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CLASS XI
ECONOMICS
UNIT I
DEVELOPMENT POLICIES AND EXPERIENCE
(1947-90)

INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

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Q1. What was the focus of economic policies pursued by the colonial government in India? What were the impacts of these policies?
Answer: The focus of economic policies pursued by the colonial government in India was to reduce the country to being a feeder economy for Great Britain’s own rapidly expanding modern industrial base. Those policies were more concerned with the protection and promotion of the economic interests of their home country than the development of the Indian economy.
The impacts of those policies are as follows:
- our country became the net supplier of raw materials and consumer of finished goods from Britain.
- Insignificant growth in GDP, National and Per Capita Income.
- Lack of Industrialization, etc.
Q2. Name some notable economists who estimated India’s per capita income during the colonial period.
Answer: Name of some of the notable economists who estimated India’s per capita income during the colonial period are as follows: - Dadabhai Naoroji,
- William Digby,
- Findlay Shirras,
- V.K.R.V. Rao and
- R.C. Desai.
Among these it was Rao whose estimates of the national and per capita incomes during the colonial period were considered very significant.
Q3. What were the main causes of India’s agricultural stagnation during the colonial period?
Answer: The main causes of India’s agricultural stagnation during the colonial period are as follows: - Faulty systems of land settlement that were introduced by the colonial government, particularly the zamindari system.
- The profit accruing out of the agriculture sector went to the zamindars instead of the cultivators. However, the zamindars, did nothing to improve the condition of agriculture. The main interest of the zamindars was only to collect rent regardless of the economic condition of the cultivators.
- The terms of revenue settlement were rigid. Dates for depositing specified sums of revenue were fixed, failing which the zamindars were to lose their rights. - Low levels of technology.
- Lack of irrigation facilities.
- Negligible use of fertilizers.
Q4. Name some modern industries which were in operation in our country at the time of independence.

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Answer: The modern industries which were in operation in our country at the time of independence are as follows: - Cotton Textile Industries.
- Jute Textile Industries.
- Iron and Steel Industries.
- Sugar Industries.
- Cement Industries.
- Paper Industries, etc.
Q5. What was the two-fold motive behind the systematic deindustrialization effected by the British in pre-independent India?
Answer: The two-fold motive behind the systematic de-industrialization effected by the British in pre-independent India was, first, to reduce India to the status of a mere exporter of 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.
Q6. The traditional handicrafts industries were ruined under the British rule.
Do you agree with this view? Give reasons in support of your answer.
Answer: Yes I do agree with the view that the traditional handicrafts industries were ruined under British rule. It created a new demand in the Indian consumer market, which was now deprived of the supply of locally made goods. This demand was profitably met by the increasing imports of cheap manufactured goods from Britain.
Q7. What objectives did the British intend to achieve through their policies of infrastructure development in India?
Answer: Under the colonial regime, basic infrastructure such as railways, ports, water transport, posts and telegraphs did develop. However, the real motive behind this infrastructure development was not to provide basic amenities to the people but to sub serve various colonial interests. Like the roads that were built primarily served the purposes of mobilizing the army within India and 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. The introduction of the expensive system of electric telegraph in India, similarly, served the purpose of maintaining law and order.
Q8. Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.
Answer: As we know the industrial policy pursued by the British colonial administration was solely to facilitate the upcoming modern industries in Britain.
Though during the second half of the nineteenth century, modern industry began to take root in India but its progress remained very slow. Initially, this development was confined to the setting up of cotton and jute textile mills. Subsequently, the iron and steel industries began coming up in the beginning of the twentieth century. The
Tata Iron and Steel Company (TISCO) was incorporated in 1907. A few other

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War.
However, there was hardly any capital goods industry to help promote further industrialization in India. The establishment of a few manufacturing units here and there was no substitute of the near wholesale displacement of the country’s traditional handicraft industries. Furthermore, the growth rate of the new industrial sector and its contribution to the Gross Domestic Product (GDP) remained very small. Another significant drawback of the new industrial sector was the very limited area of operation of the public sector. This sector remained confined only to the railways, power generation, communications, ports and some other departmental undertakings. Q9. What do you understand by the drain of Indian wealth during the colonial period?
Answer: India has been an important trading nation since ancient times. But the restrictive policies of commodity production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade. Consequently India became an exporter of primary products and an importer of finished consumer goods and capital goods.
The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus. But this surplus came at huge cost to the country’s economy. Furthermore, this export surplus did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war, again fought by the British government, and the import of invisible items, all of which led to the drain of Indian wealth.
Q10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?
Answer: The year 1921 is regarded as the defining year to mark the demographic transition from its first to the second decisive stage.
Q11. Give a quantitative appraisal of India’s demographic profile during the colonial period.
Answer: After the year 1921 which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage, the overall literacy level was less than 16%. Out of this the female literacy level was at a negligible low of about 7%. The infant mortality rate was quite alarming- about 218 per thousand in contrast to the present infant mortality rate of 63 per thousand. Life expectancy was also very low- 32 years in contrast to the present 63 years. In the absence of reliable data, it is difficult to specify the extent of poverty at that time but there is no doubt that extensive poverty prevailed in India during the colonial period.

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Q12. Highlight the salient features of India’s pre-independence occupational structure. Answer: The salient features of India’s pre-independence occupational structure are as follows: The agricultural sector accounted for the largest share of work force, which usually remained at a high of 70-75% while the manufacturing and the services sectors accounted for only 10 and 15-20% respectively. Another striking aspect was the growing regional variation. Parts of the then Madras Presidency (comprising areas of the present-day states of TamilNadu, Andhra Pradesh, Kerala and Karnataka),
Maharashtra and West Bengal witnessed a decline in the dependence of the workforce on the agricultural sector with a commensurate increase in the manufacturing and the services sectors. However, there had been an increase in the share of workforce in agriculture during the same time in states such as Orissa,
Rajasthan and Punjab.
Q13. Underscore some of India’s most crucial economic challenges at the time of independence.
Answer: By the time India won its independence, the impact of the two-century long British colonial rule was already showing on all aspects of the Indian economy.
The agricultural sector was already saddled with surplus labour and extremely low productivity. There was an urgent need of modernization, diversification, capacity building and increased public investment in industrial sector. Foreign trade was oriented to feed the Industrial Revolution in Britain. Infrastructure facilities, including the famed railway network, needed up gradation, expansion and public orientation.
Prevalence of rampant poverty and unemployment required welfare orientation of public economic policy.
Q14. When was India’s first official census operation undertaken?
Answer: In the year 1881 India’s first official census operation wan undertaken.
Q15. Indicate independence. the

volume

and

direction

of

trade

at

the

time

of

Answer: Due to restrictive policies of the colonial government India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute etc. and an importer of finished consumer goods like cotton, silk and woolen clothes and capital goods like light machinery produced in the factories of Britain, For all practical purposes, Britain maintained a monopoly control over India’s exports and imports,
As a result, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (Sri Lanka) and Persia
(Iran).

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Q16. Were there any positive contributions made by the British in India?
Discuss.
Answer: We know that everything has its positive and negative aspects. So with so many negatives there were some positive contributions made by the British in India.
Though it was not intentional but it was out of their own needs.
The British introduced the railways in India in 1850 and it is considered as one of their most important contributions. The railways affected the structure of the Indian economy in two important ways, On the one hand it enabled people t undertake long distance travel and thereby break geographical and cultural barriers while, on the other hand, it fostered commercialization of Indian agriculture which adversely affected the comparative self-sufficiency of the village economies in India. The volume of the India’s export trade undoubtedly expanded.
Along with the development of roads and railways, the colonial dispensation also took measures for developing the inland trade and sea lines.
It also introduced the electric telegraph and the postal services in India which served a useful public purpose.

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