Indian Economy before Independence Ugc Net,Upsc and other competitive exam

Indian Economy

Indian Economy before Independence Ugc Net   www.iemsnet.com

The Indian economy under the British Raj describes the economy of India during the years of the British Raj, from 1858 to 1947.

GDP

 India's GDP during the British Raj grew in absolute terms but declined in relative share to the world.

The role and scale of British imperial policy on India's relative decline in global GDP remains a topic of debate among economists . With many  believe the effect of British rule was highly negative. That Britain engaged in a policy of de-industrialisation of India for the benefit of British exports, leaving Indians poorer than before British rule began.And others arguing Britain's impact on India was either broadly neutral or positive and that India's declining share of global GDP was due to other factors such as new industrilastion.

India trade

In the seventeenth century, India was a relatively urbanised and commercialised nation with a buoyant export trade, devoted largely to cotton but also including silk, spices, and rice. India was the world's main producer of cotton textiles and had a substantial export trade to Britain, as well as many other European countries, via the East india company.

Indian textiles were banned from import in the calico act of 1720.

After the British victory over the Mughal Empire (Battle of Buxar, 1764) India was deindustrlised by successive British and colonial policies .

Yet as the British cotton industry underwent a technological revolution during the late 18th to early 19th centuries, the Indian industry stagnated and was deindustrlisation.

Even as late as 1772, Henry Patullo, in the course of his comments on the economic resources of Bengal, could claim confidently that the demand for Indian textiles could never reduce, since no other nation could equal or rival it in quality. However, by the early nineteenth century, the beginning of a long history of decline of textile exports is observed.

A commonly cited legend is that in the early 19th century, the East India Company (EIC), had cut off the hands of hundreds of weavers in Bengal in order to destroy the indigenous weaving industry in favour of British textile imports (some anecdotal accounts say the thumbs of the weavers of Dacca were removed). However, this is generally considered to be a myth, originating from willam bolts ' 1772 account where he alleges that a number of silk spinners had cut off their own thumbs in protest at poor working conditions.

INDUSTRIAL REVOLUTION

British control of trade, and exports of cheap Manchester cotton are cited as significant factors, though Indian textiles had still maintained a competitive price advantage compared to British textiles until the 19th century. Several historians point to the colonization of India as a major factor in both India's deindustrialization and Britain's Industrial Revolution.British colonization forced open the large Indian market to British goods, which could be sold in India without any tariffs or duties, compared to local Indian producers who wereheavily taxed.InBritain protectionist policies such as bans and high tariffs were implemented to restrict Indian textiles from being sold there, whereas raw cotton was imported from India without tariffs to British factories which manufactured textiles. British economic policies gave them a monopoly over India's large market and raw materials such as cotton. India served as both a significant supplier of raw goods to British manufacturers and a large captive market for British manufactured goods.

DEINDUSTRIALIZATION

Number of modern economic historians have blamed the colonial rule for the state of India's economy, with investment in Indian industries limited since it was a colony. Under British rule, India experienced deindustrialization: the decline of India's native manufacturing industries. The economic policies of the British Raj caused a severe decline in the handicrafts and handloom sectors, with reduced demand and dipping employment; the yarn output of the handloom industry, for example, declined from 419 million pounds in 1850 down to 240 million pounds in 1900. Due to the colonial policies of the British, the result was a significant transfer of capital from India to England leading to a massive drain of revenue, rather than any systematic effort at modernisation of the domestic economy.Like so many other sectors of domestic industry, Indian agriculture was decimated by British colonialism. In order to protect and strengthen colonial rule, the British created an artificial class system in the Indian countryside in the hopes that a new class of landlords would act as a reliable political foundation .

ZAMIMDARI SYSTEM

The so-called Zamindars did indeed fulfill this function, but unfortunately, they did nothing for the Indian agricultural economy. The Zamindars systematically squeezed every last penny out of the land they owned, impoverishing the local peasantry and turning them into tenants with no rights, who could thus easily be evicted from the land they had worked for generations.

COMMERCIALISTION OF AGRICULTURE

As farmers were increasingly required to grow cash crops to be exported to Great Britain, much domestic agricultural produce was no longer available for use in the village, which was the foundation of Indian rural life. This had the knock-on effect of making villages less self-reliant and more vulnerable to famine in the wake of natural disasters.

Indian Economy before Independence (Ugc Net)

INFRASTRUTURE

The postive things britishers did was development of infrastructure ie development of Trains, Ports,Roads and  post and telegram development.

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