Chapter 1: Indian Economy On The Eve of Independence (IED) Ncert Questions

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Chapter 1: Indian Economy on the Eve of Independence (IED)

NCERT QUESTIONS
Q(1). What was the focus of the economic policies pursued by the colonial
government in India? What were the impacts of these policies?
Ans. The economic policies pursued by the colonial government in India were
concerned more with protection and promotion of the economic interests of their
home country rather than the development of India.
These policies brought about a fundamental change in the structure of Indian
economy transforming the country into a supplier of raw materials and consumer of
British industrial products.

Q(2). Name some notable economists who estimated India’s per capita income
during the colonial period.
Ans. Some notable estimators of India’s National and PCI were- Dadabhai Naoroji,
William Digby, Findlay Shirras, VKRV Rao and R.C Desai- it was Rao whose
results were considered significant.

Q(3). What were the main causes of agricultural stagnation during the British
rule?
Ans. The Indian economy was fundamentally agrarian- 85% population depended
directly or indirectly on agriculture. Despite this, the sector experienced stagnation
mainly because of the following reasons-

Land Settlement System:


1. The zamindari system prevailed during the colonial rule. Under this the profit
accruing out of agriculture went to zamindars.
2. The main interest of zamindars was only to collect rent (lagaan). This was
because dates of depositing specifically sum of revenue were fixed, failing which
the zamindars were to lose their rights.
3. Neither the colonial government nor the zamindars did anything to improve the
condition of agriculture.

Commercialization of Agriculture:
1. Commercialization of Agriculture means the production of crops for sale in
market rather than for self-consumption.
2. Instead of producing food crops, the farmers started producing cash crops which
were ultimately used by British industries back home.
3. High prices of cash crops attracted the farmers to produce them. The fall in
production of food crops was responsible for frequent famines in India during
the British days
4. Hence India had to import food grains from Britain.

Low Level of Productivity:


1. Low level of technology and lack of irrigation facilities and negligible use of
fertilizers, all added up to aggregate the dismal level of productivity.
2. The British government and zamindars did not take any efforts to improve the
state of agriculture.

Scarcity of Investment:
1. India’s agriculture didn’t have investment in terracing, flood control, drainage and
desalinisation of soil.
2. A large sector of tenants, small farmers and sharecroppers neither had resources
nor the incentive to invest in agriculture. While a small section of farmers
changed their cropping pattern from food crops to commercial crops.

Adverse Effects of Partition:


1. A major portion of the undivided country’s highly irrigated and fertile land went to
Pakistan.
2. Almost the whole of jute producing area became a part of East
Pakistan( Bangladesh). The jute goods industry which had enjoyed a world
monopoly suffered heavily due to lack of raw materials.

Q(4). Name some modern industries which were in operation in our country at the
time of independence
Ans. A few modern industries started to come up during the second half of 19 th century.
 The industries established were mainly confined to cotton and jute textile
mills.
 The cotton textile mills dominated by the Indians were located in parts of
Maharashtra and Gujarat.
 The jute mills, dominated by foreigners were concentrated in Bengal.
 In 1907, Tata Iron and Steel Corporation was established being one of the
only large-scale companies of this country.
 Some other industries in fields of sugar, cement, paper etc. came after World
War II.

Q(5). What was the two fold motive behind the systematic de-industrialization
effected by British in India?
Ans. The primary motive of the colonial government behind the industrial policy was
two-fold:
1. The intention was to reduce India to the status of a mere exporter of raw
materials for upcoming modern industries in Britain.
2. Second, to turn India into a sprawling market for finished goods of those
industries so that their continued expansion could be ensured to the maximum
advantage of their home country – Britain.

Q6. The traditional handicraft industry was ruined under the British Rule. Do you
agree? Give reason to support your answer.
Ans. Prior to the British rule, handicrafts in India enjoyed a worldwide reputation of
excellence and quality. But the British rule contributed to their decay by the
following means:
1. Discriminatory Tariff Policy of State : The British found India as the source of
raw materials as well as the best market for the industrial products. Accordingly,
the discriminatory tariff policy was pursued. It allowed tariff free export of raw
materials from India and tariff free import of British industrial products into India.
But at the same time heavy duties was placed on export of handicraft products.
As a result, the British products started gaining the Indian market. The handicraft
products start losing their domestic as well as foreign market.
2. Disappearances of Princely Courts: Prior to the British rule, Rajas Nawabs
used to patronage the handicrafts because of which the Indian handicraft
industry had acquired international reputation. The beginning of British rule
implied the end of Princely courts. Consequently, the handicrafts started
decaying.
3. Competition from machine made products: Machine made products from
Britain were low cost products and of better quality which gave a stiff competition
to the handicrafts products in India and forced the Indian craftsmen to shut down
their enterprises.
4. New Pattern of Demand : During to the impact of British culture, a new class
emerged in India which was keen to adopt a western lifestyle. The changed
pattern of demand against Indian products was in favor of British products.

Q 7. What objectives did the British intend to achieve through their policies of
infrastructure development in India?
Ans. The basic objective of British government to develop infrastructure was not to
provide basic amenities to the people but to serve their own colonial interest.
Roads were built for mobilizing army within India and draw out raw material from
the countryside to the nearest railway station or ports and to send these to Britain
or other foreign country.
Railways were adopted for three main reasons:
a. To have effective control and administration own the vast Indian territory.
b. To earn more through foreign trade by linking railways with major ports.
c. To make profitable investment of British funds in India.
Communication: The system of Electric Telegraph was introduced at a high cost
to serve the purpose of maintaining law and order. The postal services, despite serving
a useful public purpose, remained all through inadequate.

Q(8). Critically appraise some shortfalls of the industrial policy pursued by the
British administration.
Ans. India could not develop a sound industrial base under the colonial rule. Even as
the country, world famous handicrafts industry declined, no corresponding modern
industrial base was allowed to come up.
1. Decline of Handicraft Industry: The two-fold motive of the colonial government
behind the systematic deindustrialization:
(a) To get raw materials from India at a cheap rate and thus reduce India to the
status of a mere exporter of important raw materials for the upcoming modern
industries in Britain
(b) 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

2. Adverse effects of decline of Handicrafts Industry: The decline of the


indigenous handicraft industries:
 Created massive unemployment in India
 Increased the pressure of population on agriculture sector.
 Also created a new demand for British manufactured goods in the
consumer market because it was now deprived of the supply of locally
made goods.

3. Lack of capital goods Industries: During the second half of the 19th century,
modern industries came but their progress was very slow.
 The development was confined to cotton mills (Maharashtra and Gujarat)
and jute mills (Bengal)
 In 1907, TISCO was incorporated being one of the only large-scale
industries.
 A few small industries like sugar, cement, paper etc. come up after Second
World War.
 There were hardly ever any capital goods industries (which produce
machine tools used for further production).

4. Low contribution to GDP: The growth rate and contribution of the new industrial
sector to GDP was very small.

5. Limited Role of public sector: Drawback of this sector was the limited area of
operation of public sector. This sector remained confined only to the railways,
power generation, communication ports and some other departmental
undertakings.

Q9. What do you understand by drain of India wealth during British Rule?
Ans. The most important characteristic of India’s foreign trade throughout the colonial
period was the generation a large export surplus (exports of raw material> imports
of finished goods).

But this 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.
 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 the colonial government in Britain; expenses on
war fought by the British Government, and to import invisible items.

Thus, in this way export surplus led to one way transfer of resources from India to
England, which was termed as “Drain of wealth”

Q10 Which is regarded as the defining year to mark the demographic transition
from its first to second decisive stage?
Ans. 1921 – The year of Great Divide.

Q11. Give the quantitative aspects of India’s demographic profile during the
colonial period?
Ans. Various Quantitative aspects about the population of British India were first
collected through a census in 1881. Subsequently, every ten years such a census
was carried out. Before 1921, India was in the 1 st stage of demographic transition
and it entered into its second stage after 1921. High birth rate and high death rate
implied slow growth of population due to poverty, malnutrition, famines, epidemics)

Qualitative aspects:
The various social development indicators were:
Low Literacy Rate: The overall literacy rate was less than 16%, out of this female
literacy rate was at a negligible low of 7%.
Poor Public Health Facilities: The public healthcare facilities were either
unavailable to large chunks of people or when available were highly inadequate.
Consequently, water and air borne diseases were rampant.
High Mortality Rate: The overall mortality rate was very high, particularly the infant
mortality rate was quite alarming – about 218 per 1000 as compared to present IMR
33 per 1000. The birth rate and death rate were high as 48 and 40 per 1000
respectively.
Low Life Expectancy: The average life expected was just 32 years in contrast to 69
years at the present.
Widespread Poverty: Extensive poverty prevailed in India during the colonial period
which contributed to the worsening profile of India’s population.

Q12 Highlight the salient features of India’s pre independence occupational


structure?
Ans. During the colonial period, the distribution of workforce in different industries and
sectors showed a little sign of change.
1. Pre-Dominance of Agriculture: The agriculture sector accounted for the largest
share of workforce, which usually remarked at a high of 70 to 75% while the
manufacturing and service sector accounted 10% and 15-20% respectively.
2. Growing Regional Variation: Parts of Madras Presidency comprising states of
Tamil Nadu, Andhra Pradesh, Kerala, and Karnataka witnessed a decline in
dependence on agriculture sector and a shift to manufacturing and service
sector. However, there had been an increasing share of workforce in agriculture
in the states of Orissa, Rajasthan and Punjab.

Q13. Underscore some of India’s most crucial economic challenges at the time of
independence?
Ans. 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 up with surplus labour and
extremely low productivity.
 Industrial Sector was crying for modernization, diversification, capacity
building and increased public investment.
 Foreign trade was oriented to feed the industrial revolution in Britain.
 Infrastructure facilities, including railways needed upgradations, 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 undertaken?


Ans. 1881

Q15. Indicate the volume and direction of trade at the time of independence?
Ans.
1. Composition: India became an important exporter of primary products such as
raw silk, cotton, wool, sugar, indigo and jute and an importer of finished
consumer goods such as cotton, silk, woollen clothes and capital goods like light
machinery produced in factories of Britain.
2. Direction: During its rule, Britain maintained almost a monopoly control over
India’s foreign trade. More than half of India’s foreign trade was restricted to
Britain while the rest was allowed with a few other countries like China,
Persia ,Ceylon and the opening of the Suez Canal further intensified the British
Control over India’s foreign trade.
3. Volume: The most important characteristic of India’s foreign trade throughout the
colonial period was the generation a large export surplus (exports > imports).
But this surplus proved to be disadvantageous for the economy as it led to
economic drain of India’s wealth.

Q16. Were there any positive contributions made by the British in India? Discuss.
Ans. The motive behind all British policies was only colonial exploitation of Indian
economy. However, the means to achieve the end yielded some positive effects. These
are as under:
1. Commercial Outlook of Farmers: Forced commercialization of agriculture
under British rule exposed the substance farmers to the uncertainties of market.
But it also led to a gradual change in their outlook. The farmers started
considering market price as an important determinant of their production
decision.
2. Better Means of Transportation: Development of roads and railways provided
cheap and rapid transport system and opened up new opportunities of economic
and social growth.
3. Check on Famines: Roads and railways worked as a great check on famines
and its impact as food supplies could be transported to the affected areas in case
of droughts.
4. Shift to Monetary Economy: British rule helped Indian economy to shift from
barter system of exchange to monetary system of exchange.
5. Effective Administrative Setup: The British Government has an effective
administrative system, which served as a ready system for Indian Politicians.

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