Economy and State in the Imperial Context | CUET PG Economics | Notes

Introduction

Before India became independent in 1947, the British ruled for two centuries. The prime objective of British economic policy was to turn India into a feeder economy for the expansion of the United Kingdom’s modern industrial base. India had a strong economy focused on agriculture and handicrafts before independence. The exceptional quality of field handiwork on textiles and precious stones led to a global market for Indian items

• Prior to British rule, India had a self-contained economy.
• India was known for its handicraft industry in cotton and silk textiles, metal and precious stone production, and other sectors.
• The goal of the British colonial administration in India was to convert the country to a feeder economy for the fast-increasing modern industrial base of the United Kingdom.
• British economic policies are more focused on safeguarding and promoting Britain’s economic interests than on the development of India’s economy.
• A significant shift in the Indian economy: India became a net supplier of raw materials and a net consumer of completed industrial products from the United Kingdom.
• The colonial government never attempted to assess India’s national and per capita income.
• Dadabhai Naoroji (Poverty and Un-British Rule in India), William Digby, Findlay Shirras, V.K.R.V. Rao (considered very significant), and R.C. Desai were among the notable estimators.

Agriculture Sector

• Agrarian Economy – The Indian economy was mainly agrarian under British rule. About 85% of the country’s people lived in villages and relied on agriculture for their living, either directly or indirectly.
• Stagnated agriculture sector: due to overcrowding with maximum population participation, resulting in extremely low agricultural productivity in absolute terms.
• However, due to the expansion of the total area under cultivation, the sector saw modest development.
• Poor investment in agriculture: In terms of land settlement arrangements, the profits from the agriculture sector flowed to the zamindars rather than the cultivators, with no zamindars beginning efforts to develop agriculture.
• Agriculture in India lacked investment in terracing, flood control, drainage, and soil desalination.
• Agricultural inputs are in short supply: Low levels of technology, a lack of irrigation systems, and a lack of fertilizer application resulted in poor agricultural output and efficiency.
• Agriculture’s commercialization: could scarcely help farmers improve their economic situation because they were growing cash crops that would be used by British companies back home.
• Post-independence division: A significant chunk of the undivided country’s well-irrigated and fertile land moved to Pakistan, reducing India’s agricultural output, particularly in the jute industry (the whole of the area went away to East Pakistan)