INDIAN ECONOMY ON THE EVE OF
INDEPENDENCE (1947)
• 1. LOW LEVEL OF ECONOMIC DEVELOPMENT
• India was a backward economy under British rule
• Per capita income was very low (= $230-z250 per year)
• Stagnant growth → No real increase in national income
• Poverty, unemployment, and poor standard of living were widespread
• 2. AGRICULTURAL SECTOR (BACKBONE
BUT WEAK)
• About 70-75% population dependent on agriculture
• Low productivity due to:
• Outdated technology
• Lack of irrigation
• Poor seeds and fertilizers
• Land tenure systems:
• Zamindari System → Exploitation of farmers
• Commercialisation of agriculture:
• Focus on cash crops (indigo, cotton) instead of food grains
• Result → Food shortages & famines
• 3. INDUSTRIAL SECTOR (UNDERDEVELOPED)
• India had very few modern industries
• British policy destroyed handicrafts & cottage industries
• Limited industries:
• Cotton textile (Bombay)
• Jute (Bengal)
• Iron & Steel (TISCO)
• Lack of:
• Capital goods industries
• Infrastructure
• Result → India became supplier of raw materials + importer of finished goods
• 4. FOREIGN TRADE (COLONIAL EXPLOITATION)
• India had export surplus, but no benefit
• Exported:
• Raw materials (cotton, jute)
• Imported:
• Finished goods (from Britain)
• Drain of wealth:
• Wealth transferred to Britain without return
• Trade was controlled by British → not in India's interest
• 5. DEMOGRAPHIC CONDITION (POOR
QUALITY OF LIFE)
• High birth rate & high death rate
• Very low life expectancy (~32 years)
• High infant mortality rate
• Low literacy rate (~16%)
• Lack of:
• Healthcare
• Sanitation
• Result → Poor human development
• 6. OCCUPATIONAL STRUCTURE (IMBALANCED)
• Primary sector (Agriculture) → ~70-75%
• Secondary (Industry) → Very low
• Tertiary (Services) → Limited
• Result → Overdependence on agriculture
• 7. INFRASTRUCTURE (POOR BUT SOME DEVELOPMENT)
• British developed infrastructure for their benefit:
• Railways → For raw material transport
• Roads, ports → For trade
• But:
• No rural development
• Limited electricity
• Poor communication in villages
• 8. POSITIVE CONTRIBUTIONS (LIMITED)
• Introduction of:
• Railways
• Postal system
• Commercial crops
• But overall impact = exploitative, not developmental