Plus One Economics – Chapter 1 Indian Economy on the Eve of Independence
MULTIPLE CHOICE QUESTIONS
- Occupational structure of India is divided into …. sectors.
- What is the another name of service sector?
- None of these
- What is the nature of Indian economy on the eve of Independence?
- All of these
- Life expecting at birth on the eve of Independence was-
- 23 years
- 32 years
- 64 years
- 42 years
- Growth rate of per capita income on the eve of independence was-
- Primary sector includes-
- All of these
- Manufacturing comes in the
- None of these
- The first iron and steel company was established in
- On the eve of Independence major occupation was-
- All of these
- The first census of India was conducted in the year
D. All of these
B. 32 years
VERY SHORT ANSWER TYPE QUESTIONS
Handicrafts industries, metal and precious stone works, cotton and jute textile mills, iron and steel industries were in operation in our economy at the time of Independence.
Primary sector refers to that sector wherein goods are produced by making use of natural resources.
Secondary sector refers to that sector wherein the enterprises transform goods from one type to another.
The sector which provides services such as banking, insurance, transport, communication, trade, commerce etc. is known as tertiary sector.
At that time, the nature of Indian economy was stagnant and backward.
It refers to the relative importance of primary, secondary and tertiary sectors in terms of output and employment.
Stagnant economy is that one, where the pace of development remains extremely low.
It was 72.7 per cent of the population.
It was 10.1 per cent of the population.
The percentage of population engaged in tertiary sector was 17.2 per cent on the eve of Independence.
The first official census was exercised in 1891.
In three sectors.
SHORT ANSWER TYPE QUESTIONS
Colonialism is the practice of acquiring colonies by conquest or other means and making them dependent was one of the ways to expand power, control or rule, by a country over the economic and political life of areas outside its borders. Exploitation is the main feature of colonialism.
Generally, commercialisation of agriculture implies production of crops for the market rather than for self-consumption. During British rule it acquired a different meaning. It became basically commercialisation of crops. The British started offering higher prices to farmers for producing cash crops rather than for food crops. British government used these cash crops as raw materials for industries in Britain.
Tariff is a tax or a duty on imports which can be levied either on physical units or on value. Tariff is imposed for a following variety of reasons:
This stage is associated with pre-modern times and is characterized by a balance between birth rates and death rates. In this stage both birth and death rates are very high, which resulted in only very slow population growth. This stage is also known as the "High Stationary Stage" of population growth.
The death rates are high in the first stage of demographic transition due to, lack of knowledge of disease prevention and cure. Occasional food shortages is also another reason for the high death rates in this stage.
Level of Economic Development. Before the advent of the British rule, India was well known for its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc. The economic policies of the British government in India were concerned more with the protection and promotion of the economic interests of their mother country, than with the development of the Indian economy. Indian economy was a mere supplier of raw materials and consumer of the finished industrial products from England. As a result of it, the level of development in India was very low. Its growth of the aggregate real output during that period was less than 2 per cent and the growth of per capita output per year was only half per cent.
Scenario of Foreign Trade. British colonial rule adversely affected the structure, composition and volume of India’s foreign trade. India became an importer of finished consumer goods like cotton, silk, woollen clothes, and capital goods like light machinery and exporter of primary products like raw silk, cotton, wool, sugar, indigo and jute etc., which led to the drain of Indian wealth. Thus the structure of foreign trade was typically colonial with primary goods being exported and finished goods imported and trade relations being confined to Britain and its other colonies.
LONG ANSWER TYPE QUESTIONS
The focus of the economic policies pursued by the colonial government in India was concerned more with the protection and promotion of the economic interests of their home country, than with the development of the Indian economy.The impacts of these policies were to bring about a fundamental change in the structure of the Indian economy, by transforming the country into a mere supplier of raw materials and consumer of finished industrial products from Britian.
The primary motive of the colonial government behind this policy of systematically de-industrialising India was two-fold. The intention was, first, to reduce India to the status of a mere exporter of important raw materials for the upcoming modern industries in Britain and, second, to turn India into a sprawling market for the finished products of those industries, so that, their continued expansion could be ensured to the maximum advantage of their home country Britain.
- (i) The economic policies pursued by the colonial government in India were concerned more with the protection and promotion of the economic interests of their mother country, than with the development of the Indian economy.
- (ii) During British period, Indian economy was transformed into a mere supplier of raw materials and consumer of the finished industrial products from Britain.
- (i) They wanted to protect and promote economic interests oftheir mother country.
- (ii) They wanted to hinder the economic development of Indian economy.
- (iii) They wanted to transform the Indian economy into a mere supplier of raw materials and consumer of finished industrial products from Britain.
- (i) The decline of the indigenous handicraft industries.
- (ii) Slow progress of modern industries.
- (iii) Absence of capital goods industry.
- (iv) The contribution of industrial sector to the G.D.P. remained very small.
- (i) The distribution of working persons across different industries and sectors showed little sign of change.
- (ii) The agricultural sector accounted for the largest share of work force, which usually remained at a height of 70-75 percent, while the manufacturing and the service sectors accounted for only, 10 and 15-20% respectively.
|Table 1.1 Occupational Distribution of India at the Time of Independence.|
|Occupation||1951 (in percentage)|
|1. Primary Sector||72.7|
|(i) Agriculture(ii) Agricultural Labour(iii) Forestry, Fisheries, Animal Husbandry and Plantation(iv) Mining||50 19.7 2.4 0.6|
|2. Secondary Sector||10.1|
|(i) Small and Large Scale industries(ii) Building Construction||9.0 1.1|
|3. Tertiary Sector||17.2|
|(i) Trade and Commerce(ii) Transport, Storage and Communication(iii) Other Services||5.2 1.4 10.6|
- i. Agriculture was the Main Source of Subsistence. Agriculture was the main source of subsistence on the eve of Independence. 72.7 per cent of the population of India was dependant on agriculture and this sector was the main contributor to the national income.
- ii. Inadequate Agricultural Production. Level of production and productivity in Indian agriculture was extremely low at the time of Independence. As a result of it, agricultural production was inadequate to meet the demand of the country. In 1947, only 13 crore hectare of land was under cultivation and total production of foodgrains was 527 lakh tonnes. Out of which, the production of rice and wheat was 17 and 64 lakh tonnes respectively.
- iii. Land Tenure System. Zamindari, Mahalwari and Ryotwari systems of land tenure were prevalent in the Indian economy at the time of Independence. Under this system, the profit accruing out of the agricultural surplus went to the middlemen instead of the cultivators.
- iv. Commercialisation of Agriculture was Limited. Agricultural production was mainly for self-subsistence of the farmers and a little surplus for sale was generated in the market. Thus commercialisation of agriculture was very limited.
- v. Stagnant and Backward Economy. Indian economy at the time of Independence was stagnant and backward economy. The pace of development was extremely low. The growth rate of per capita income was only 0.5 per cent per year.
- vi. Little Growth of the Consumer Goods Industries. At the time of Independence, source of consumer goods industries like jute, textile, sugar, match box etc., were established in India which were aided by British capital. The profit of these industries went to Britain. As a result these industries were backwarded at that time.
- vii. Less Development of Infrastructure. At the time of Independence, the growth of economic as well as social infrastructure was very low. These services were in their infant stages.
- viii. Downfall of Cottage and Small Scale Industries. Prior to the British rule, India was particularly well known for its handicraft industries in the field of cotton, silk textiles, metal and precious stone works etc. which enjoyed world wide market. But the policy of British colonial rule led to their downfall. At the time of Independence, these industries were almost in a state of ruin.
- ix. Lack of Basic Industries. At the time of Independence, there was a lack of basic industries. Tata Iron and Steel Company was the only important basic industry.
- x. Limited Foreign Trade. At the time of Independence. India’s foreign trade was very limited. India was the exporter of raw materials and importer of finished goods.
- xi. Other Challenges. At the time of Independence, Indian economy was facing many other challenges like poverty, malnutrition, poor health facilities and rapidly increasing population.
- i. India was Treated as a Supplier of Raw Materials to the British Industry. There was an Industrial Revolution in England in the eighteenth century. For the cheap raw materials, British industries were wholly dependant on Indian economy. They exploited the Indian economy to the maximum extent.
- ii. Indian Economy was a Market for the British Products. Indian economy was used as a market for the finished products by the British rule. For this purpose, British government developed railways in India.
- iii. Exploitative Land Revenue Policy. The stagnation in the agricultural sector was caused mainly because of exploitative land revenue policy. Under this policy, the profit accruing out of the agriculture surplus went to zamindars instead of the cultivators.
- iv. High Cost of Administration and Large Scale Remittances. The British colonial rule inflicted upon the Indian economy a very high cost of administration. It also made heavy remittances to Britain in the form of savings and surpluses from their business ventures in India.
- v. Destructive Approach Towards the Indian Handicrafts. Before the British rule, Indian handicrafts enjoyed a worldwide reputation of being quality products. British colonial rule destroyed the demand for Indian handicrafts by imposing discriminatory tariff policy.
- vi. Deliberate Neglect of Economic and Social Infrastructure. British colonial rule deliberately neglected the development of economic infrastructure such as transportation, power, communication and social infrastructure such as education, health and housing etc.