NCERT Class 11 Economics Chapter 1: Indian Economy on the Eve of Independence YouTube Lecture Handouts

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NCERT Class 11 Economics Chapter 1: Indian Economy on Eve of Independence

  • Understand historical backdrop
  • Britishers turned India into raw material supplier for their own industrial development โ€“ exploitative nature of development

Before British Advent

  • Agriculture
  • Handicraft โ€“ cotton & silk, metal & precious stone
  • Had worldwide market โ€“ fine quality & high standards of craftsmanship
  • Muslin (from Dhaka โ€“ now in Bangladesh) โ€“ finest quality as malmal โ€“ known as malmal khas or malmal shahi

British Advent

  • Protect & promote British interest
  • Transform India into supplier of raw materials and consumer of finished industrial products from Britain
  • No sincere effort to measure national & per capita income
  • Some efforts - Dadabhai Naoroji, William Digby, Findlay Shirras, V. K. R. V. Rao (most significant estimates) and R. C. Desai
  • Countryีšs growth of aggregate real output during the first half of 20th century was growth in per capita output per year

Agricultural Sector (British Impact)

  • 85% agrarian & in villages โ€“ stagnation & deterioration (in contrast to agricultural prosperity in 17th century)
  • Agricultural productivity was low - low levels of technology, lack of irrigation facilities and negligible use of fertilizers
  • Stagnation due to land settlement โ€“ Zamindari system in Bengal (profit went to zamindars)
  • Zamindars collected rent regardless of the economic conditions
  • Revenue settlement โ€“ dates for depositing specified sums of revenue were fixed, if not zamindars were to lose their rights
  • Higher yield of cash crops in some areas (for British industries) โ€“ commercialization of agriculture (small section of farmers)
  • Majority farmers - small farmers and sharecroppers neither had resources and technology nor had incentive to invest

Industrial Sector (British Impact)

Handicrafts declined โ€“ created unemployment & demand for consumer market (as now these are not locally available)

No modern industrial base was coming up

2 fold objective - reduce India to exporter of important raw materials for industries in Britain & turn India into market for the finished products of those industries

Increased import of cheap goods from Britain

2nd half of 19th century โ€“ modern industry started but slowly โ€“ initially as cotton textile (Maharashtra & Gujarat) & jute mills (Bengal)

Early 20th century โ€“ iron & steel industry โ€“ TISCO in 1907

After WW-II: Sugar, cement & paper industry

No Capital Goods Industry (which can make machine tools to make articles for current use) to promote industrialization

Growth rate of new industrial sector & % contribution to GDP was small

Limited operation of public sector only in railways, power generation, communications, ports

Ramesh Chandra Duttีšs Economic History of India (3 volumes)

B. H. Baden-Powellีšs The Land Systems of British India (2 volumes)

Amartya Senีšs book Poverty and Famines

Foreign Trade

  • Affected by restrictive policies of commodity production, trade and tariff pursued by the colonial government
  • Britain maintained a monopoly control over Indiaีšs exports & imports
Illustration: Foreign Trade
  • More than 50% of Indiaีšs foreign trade was restricted to Britain while rest was with China, Ceylon (Sri Lanka) and Persia (Iran) โ€“ Opening of Suez Canal (connects Port Said on Mediterranean Sea with the Gulf of Suez, an arm of the Red Sea in 1869) intensified it further
Illustration: Foreign Trade
  • Generated large export surplus โ€“ but no inflow of gold or silver to India but as payment for expense of British offices
  • Essentials like food, kerosene & clothes were scarce in India

Demography

  • 1st population census in 1881 โ€“ revealed uneven distribution and growth
  • Census conducted every 10 years
  • Before 1921 - 1st stage of demographic transition
  • After 1921 โ€“ 2nd stage of demographic transition
  • Low literacy, high IMR, low life expectancy, rampant water & airborne diseases & extensive poverty
Illustration: Demography

Occupational Structure

  • Colonial period โ€“ Agriculture at around 70 - 75% , manufacturing at 10% & services at 15 - 20%
  • Regional Variations - then Madras Presidency (includes present-day Tamil Nadu, Andhra Pradesh, Kerala and Karnataka) , Bombay and Bengal โ€“ showed increase in industrial & service sectors
  • Agriculture increased in Orissa, Rajasthan & Punjab

Infrastructure

  • Development of railways, ports, water transport, posts & telegraphs (to maintain law & order) under British rule โ€“ subserve colonial interest & give basic facilities to people
  • Roads โ€“ to mobilize army & carry raw material out of nation to railways or ports
  • Acute shortage of all-weather roads to reach out to rural areas during the rainy season โ€“ suffered calamities & famines
  • Railways introduced in 1853 (1st b/w Bombay & Thane) โ€“ enabled people for long distance travel & broke geographical and cultural barriers & fostered commercialization of agriculture which affected self-sufficiency of villages
  • Exports expanded but no real benefit to people
  • Tata Airlines was established in 1932 inaugurating the aviation sector in India
  • Inland waterways were uneconomical (Coastal Canal on Odisha Coast) โ€“ huge cost & parallel to it was railways, so waterways abandoned

Challenges in SUMMARY

  • Agriculture โ€“ low productivity & surplus labour
  • Industries โ€“ needed modernization, diversification, capacity building & public investment (collapse of handicrafts)
  • Foreign trade โ€“ to feed Industrial Revolution in Britain
  • Infrastructure โ€“ required upgradation, expansion and public orientation
  • Rampant poverty & unemployment

โœ Manishika