Indian Economy on the

eve of Independence
 I The Need to study this topic

The structure of India’s present day economy is not

just of current making, it has its roots steeped in history
 II Sole purpose of Economic policies of the
British Government
 Protection and promotion of economic interests in their home country
than with the development of Indian economy.

 Brought about fundamental change in the structure of Indian

economy -
Transforming Indian into supplier of raw materials and consumer of finished
industrial products from Britain
III Individual estimators of national &
per capita income
Dadabhai Naoroji
William Digby
Frindlay Shirras
RC Desai
V. K. R. V. Rao
 IV Agricultural Sector

 85% of India’s population lived in villages

 Agricultural Sector was stagnant and experienced
unusual deterioration
V Reasons for state of Agricultural Sector

1. Land and Revenue Settlement

2. Commercialization of Agriculture
‘

3. Infrastructural problems – including low levels of technology, lack

of irrigation facilities, negligible use of fertilizers

4. Lack of public investment in terracing, flood control, desalinization

of soil.
 VI Industrial Sector
DE INDUSTRIALIZATION of Indian industrial sector

Motive:
1. Reduce India to status of mere exporter of raw materials
2. Turn Indian into sprawling market for finished products of British
Industries
 VII Critical appraisal of industrial policy of
British
a) Progress of modern industry was very slow and limited
Example : Jute mills, Cotton textile mills, Steel Industry- TISCO and paper, sugar
and cement industries

b) Absence of Capital goods industry

c) Limited area of operation of public sector

- in the areas of Railways , Power generators, Communication and Ports
 VIII Foreign Trade

Composition
a. Exporter of primary goods
b. Importer of consumer goods

Direction
c. Monopoly control of Britain

Volume
d. Huge export surplus was generated but it was not used for the benefit of India
 VIII Demographic Condition
 Demography

 1st census in India - 1881

 Census subsequently every 10 years

 1921 – defining year, to mark demographic transition from 1st to 2nd stage demographic
transition ( year of great divide )
 IX Quantitative Appraisal of India’s Demographic
profile

1. Literacy level – less than 16%

2. Mortality Rate was high – Infant mortality rate 218 per thousand
‘

3. Life expectancy – 44 years

 X Occupational Structure
 Distribution of working population across different industries and sectors

 Showed little sign of change

a) Agriculture Sector accounted for the largest share (70-75%) of workforce, Manufacturing
sector accounted for – 10% and Service sector accounted for – 15-20%

b) Growing regional variation

 XI Infrastructure
 Basic infrastructure developed- Railways, Ports, Post & telegraph, Water transport

 Motive behind it – subserve colonial interests and not to provide basic amenities

 Roads – (1) for mobilizing army (2) for draining out Raw materials
- there was a shortage of all weather roads
 Railways ( introduced in 1850) – affected structure of Indian economy in 2 ways
 Measures for developing inland waterways and sea lanes not satisfactory
 Telegraph system was expensive
 Postal services inadequate