CBSE Class 11 Economics NCERT Solutions: Indian Economy on the Eve of Independence

Solution: The economic policies enacted by the colonial government in India were primarily designed to serve the interests of their home country, Britain. The main objective was to transform India into a supplier of raw materials for British industries and a captive market for finished goods produced in Britain.

The impacts of these policies on India were severe and detrimental:

• Economic Backwardness: India was reduced to a state of poverty and underdevelopment.
• Agricultural Stagnation: Agriculture was characterized by low productivity, dependence on subsistence farming, and vulnerability to famines. The land tenure systems often exploited cultivators.
• De-industrialization: Traditional handicraft industries, which were once world-famous, were systematically destroyed. This led to widespread unemployment and a loss of indigenous skills.
• Limited Modern Industry: While some modern industries like textiles, iron and steel, and cement emerged, their growth was slow and largely controlled by foreign interests.
• Poverty and Unemployment: Millions of Indians faced unemployment and lived in extreme poverty, unable to afford basic necessities. Per capita income was among the lowest globally.

In essence, colonial policies hindered India's economic progress and left it in a state of underdevelopment at the time of independence.

Solution: Several prominent economists attempted to estimate India's per capita income during the British colonial period. These estimates, though varying, consistently indicated a very low income level for the average Indian. Some of the notable economists who undertook this task include:

• Dadabhai Naoroji
• V.K.R.V. Rao
• William Digby
• Findlay Shirras
• R.C. Desai

Their efforts highlighted the economic exploitation and poverty prevalent in India under colonial rule.

Solution: Indian agriculture experienced significant stagnation during the colonial era due to several key factors:

1. Land Tenure System: The British introduced various land revenue systems that often led to the exploitation of cultivators. The prominent systems were:
   • Zamindari System: Landowners (Zamindars) were made owners of the land, responsible for collecting rent from cultivators and paying a portion to the state. This system often resulted in absentee landlordism, exploitation of peasants by intermediaries, and a lack of investment in land improvement by those who actually tilled it.
   • Mahalwari System: In this system, land revenue was collected from the village community as a whole or from individual holdings within the village.
   • Ryotwari System: Under this system, cultivators were recognized as the owners of their land and were directly responsible for paying revenue to the state. However, revenue demands were often high and arbitrarily revised.
   In all these systems, the primary focus was on revenue collection for the colonial state, often at the expense of the welfare and productivity of the farmers.
2. Commercialisation of Agriculture: Farmers were increasingly compelled to shift from growing food crops for self-consumption to cultivating commercial crops (like indigo, cotton, sugarcane) demanded by British industries. This shift led to a decline in the production of food grains, making the country vulnerable to famines and food shortages. Indian agriculture was effectively transformed into a supplier of raw materials for Britain's industrial needs.
3. Partition of the Country: The partition of India in 1947 had a severe impact on agriculture. Rich food-producing regions like West Punjab and Sindh went to Pakistan, creating a food crisis in India. Similarly, fertile lands crucial for jute production were allocated to East Pakistan, devastating the Indian jute industry.

These factors collectively contributed to making Indian agriculture backward, stagnant, and unable to meet the needs of the growing population.

Solution: At the time of India's independence in 1947, the landscape of modern industries was quite limited, reflecting the impact of colonial policies. However, some key modern industries had been established:

• Tata Iron and Steel Company (TISCO): Incorporated in 1907 and established its plant in Jamshedpur, Bihar, this was a significant development in the heavy industry sector.
• Other Industries: Following the Second World War, there was a modest beginning in other sectors. These included industries producing sugar, cement, chemicals, and paper.

Despite these beginnings, the overall industrial base remained underdeveloped, with a heavy reliance on traditional handicraft production which was in decline.

Solution: The British government pursued a policy of systematic de-industrialization in India, primarily aimed at dismantling India's traditional handicraft industries. This policy had a two-fold motive:

1. To Secure Cheap Raw Materials: The British wanted to ensure a steady and inexpensive supply of raw materials from India to feed their own burgeoning industries in Britain. This effectively turned India into a mere exporter of raw materials.
2. To Create a Market for British Goods: Simultaneously, the British aimed to sell manufactured goods produced in their factories to the Indian population at high prices. This created a captive market for British products and generated substantial profits for British manufacturers.

This strategy resulted in what is often termed 'double exploitation': India lost its own industrial base and was forced to buy back finished goods at inflated prices, thereby draining its wealth.

Solution: Yes, I agree with the view that traditional handicraft industries were undermined and severely damaged under British rule. The reasons for this decline are rooted in the colonial economic policies:

• Systematic De-industrialization: The British actively pursued policies that led to the decline of India's indigenous industries. As explained in the previous question, their motive was to secure raw materials cheaply and create a market for their own manufactured goods.
• Discriminatory Tariff Policy: The British implemented a tariff policy that favored British manufactured goods and raw material exports from India. They imposed heavy duties on the export of Indian handicrafts to Britain and other countries, making them uncompetitive. Conversely, British goods were allowed to be imported into India with minimal or no duties.
• Competition from Machine-Made Goods: Indian markets were flooded with cheap, machine-made goods from Britain. These goods were often priced lower than the products made by Indian artisans, who used traditional methods and faced higher production costs. This intense competition made it impossible for many Indian handicrafts to survive.
• Loss of Markets: The decline of Indian states and royal patronage, which had historically supported many artisans, also contributed to the loss of markets for traditional crafts.

As a result, India, once renowned for its exquisite handicrafts, saw a significant decline in this sector, leading to unemployment among artisans and a loss of valuable cultural heritage.