IED Chapter 1

• India was well known for its handicraft industries in cotton and silk textiles, metal, and precious stone works
• Policies of the colonial government that led to low economic development during the pre-independence period:

  • Economic policies aimed at protecting and promoting colonial economic interests
  • India became a supplier of raw materials to British industries
  • India became a consumer of finished industrial products from Britain
• Notable estimators of National Income and per capita income:

  • Dadabhai Naoroji
  • William Digby
  • Findlay Shirras
  • V.K.R.V. Rao
  • R.C. Desai
• Studies found that India's national income growth in the pre-Independence era was less than 2%

  • Per capita income growth was half a percent
• 85% of the population depended on agriculture
• The agricultural sector experienced stagnation and deterioration
• Reasons for the stagnation and deterioration:

  • Land settlement systems under the zamindari system led to exploitation of cultivators by zamindars
  • Zamindars were focused on rent collection rather than improving the condition of the land
  • Terms of revenue settlement forced zamindars to prioritize rent collection over land improvement
  • Fixed dates for revenue deposits, failure to comply resulted in loss of rights
• Factors contributing to the stagnation and deterioration:

  • Low level of technology
  • Lack of irrigation facilities
  • Negligible use of fertilizers
  • Lack of investment in terracing, flood control, drainage, and desalinization of soil
• The primary motive of the colonial government behind the policy of systematically deindustrializing India was to:

  • Make India a raw material supplier for the upcoming modern industries in Britain
  • Make India a sprawling market for the finished products of those industries
• Cotton and jute textile mills were set up in India:

  • Cotton textile mills were located in Maharashtra and Gujarat
  • Jute textile mills were concentrated in Bengal
• The Tata Iron and Steel Company (TISCO) was incorporated in 1907
• The capital goods industry refers to industries that can produce machine tools used for producing articles for current consumption
• The new industrial sector had a very limited area of operation of the public sector
• India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute
• India also became an importer of finished consumer goods like cotton, silk, and woolen clothes and capital goods like light machinery produced in the factories of Britain
• The colonial government maintained a monopoly over India’s trade
• More than half of India’s foreign trade was restricted to Britain while the rest was with China, Ceylon (Sri Lanka), and Persia (Iran)
• The opening of the Suez Canal in 1869 further helped to intensify British control over India’s foreign trade
• The generation of a large export surplus came at a huge cost to the country’s economy
• Several essential commodities – food grains, clothes, kerosene, etc. were scarcely available in the domestic market
• The export surplus did not result in any flow of gold or silver into India
• The export surplus was used to make payments for the administrative expenses of the British, war expenses, and import of invisible items (leading to the Drain of Indian Wealth)
• The opening of the Suez Canal in 1869 reduced the cost of transportation and made access to the Indian market easier
• • The population of British India was first collected through a census in 1881.
  • India entered the second stage of demographic transition after 1921.
  • The year 1921 is regarded as the ‘Year of the Great Divide’.
  • Some Social Development Indicators:
  • The overall literacy level was less than 16%. (Female literacy rate was 7%).
  • Public health facilities were either unavailable or inadequate.
  • The overall mortality rate was very high.
  • Alarming infant mortality rate (218/1000).
  • Life expectancy was also very low – 32 years.
• Roads

  • The roads that were built primarily served the purpose of

  1. mobilizing the army within India.
  2. drawing out raw materials from the countryside to the nearest railway station or the port to send these to far away England or other lucrative foreign destinations.
• Railways

  The British introduced the railways in India in 1850.

  Impacts:

  • It enabled people to undertake long-distance travel and thereby break geographical and cultural barriers.
  • It fostered the commercialization of Indian agriculture which adversely affected the self-sufficiency of the village economies in India.
  • The volume of India’s exports expanded but its benefits did not accrue to the Indian people.
• The positive contributions made by the Britishers in India were:

  • The development of roads and railways opened up new opportunities for economic and social growth.
  • British rule helped the Indian economy to shift from a barter system of exchange to a monetary system of exchange.
  • Modernization of agriculture: The British introduced modern agricultural practices, such as the cultivation of cash crops like tea, coffee, and cotton, which helped in the development of the agriculture sector in India.