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12th Eco VK Ohri (Macro) PDF
12th Eco VK Ohri (Macro) PDF
2
· STATE OF AGRICULTURAL SECTOR
On th
e eve of independence, f ndian economy was pnm
· arily an. agrarian
. d
econ 0 . d · ed its hvehhoo
f: my. Around 72 per cent of the populat10n env .
th
rom e agriculture sector which reflects the importance of this sector m
on the Eve of Independence 5
[ndwn Econo my
.
the In d ian econ omy . .
However, this sector suffered from deep sta
gnatio11
·c
an d ch rom backwardness. Follo. wing were the principal features of
. · .1ture on the eve of mdep enden ce: the
Indian agnct u
(1) Low Production and Productivity: Produ ction refers to
total
ou tpu,t Wl1 ile produ ctivit y refers to outpu t per hectar e oflan d B
. . • oth
(production as well as product1v~ly) were found to be extremely low
on lhe eve of indep enden ce. This was a result of the lack of m~~
with the farmers, and lack of incentive to the tillers of the soil.
Table 1 shows produ ction and produ ctivit y levels in 1947 for wheat
and rice, comp ared with their levels in 2019-20.
Table I • Production and Productivity of Wheat and Rice-
A Comparison between the Levels in 1947 and 2019-20
Productivity
Crop
1947
(kg per hectare)
2019-20 1947
Production
(in lakh tonnes) l
~
2019-20
1. Wheat 660 3,421 64 1,076 (
2. Rice 665 2,705 220 1,184
[Source: (i) D. Bhattacharya: Economic History of India, Economic Survey 2020-21]
Table 1 shows that produ ctivit y of whea t was nearly 5.1 times lower
in 1947 comp ared with its level in 2019- 20. Produ ctivit y of rice was
nearly 4 times lower in 1947 comp ared with its level in 2019-20.
Produ ctivit y conti nued to be low despite the fact that area under
cultivation tende d to expan d (owing to press ure of population).
Likewise, level of outpu t of whea t was nearly 16.8 times lower, and
Zamindari System of
Land Revenue that of rice was nearly 5.3 times lower in 1947 comp ared with their
A system of land revenue levels in 2019-20.
that worked throug h
middle men called (2) Exploitative Land Settlement System: The British government
zamindars; an interme diary
between the colonial in India introd uced a uniqu e system of land settlement. It set-up
govern ment and the a triang ular relati onshi p amon g the gover nmen t, the owner of the
peasants.
soil and the tiller of the soil. This was popul arly know n as :,1,n,r1c'c 1' • (
system of Land Settle ment and was partic ularly imple mente d in the
then Bengal Presi dency (comp rising parts of India's present-day
easter n states). The distin ct features of this system were as these:
Owner s of the Soil vs.
Tillers of the Soil (i) The zamindars were recog nised as perm anent owne rsofth esoil,
Owners of the soil were which impli ed that the profits gener ated from the cultivation
the zamindars and tillers of
the soil were peasants and
were to accru e to zamindars instea d of the cultivators.
labourers who worked on (ii) The zamindars were to pay a fixed sum to the government as
the farms of zamindars.
land revenue.
'lhcl1.11 crso ,· the 'soil were merely given enough for subsistence·
. resources to invest Wh·1le
'I hus, t I,c l.I 11 c,rs of lhc so il did ,not have
the ownc rs, had no inlcrest. Stagnat10n and backwardness'· uf
. . Jture was
agncu • lhe obvious consequence.
□ There were no intermediaries (like zamindars) between th e state and the farmers, the farmr:;rs
would pay land revenue directly to the king.
□ Prosperity and stability were the key charactenst,cs of life in rura l India Thus, the French traveller,
Bernier, described Bengal in 17th century as "richer than Egypt" producing amply for self-
consumption and exporting in abundance.
3. INDUSTRIAL SECTOR
Systematic de-industrialisation is the term that describes the status of Prior to the British Rule
industrial sector during the British rule. The textile industry o• ·,..,d a
was famous worldw,ae.
The motive behind the systematic de-industrialisation during the British 'Deccai Mus ·11· foJ:1d ,,
Rule in India was two-fold: Bengal, in places near
Dhaka (present capirn! of
♦ To exploit India's wealth of raw material and primary products Bangladesh) was famous
all over the world as tr e
(like cotton and jute). It was required to fulfil the emerging finest cotton textile. Mafrra'
was the finest vane~ oi:
needs of industrial inputs in the wake of industrial revolution muslin and v,as p~ma•i ~
in Britain. worn by ro}alty giving 't
the name of malma 1 s1ai,
♦ To exploit India as a potential market for the industrial products or ma/ma/ khas.
of Britain.
This systemic de-industrialisation led to:
♦ Decline of the handicraft industries and the consequent massive
unemployment.
♦ The penetration of British goods in the Indian markets.
The poor state of the industrial sector during the British rule is highlighted
by th e following points:
(I) Decay of Handicrafts: Before suffering the decay during th e
British Raj, handicraft in India enjoyed a worldwide reputation
for excellence and quality. The main reason for the decay of the
handicraft was the discriminatory tariff policy of th e 5tate.
Thus, the Indian craftsmen started losing their domestic markets (iv
and eventually, perished.
2
< ) !'e.ak (Notional) Growth of Modern Industry: Under the 'British
aJ' modern industry saw only a bleak growth. It was only in
nd
~eco half of the 19th century that the modern industry showed 4.
its emergence.
Five observations 11 d b . Ind
· ee to e noted 111 this regard: tim
(i) Initially, cotton d • . . xttle
an Jute textile mills were set-up. Cotton te The
mills were located · . . . h and
In Western India mainly 111 Maharas tra Bri
Gujarat au d were mainly controlle~ by the Indians. Jute textile
Indian Economic Development
industries were concentrated in Bengal and were primarily
controlled by the foreigners.
(ii) In the beginning of twentieth century, iron and steel industry
came up and Tata Iron and Steel Company (TISCO) was
incorporated in 1907. After World War II, cement, paper and
sugar industries also started coming up.
(iii) There was hardly any capital goods industries in India. Capital
goods industry produces goods like machines and industrial
plants which are used for further industrialisation.
(iv) Contribution of the new industrial sector in the Gross Value
Added (GVA) or Gross Domestic Product of the economy
remained extremely low.
(v) The state participation in the process of modern
industrialisation was limited. It was confined only to the
strategic areas (like railways and means of communication)
which helped expansion of the Indian market for the British
products.
Briefly, industrial sector on the eve of independence revealed four core
characteristics, pointing to its backwardness and limited growth: -
(i) Handicraft industry was systematically destroyed by the British
government. It was largely owing to the discriminatory tariff policy
of the British government.
(ii) Modern industry showed a bleak expansion. It was by and large
restricted to the expansion of railways. It helped expansion of the
Indian market for the British products.
(iii) Capital goods industry (which is the core element of industrial
growth) was almost non-existent.
(iv) While the traditional Indian industry (handicrafts) were decaying,
modern industry remained in an infant stage. This again pointed to
the backwardness of the Indian economy with little or no evidence
of dynamic change.
4. FOREIGN TRADE
India had acquired eminence in the area of foreign trade, sjnce ancient
times.
The Romans used to call India, "the sink of world's bullion". But the
British rule in India brought an end to it.
□ th
e. po/icy of e British government resulted in a monopoly control of
Codlonisl
tra
India s fare,g ·
□ Exd~o~ts
8nd
Imports were lsrge/y restricted to be between India and Britain.
□ In ,as exports provided raw t 1 .. . d huge
market for the British lndust,;s ena to the Bnttsh industry, while India's imports provide 8
These are typical characteristics of s bai '-.. d
w0Jf. vver economy.
(3) Surplus Trade but only to Benefit the Rriti&h: Surprisingly, during
the British regime, our cxporls exceeded (1Ur imports. It implied a
surplus of balance of trade. Hut:
♦ This surplus wa~ owing largely Lo the export of primary goods jt@@W~~-
(nottheindustrial good~)which isasign ofecnnomicbackwardness. ■ Hugeadministrat1'-1e
e, penses 1Nere
♦ Despite the surplus trade, supplies of several essential incurr"3d by the Bntish
commodities like food grains, and clothes remained defici ent grf1ernrnt;:nt to manage
i hrjir col0ni&I rule In
in the domestic market. India
♦ The trade surplus was not used for growth and development of ■ Alz,, hug8 r:vp1::n::,es
•11er'-J rnr✓ urred b / the
the country. Instead, it was used to meet: 8nti:,h grJ 1e:rnrr 8nt t0
frght wars in p Jr::,u1t
(i) administrative expenses of the British government in of th1:::ir 1:.olre,; of
India, and rrnperial srn
■ All these e1 pw1s% v1ere
(ii) expenses of wars fought by the British government. borne b / trie lndran
Administrative and war expenses led to a huge drain of wealth E; i:,rieq Jer
• This ·rnplisd a d-a1n o~
from India. It compounded the backwardness of the Indian India's wealth
economy.
J Surplus generated as balance of trade was only spent to meet administrative and iJ1ar experises
by the British government in India.
0 These expenses led to a huge drain of wealth as it was not used for investment.
□ Consequently, poverty and backwardness were elevated.
5. DEMOGRAPHIC PROFILE
Demographic conditions during the British rule exhibited all features
of a stagnant and backward economy. Here, we focus on the following
parameters:
( 1) Birth Rate and Death Rate: Both birth rate (BR) and death rate (DR) Population Census
were very high-nearly 48 and 40 per thousand respectively. High ■ Population census
In India is a detailed
BR and High DR suggest a state of massive poverty in the country. estimation of population
size, along with a
(2) Infant Mortality Rate: Infant mortality rate (death rate of children
complete demographic
below the age of one year per 1000 live births) was very high. It profile of the country
was about 218 per thousand, while at present, it is 30 per thousand. ■ It was first conducted
under the British rule
High infant mortality rate is a sign of poor healthcare connected in 1881. Since then it Is
with extreme poverty. conducted after every
ten years.
(3) Life Expectancy: Life expectancy (average life of a person) was as
low as 44 years, while presently it is 69.4 years. Low life expectancy
reflects lack of healthcare facilities, lack of awareness as well as lack
of means to avail them.
DEMOGRAPHIC TRANSITION
•
table points .
re 1ating to demographic transition in Ind ia: ..
Following are some no . . . is regarded as the 'Year of Great D1v1de'.
. O f demographic trans1t1on, 1921
(i) In the history I . rowth .in In d.,a was never consistent. Size of popJlation kept
(ii) Till 1921, popu at,o~ 9_in one c~~sus an d decreasing in the other. It is descr.bed as th::
fluctuating, increasing
first stage of demographic trans1t1on. . .
(iii) The census 1901 showed a d ec I.ine o f o.04 crore in total population (from 23.87 crore in
1891 to 23.83 crore in 1901). .
.
· of 1.38 crore (from 23.83 crore in 1901. to 25.21 c rore m 1911).
(iv) The census 1911 showe d a rise
(v) The census 1921 showe d a decline of o•07 crore (from 25.21 crore in 1911 to 25.14 crore in
1921). .
(vi) After 1921, India entered the second stage of demographic transition w hen popu latton
recorded a consistent rise.
(vii) It is after this year that the total population in India never declined; it recorded a consistent
rise: the census 1931 recorded a rise of 2.76 crore; the census 1941 recorded a rise of 3.96
crore; the census 1951 recorded a rise of 4.24 crore, and so on.
(viii) A consistently rising population (on the eve of independence) led to excessive burden
of maintenance investment. It is an expenditure which a country has to incur on the
maintenance of the existing population.
I (ix) When maintenance investment is high, investment for GDP growth remains low.
I
(x) High maintenance and low investment for GDP growth is another parameter of the
I backwardness and stagnation of the Indian economy.
(xi) However, the underlying fact is that ti// 1951, the rise in India's population was never
alarming; it ranged between mild to modest. It was because both birth rate and death
rate were high and the gulf between two was small.
(xii) It was only from 1951 onwards that the rise in population became explosive in nature, a
nd
the countr_y started facmg a serious challenge in terms of population explosion. Because, '
whereas birth rate continued to be high, death rate recorded a significant decline. _J
- - - - -- -- - -- ------ - -
6. OCCUPATIONAL STRUCTURE
Occupational structure refers to distribution of working population
across primary, secondary and tertiary sectors of Lhe economy.
Table 2 shows occupational structure of Indian economy at the time of
independence. The data relates to 1951, because reliable statistics for the
year 1947 are not available.
Table 2. Occupational Distribution of India
at the T"uneofl n d epen d ence Pie-Chart
IL ...~.:;.
Occupation 1951 (in%)
- - -
-
1. Primary Sector 72.7
■
(i) Agriculture 50.0 Primary Sector 72.7%
100.00
Vv
7. INFRASTRUCTURE Br
Ce1
Infrast ructure refers to the elements of (i) econo1nic change (like meaJli to '
of transport, communication, banking, power/energy), and the elem~1~ foci
of (ii) social change (like growth of educational health and housiP~ the
faciI·t·
1 ) h· h , t of 1 are
ies , w Ic serve as a foundation for growth and developrnen
country.
(1:
Elements 0f. f aY bl
in rastructural change during the British rule rn
described as under:
(i) R,,ilw.1r were introduced in India in 1850 and were
developed to transport finished goods from Britain
to the interiors of the colonial India (with a view to
widening the size of the market). It aimed at widening
the size of the market for the British products in India.
However, introduction of railways is considered one
of the most important contributions of the British in
India. First Train run from Bombay (Mumbaij
to Thane (1853)
(ii) Ports were developed to 'handle export of raw
material to Britain and import of finished goods from Britain.
1he development of inland waterways proved uneconomical. For
example, coast canal on the Odisha (erstwhile Orissa) Coast was
built at a huge cost, but failed to compete with railways and was
ultimately abandoned.
(iii) Post and telegraphs were developed to enhance administrative
efficiency. Doubtless, it served the purpose of maintaining law and
order.
(iv) Roads were developed to facilitate transportation of raw material
from different parts of the country to the ports. There were no efforts
made to develop all-weather roads to reach out to rural areas during
the rainy season. As a result, people living in rural areas suffered at
the time of natural calamities.
Briefly, some modest infrastructural change in the economy during the
British Raj is not denied. But, the motive behind this change was not
the growth and development of the Indian economy; rather it was to
facilitate colonial exploitation of the Indian economy for the growth and
development of the British economy. Consequently, Indian economy
remained backward, even when it experienced some infrastructural
change.