Indian Economy at the time of independence

At the end of British period some notable economic features were as follows:

[1] Decline of handicrafts industry

[2] Production of cash crops

[3] Famines and food shortage

[4] Rise of intermediaries in agriculture


[1] Decline of Handicraft Industry

Before the British came to India, Emperors and kings were ruling this land.

They promoted the interest of local artisans, carpenters, artists, weavers etc. who were very good at making beautiful paintings, decorating walls, designing textiles and jewelry, tailoring, making furniture, toys and idols of stones and metals etc.

But when the British came they defeated the Kings and took over their kingdoms.

In the latter half 19th century England was experiencing changes in production technology.

Machine was replacing human labour to produce goods.

The British could bring their machine made textiles and sell in India at a cheaper price and also in large quantities.

The British government also made policies to help the British producers only.

So, Indian handicraft suffered.


[2] Production of Cash Crops

As said above, England was undergoing change in terms of industrialization so factories there were in need of raw materials to produce goods.

In order to make textiles raw cotton was needed. Similarly indigo was in high demand to make prints on textiles.

Also jute, sugarcane, ground nuts were all in great demand in England as they were all needed in factories there.

Since these were all cultivated in India, the British offered money to poor farmers of India to raise these crops so that they could send them to England.

Since these crops are used in factories as raw materials to produce goods, they are called cash crops.

Attracted by money, Indian farmers grew these cash crops for the British who supplied them to factories in England.

The factory made goods were sent for sale in the Indian market.

Now the British sold these goods to Indian people and made profit.


[3] Famines and Shortage of Food

The worst part of British rule in India had been the frequent occurrences of famines.

Famine occurred nearly 33 times during whole British period.

The most devastating famine was the Bengal famine of 1943, just four years before independence.

More than 1.5 million people died at this time due to lack of food.

Some reasons for occurrence of famines were as follows:

(1) Bad rainfall upsetting food grain production since irrigation facilities were not available. Agriculture was dependent on rainfall.

(2) British government kept on exporting food grains to its native country England and elsewhere even if there was local need for these things.

It also used food grains to feed its soldiers who were fighting wars in different parts of the world.

The British had not only captured India, but also many other countries of the world.

So they were sending food from India to these countries where their soldiers were fighting to capture territories.

(3) Poor people had not enough money to purchase food grains from the market.

(4) As said above, Indian farmers were encouraged to produce cash crops on their fields.

This led to fall in production of food grains because less area was available for their cultivation.


[4] Intermediaries in Agriculture

Agriculture was major occupation of people of India during British rule.

More than 70 percent of the population was dependent on agriculture.

So it was the major source of revenue for the government.

The British introduced two types of land revenue, such as:

(1) Permanent settlement under which land revenue to be collected was permanently fixed.

(2) Temporary settlement under which land revenue was changed after 25-30 years of time.

In order to collect revenue the British appointed Zamindars in eastern part of India, Mahalwari in western part and Ryotwari in south India.

These persons were called intermediaries because they used to act between British Government and common people.

Their job was to collect revenue in the form of rent, tax etc from the villagers, farmers and other households and submit that revenue with the government.

The Zamindars, Mahalwaris and Ryotwaris became mini rulers in their respective areas.

They used force to take away belongings of persons who failed to give revenue.

This way these intermediaries became rich and powerful at the cost of common man and with the blessings of British government.