NCERT Solutions Class 12th Economics (India Economic Development) Chapter – 1 Indian Economy on the Eve of Independence Notes

NCERT Solutions Class 12th Economics (India Economic Development) Chapter – 1 Indian Economy on the Eve of Independence

NCERT Solutions Class 12th Economics (India Economic Development) Chapter – 1 Indian Economy on the Eve of Independence

?Chapter – 1?

✍ Indian Economy on the Eve of Independence✍

? Notes ?

“Indian Economy at the time of Independence”

Before the British colonial period, the economy of India was known as ‘Sone ki Chidiya’. It went backward due to excessive and continuous economic exploitation during the colonial period.

The main objective of the British colonial rule was to use India as a base for the rapidly developing modern economy in Britain.

High Infant Mortality Rate – The infant mortality rate at the time of independence was as high as 218 per thousand.

Widespread illiteracy – The average literacy rate was less than 16.5 percent. Only 7 : Women were literate.

Low life expectancy – Life expectancy was only 32 years, which is an indication of grossly inadequate health facilities.

Widespread poverty and low standard of living – people had to spend 80-90% of their income on basic needs. 52 percent of the total population was below the poverty line. Some parts of the country were facing similar conditions of famine.

Predominance of Agriculture Sector – The agricultural sector was the most important in the business structure of the economy. About 70-75 percent of the working population of India was engaged in agriculture, 10 percent in the industrial sector and 15-20 percent in the service sector.

Growing Regional Inequality – There was increasing regional diversity in occupational structure. In states such as Tamil Nadu, Andhra Pradesh, Kerala and Karnataka (which were then part of the Madras Presidency) the workforce’s dependence on agriculture was decreasing, while in Orissa, Punjab, Rajasthan, the workforce dependent on agriculture was increasing.

Status of Indian Economy at the time of Independence 

(a) low rate of economic growth

The colonial government never made any effort to estimate the national and per capita income of India.

The first attempt to measure national income and per capita income was made at the individual level in 1876 by the Grand Old Man of India, Dadabhai Naoroji.

Doctor . V . Of . R . V . According to Rao, the annual growth rate in gross domestic product is only 2% and the annual increase in per capita income is only 0. was 5%. In 1947, the per capita income was only Rs 280.

Prominent among other followers of the then national income were William Digby, Findlay Siraj, R. D . C . Country etc.

(b) The backwardness of agriculture – which was due to the following reasons 

• Zamindari, Mahalwari and Ryotwari system
• The share of the agricultural sector in the national income in 1947 was about 95%.
• Pressure of commercialization – Production of indigo etc.
• In 1947, more than 75% of the population was dependent on the agriculture sector.
• The partition of the country led to the loss of jute mills in West Bengal and productive land in East Pakistan and in manufactured exports. and increase in imports

(c) undeveloped industrial area

De-industrialization policy and decline of Indian handicraft industry.

The de-industrialization policy had twin objectives.

(i) To make India an exporter of raw materials
(ii) To make India an importer or marketer of manufactured products of British industries.

Lack of capital goods industry.

Limited activity of public sector.

discriminatory tariff policy.

Decline and major consequences of handicraft industries

• 1. severe unemployment in india
• 2 . Creation of new demand in the Indian consumer market
• 3. Severe shortfall in the supply of locally made goods
• 4. In addition, although modern industries such as TISCO were founded by Jamshedji Tata in 1907, such efforts were few and insufficient.

(d) Features of Foreign Trade

• Net exporter of raw materials and importer of finished goods
• Britain’s monopolistic control over foreign trade.
• India’s wealth outflow

(f) The pressure on India of the expenditure of wars being fought by Britain – The first regular census of India started in 1881. The demographic condition of India from 1981 to 1991 is placed in the first phase of the Demographic Transition Theory. 1921 is called the year of the Great Divide of the Population. After which the phase of demographic sampling begins.

(g) Unfavorable demographic conditions at that time – pressure on India on the wars being fought by Britain. The first regular census of India was started in 1881. From 1981 to 1919, the demographic condition of India is placed in the first phase of the demographic transition theory. 1921 is called the year of the Great Divide of the Population. After which its demographic phase has started.

• High death rate – 45 per thousand
• High Infant Birth Rate – 218 per thousand
• Collective illiteracy – 84 illiteracy
• Low life expectancy – 32 years
• Low standard of living – 80 – 90% of income spent on basic needs
• lack of public health services

(h) Underdeveloped infrastructure – lack of good roads, power generation, health, education and communication facilities. Although efforts were made by the British administrators for the development of infrastructure such as roads, railways, ports, water transport and postal and telegraph departments. But their purpose was not to provide facilities to the common people but in the interest of the imperialist administration.

i) Over-dependence on the primary (agriculture) sector

• The maximum share of the workforce, about 72%, was engaged in agriculture and allied sectors.
• 10% was engaged in the manufacturing sector.
• 18% of the workforce was in the service sector.

Some positive effects of British imperialism on Indian economy

• Increase in transport facilities – especially in railways
• development of ports
• Posts and Telegraph Department Facilities
• economic and political integration of the country
• Development of banking and monetary system

Negative impact of British imperialism on Indian economy

• Decline of Indian Handicraft Industry
• Exporter of raw materials and importer of finished goods
• Britain’s monopolistic control over foreign trade
• pressure on commercialization

Backward Agriculture – The immediate problem for India was how to develop the agricultural sector and its productivity. At the time of independence, some of the immediate needs were as follows:-

• 1. Abolition of Zamindari system,
• 2. Making land reform policies,
• 3. Reducing inequalities of land ownership and
• 4. Uplifting the farmers.

Some Positive Contributions by the British in India

It would be unfair to say that the British had made some positive contribution to India, but some positive influences became available as a by-product of their selfish policies. These contributions were not willful and ethical but were a by-product of the exploitative colonial policies of the British.

Therefore, some such positive contributions by the British to India are as follows:

(a) Introduction of Railways – The introduction of railways in India by the British government was a major achievement for the Indian economy. It removed all kinds of geographical and cultural barriers and made possible the commercialization of agriculture.

(b) Beginning of commercialization of agriculture – Another major achievement for the Indian economy was the commercialization of agriculture by the British government. Before the British rule in India, Indian agriculture was autotrophic in nature. But after the commercialization of agriculture, agricultural production was done according to the needs of the market. This is the reason that today India has been able to achieve the goal of being self-sufficient in food grains.

(c) Development of infrastructure – The infrastructure developed by the British made a positive contribution in providing relief material and information early in the outbreak of famine in the country. A window was created to know the world outside India. It connected India with other parts of the world. The British also banned the practice of Sati in India and also announced the Widow Remarriage Act.

(e) Unification of India – Before the British rule, India was divided into small states and borders. In the name of war of independence, British became a reason to integrate India and Indians.

(f) Example of an efficient and powerful administration – The British left behind an example of an efficient and powerful administration which Indian leaders could follow.