Indian Economy on the Eve of Independence

NCERT Solutions • Class 11 Indian Economic Development • Chapter 1
Textbook Exercises
1. What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?
Focus: The primary focus of the economic policies pursued by the colonial government was not the development of the Indian economy but the protection and promotion of the economic interests of their home country (Britain). They aimed to transform India into:
  • A supplier of raw materials for Britain’s flourishing industries.
  • A consumer market for finished industrial products from Britain.

Impacts:
  • Low Economic Growth: It resulted in a fundamental change in the structure of the Indian economy, leading to stagnation and backwardness.
  • Poverty: It caused widespread poverty and a decline in the standard of living (per capita income).
  • De-industrialisation: Indigenous handicraft industries collapsed without a modern industrial base to replace them.
2. Name some notable economists who estimated India’s per capita income during the colonial period.
Some notable economists who attempted to estimate India’s national and per capita income were:
  • Dadabhai Naoroji
  • William Digby
  • Findlay Shirras
  • V.K.R.V. Rao (His estimates are considered the most significant)
  • R.C. Desai
3. What were the main causes of India’s agricultural stagnation during the colonial period?

The main causes were:
  • Land Settlement Systems: The Zamindari system (in Bengal) focused on collecting rent regardless of the economic condition of the cultivators, leaving no surplus for investment.
  • Commercialisation of Agriculture: Farmers were forced to grow cash crops (like indigo, cotton) instead of food crops, which benefited British industries but left Indian farmers vulnerable to famines.
  • Low Level of Technology: Lack of irrigation facilities and negligible use of fertilizers resulted in low productivity.
  • Partition: The partition of the country took away a large portion of the fertile and irrigated land (especially the jute-producing areas of East Bengal) to Pakistan.
4. Name some modern industries which were in operation in our country at the time of independence.
  • Textiles: Cotton textile mills (mainly in Maharashtra/Gujarat) and Jute mills (mainly in Bengal).
  • Iron and Steel: Tata Iron and Steel Company (TISCO), incorporated in 1907.
  • Others: Sugar, Cement, and Paper industries were also established after the Second World War.
5. What was the two-fold motive behind the systematic de-industrialisation effected by the British in pre-independent India?
The two-fold motive was:
  1. To reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain.
  2. To turn India into a sprawling market for the finished products of those industries, ensuring their continued expansion.
6. The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.
Yes, I agree. The world-famous Indian handicrafts declined drastically due to:
  • Discriminatory Tariff Policy: The British allowed tariff-free export of raw materials from India and tariff-free import of British goods, but imposed heavy duties on the export of Indian handicrafts.
  • Competition from Machine-made Goods: British goods were machine-made and cheaper compared to handmade Indian goods.
  • New Class of Demand: The emergence of a westernized class in India preferred imported British goods over traditional Indian products.
  • Disappearance of Princely Courts: The nawabs and rajas, who were the main patrons of handicrafts, lost their power.
7. What objectives did the British intend to achieve through their policies of infrastructure development in India?
The motive was not to provide basic amenities to the people but to serve colonial interests:
  • Railways: To move the British army across India and to transport raw materials from the interior to ports for export.
  • Roads: To mobilize the army and draw out raw materials from the countryside to railway stations.
  • Communication (Post & Telegraph): To maintain law and order and administrative efficiency.
8. Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.
  • Neglect of Capital Goods Industry: There was hardly any capital goods industry (which produces machines and tools) to support further industrialization.
  • Low Contribution to GDP: The growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP) remained very small.
  • Limited Role of Public Sector: The public sector was confined only to railways, power generation, communications, and ports, ignoring other key sectors.
9. What do you understand by the drain of Indian wealth during the colonial period?
The “Drain of Wealth” refers to the transfer of India’s economic resources to Britain without any corresponding return.
India generated a large export surplus, but this surplus was not used for India’s development. Instead, it was used to:
  • Make payments for expenses incurred by an office set up by the colonial government in Britain (Home Charges).
  • Meet expenses on wars fought by the British government.
  • Pay for the import of invisible items (services).
10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?
The year 1921 is regarded as the “Year of the Great Divide”. Before 1921, population growth was stagnant; after 1921, the population began to grow consistently.
11. Give a quantitative appraisal of India’s demographic profile during the colonial period.
The demographic indicators showed a backward social profile:
  • Literacy Rate: Less than 16% (Female literacy was only about 7%).
  • Infant Mortality Rate: Very high at 218 per thousand (compared to approx. 33 today).
  • Life Expectancy: Very low at 32-44 years (compared to approx. 69 today).
  • Birth and Death Rates: Both were very high, indicating the first stage of demographic transition.
12. Highlight the salient features of India’s pre-independence occupational structure.
  • Predominance of Agriculture: The agricultural sector accounted for the largest share of the workforce, approximately 70-75%.
  • Weak Industrial Base: The manufacturing sector employed only about 10% of the workforce.
  • Service Sector: The service sector accounted for about 15-20%.
  • Regional Variation: While the Madras Presidency, Bombay, and Bengal saw a shift towards industry, states like Orissa, Rajasthan, and Punjab saw an increase in the agricultural workforce.
13. Underscore some of India’s most crucial economic challenges at the time of independence.
  • Low Agricultural Productivity: Feeding a growing population with stagnant agriculture was a primary challenge.
  • Industrial Backwardness: The need to build a strong industrial base and capital goods industry.
  • Poverty and Unemployment: A vast majority lived in abject poverty with no employment opportunities.
  • Lack of Infrastructure: Roads, power, and communication networks were insufficient for development.
14. When was India’s first official census operation undertaken?
India’s first official census operation was undertaken in the year 1881. Since then, it has been conducted every 10 years.
15. Indicate the volume and direction of trade at the time of independence.
  • Volume: India had a large export surplus, but it came at the cost of the domestic economy’s needs (scarcity of grains and clothes).
  • Composition: Exports were mainly raw materials (cotton, jute, indigo) and imports were finished consumer goods (machines, clothes).
  • Direction: More than half of India’s foreign trade was restricted to Britain. The rest was allowed with a few countries like China, Ceylon (Sri Lanka), and Persia (Iran). The opening of the Suez Canal (1869) intensified British control.
16. Were there any positive contributions made by the British in India? Discuss.
While the motive was colonial interest, some positive side-effects occurred:
  • Introduction of Railways: It broke geographical and cultural barriers and fostered commercialization of agriculture.
  • Political Unification: A unified administrative system helped integrate the country politically.
  • Monetary System: The shift from barter system to a monetary system of exchange facilitated trade.
  • Administrative Setup: The British left behind an efficient system of administration which served as a ready reckoner for independent India.
Suggested Additional Activities
Activity 1: Comparison of Goods & Services
(Guidance): Compare items like ‘Khadi vs Synthetic cloth’, ‘Bullock carts vs Metro/Cars’, ‘Postcards vs Email/WhatsApp’. The standard of living has shifted from basic subsistence to modern convenience.
Activity 4: Occupational Scenario 2035
(Guidance): At independence, 75% were in agriculture. Today, it’s around 45-50%. By 2035, with reforms and AI, the trend will likely shift further towards the Service (Tertiary) and Quaternary (Knowledge) sectors, reducing agricultural dependency significantly.

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