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INDIAN ECONOMY ON THE EVE OF INDEPENDENCE
- Objective of study: familiarize with the basic features of the Indian economy, and its development after independence.
- Assessment of the kind and level of Indian Economic development.
- country’s economic past :
- sole purpose of the British colonial rule – to reduce the country to being a raw material supplier for Great Britain’s industries.
- An understanding of the exploitative nature of this relationship.
CHAPTER 1: INDIAN ECONOMY ON THE EVE OF INDEPENDENCE
- LOW LEVEL OF ECONOMIC DEVELOPMENT UNDER THE COLONIAL RULE
- AGRICULTURAL SECTOR
- INDUSTRIAL SECTOR
- FOREIGN TRADE
- DEMOGRAPHIC CONDITION
- OCCUPATIONAL STRUCTURE
- INFRASTRUCTURE
- ECONOMIC DEVELOPMENT UNDER THE COLONIAL RULE:
- Situation of Indian economy before British rule:
- Independent:
- Through agriculture was the main source of livelihood for most people, yet, the country’s economy was characterised by various kinds of manufacturing activities.
- Well known for its handicraft industries (cotton, silk textiles, metal, precious stone works); access in worldwide market. For example: textile industry in Bengal; Daccai muslin (MalMal shahi or malmal khas) is a type of cotton textile around Dhaka.
- Economic policies: protection and promotion of the economic interests of UK than with the development of the Indian economy. Structure of the Indian economy transformed into supplier of raw materials and consumer of finished industrial products.
- National & per capita income: never did sincere attempts but individual attempts (conflict) by Nairobi, William Digby, Findlay Shiras, V.K.R.V. Rao (significant) and R.C. Desai: REAL GDP <2%, per capita output .5%
- AGRICULTURAL SECTOR in COLONIAL RULE
- Agrarian economy; 85% population in villages, derived livelihood from agriculture.
- Stagnation in agriculture sector: because of favorable land settlements (Zamindari system, Mahalwari, Ryotwari).
- Absolute Agricultural productivity LOW; Some growth in total production due to expansion of aggregate area (Non-fertile to fertile).
- Commercialization of agriculture but many problems- investment in terracing, flood-control, drainage, desalinisation of soil.
- Tenants, small farmers, sharecroppers not had- resources, technology, incentive to invest in agriculture for CASH CROPS.
- BERNIER: French traveler came in Bengal 2 times (in 17th AD): Described the prosperity of India as:
- Richer than Egypt,
- Abundance exports of cottons, silks, rice, sugar and butter;
- Produces enough for own consumption- wheat, vegetables, grains, fowls, ducks and geese;
- Rear- pigs, sheep, goats, Fish of every kind;
- Endless number of canals (from the Ganges) from Raajmahal to sea; for navigation and irrigation.
ZAMINDARI SYSTEM:
- Implemented by: Lord Cornwallis in 1990 and converted as permanent settlement in 1993.
- Area: Bengal Presidency , eastern states, Varanasi; Fertile areas.
- How did exploitation ?
- Profit accruing out of the agriculture sector went to the zamindars instead of the cultivators.
- Did nothing to improve the condition of agriculture (Neither zamindars nor colonial government):
- Zamindar’s main interest: collect rent regardless of the economic condition of the cultivators; IMPECT: agricultural productivity decrease-> plight of the farmers (Other causes: low levels of technology, lack of irrigation facilities and negligible use of fertilizers)
- Why such attitude by Zamindars ? In this revenue settlement, dates for depositing specified sums of revenue were fixed, failing which the zamindars were to lose their rights. Later introduced distance Zamindaris system.
- Commercialization of agriculture: In certain areas, cash crops produced but couldn’t improve real situation of peasants because:
- These cash crops ultimately used by British industries.
- cropping pattern changed by some farmers (food crops to commercial crops) but a large section (tenants, small farmers and sharecroppers) not had resources, technology and incentive.
- Some improvements in irrigation but lack of investment in terracing, flood-control, drainage and desalinisation of soil.