why?
Answer. The partition of the country created the serious problem of shortage of raw materials for jute mills of Kolkata and textile mills of Mumbai and Ahmedabad.

Question. When was the Tata Iron and Steel Company (TISCO) incorporated?
Answer. TISCO was incorporated in August 1907.

Question. Give the names of some of the main modern industries which were in operation at the time of independence. 
Answer. The main modern industries which were in operation at the eve of independence were: cotton textile, jute mills, iron and steel industry.

Question. What was the impact of discriminatory tariff policy on the Indian economy?
Answer. As a result of discriminatory tariff policy, India was reduced to an exporter of primary products and importer of British manufactured goods.

Question. What does the term ‘export surplus’ imply?
Answer. Export surplus implies that the country’s total exports were greater than its imports.

Question. What do you understand by the drain of India’s wealth (or economic drain) during the colonial period?
Answer. Economic drain implied all those payments which were made to England for which India received nothing in return.

Question. When was India’s first official census conducted?
Answer. India’s first official census operation was undertaken in 1881.

Question. In context of Indian economy, which year is regarded as the defining year for the demographic transition from its first to the second stage? 
Or
Why is 1921 considered as the year of great divide?
Answer. 1921 is regarded as the great divide year in India’s demographic history because after 1921 India entered the second stage of demographic transition.

Question. What were the main reasons for the slow growth of population during the British rule?
Answer. The main reasons for the slow growth of population during the British rule were poverty, malnutrition, famines, epidemics and poor health facilities.

Question. What was the average literacy rate in India during the British rule?
Answer. The average literacy rate in India during British rule was less than 16 per cent.

Question. How was the infant mortality rate of India during the British rule quite alarming?
Answer. Infant mortality rate was 218 per thousand.

Question. What was the life expectancy in India during the British rule?
Answer. Life expectancy during the British rule was nearly 32 years.

Question. Which sector of the Indian economy accounted for the largest share of workforce during the colonial period?
Answer. Agricultural sector of the Indian economy accounted for the largest share of workforce during the colonial period.

Question. What was the main purpose behind construction of roads by the British?
Answer. (i) Mobilising the army within India
(ii) To transport raw materials from the countryside to the railway station or the port to send it to England

Question. When did the British introduce Railways in India?
Answer. The British introduce Railways in the year 1850.

INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

Very Short Answer Questions 

1. What was the sole purpose of the British colonial rule in India?

2. State the meaning of National Income and Per Capita Income.

3. What does commercialisation of agriculture mean?

4. Give the life expectancy at birth.

5. What does infant mortality rate mean?

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

7. Explain the impact of British rule on economic development of India.

Short Answer Questions 

1. What were the major causes of India’s agricultural stagnation during the British period?

2. How did the British achieve a systematic de-industrialisation of India? What were the basic motives behind it?

3. How did the British direct the foreign trade of India in their favour?

4. Giving statistical data explain the demographic profile of India during the British period.

5. What were the important features of the occupational structure of India before independence?

Long Answer Questions 

1. Give a critical appraisal of the contribution of the British on the infrastructure sector of India before independence.

NCERT text book questions 

1. Name some modern industries which were in operation in our countryat the time of independence.

2. What objectives did the British intend to achieve through theirpolicies of infrastructure development in India?

3. Critically appraise some of the shortfalls of the industrial policypursued by the British colonial administration.

4. What do you understand by the drain of Indian wealth during thecolonial period?

5. Which is regarded as the defining year to mark the demographictransition from its first to the second decisive stage?

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