THE STRUCTURE OF THE INDIAN

ECONOMY:

PRE-INDEPENDENCE & POST-

INDEPENDENCE

ECONOMICS

CHAPTER 3 RD

X I I TH

-- Bhagirath Baria

Source: http://media2.intoday.in/btmt/images/stories/economy505_070412021636.jpg

• Major time-periods

I. Pre-Independence [19th century]

II. Post-Independence [20th century and later]

Today’s topic: Pre-Independence Indian Economy

1. Till 1750 A.D.

2. 1750 A.D. to 1830 A.D.

3. 1830 – 1947

Pre-Independence Indian

Economy

Till 1750 A.D.

- Exports were high

- Domestic production of Industrial Commodities

- Imports were lower than Exports

- Implies that India had a BUDGETARY SURPLUS.

1750 A.D. to 1830 A.D.

- Industrial Revolution in England

- The East India Company already had a strong trade

presence in India back then

- Implies that the effects of I.R. on Indian Economy took

place through 2 ways: 1. The East India Company; 2.

India’s Export-Import relations with England

1830 - 1947

• Effects of Industrial Revolution on Indian Economy

- Positive Effects [T.B.] Pg. 22nd

- Negative Effects [T.B.] Pg. 22nd

• Industrial sector in pre-independence India

- After 1850

- S R C T [Sugar, Rice, Cotton, Tea]

- Jute industrial units with British Capital

- Cotton industrial units with domestic capital

- What are the implications of Foreign capital for a colonial

economy?

- Suppose Bhagirath sir becomes your ruler and you

borrow money from him to start a business, think.

- Iron Production data [pg. 22nd]

- 2 % contribution in employment and 8% in GNP by the

end of World War-II

• Agriculture sector

- Most of the developed nations of today were agro-dominated economies in past

- So was and so is India till date

- Industrial development – 1850 A.D.

- 70 % employment

- 57% or 44% in GNP

- Food grains production: 0.1%

- Population growth- 0.67%

- Difference: O.1% – 0.67% = -0.57% points, Food deficit?

- Thus large amount of Food import

- Per hectare productivity remained low, What does it mean?

• Railway sector in pre-Independence India

- Large scale development by Britishers

- For their own political and economic interest

- First Railway in 1853, between Thane and Mumbai

- Transportaion costs reduced

- International trade increased

- Internal trade increased

- Agriculture and Industries were benefited

- Employment

- Link all the benefits above

• Road Transport sector in pre-Independence India

- Expanded just like Railways did

- Britishers did so primarily

- Why?

- 1855 P.W.D. started

- 2.5 lakh KM to 4.5 lakh K.M. [approx.] by 1943

- 32%- surfaced roads

- 68% unsurfaced roads

• Banking sector in Pre-independence India

- 1770 A.D.

- Bank failures in the beginning were common in India

- 1946- 700 banks, both Indian and Foreign

- Mostly in big cities, why?

- Banks that were established were- S.B.I., R.B.I., P.N.B.,

BoI, C.B.I., etc. [pg. 24th]

• Low/insignificant Human Development

1. Health and Hygiene facilities were poor

2. Literacy rate was very low

What implications this has for Indian Economy?

Developing Underdeveloped

Conclusion

2 points emerge which kept Indian economy a developing

Economy, despite the previously stated developments:

Underdevelopment

Low non-agro rowth

Low PCI

Source: http://www.business-in-asia.com/asia/images/india_gdp.jpg

Source:

http://www.eurobrandsindia.com/blog/wp-content/uploads/2011/03/gdp-india.png?w=600

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