Page 7 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Unit 1: Characteristics of Indian Economy on the Eve of Independence
Dilfraz Singh, Lovely Professional University

Unit 1: Characteristics of Indian Economy on the Notes
Eve of Independence

CONTENTS
Objective
Introduction
1.1 Characteristics of Indian Economy
1.2 Industries and Handicrafts in Pre-British India
1.3 Commercialisation of Agriculture (1850-1947)
1.4 Famines and Famine Relief in India
1.5 Process of Industrial Transition in India
1.6 Colonial Exploitation: Forms and Consequences
1.7 Colonialism and Modernization
1.8 Summary
1.9 Key-Words
1.10 Review Questions
1.11 Further Readings

Objectives

After reading this Unit students will be able to:
• Explain the characteristics of Indian Economy on the Eve of Independence.
• Discuss Commercialisation of Agriculture.
• Assess the process of Industrial Transition in India.
Introduction

A close look at the economic development of India during the British period reveals that whenever
India’s colonial economic links in terms of foreign trade and inflow of foreign capital were disrupted,
Indian economy made strides in industrial development. During the 20th century, the colonial
economic links were interrupted thrice : first, during the First World War (1914-18) and second, at the
time of the Great Depression (1929-34) and third during the Second World War (1939-45). In other
words, free flow of foreign trade and capital meant economic stagnation in India, while their absence
(partial or total) provided an opportunity for Indian capital to open up avenues of industrial growth
in areas choked off by imports.
1.1 Characteristics of Indian Economy

The Indian economy in the pre-British period consisted of isolated and self-sustaining villages on the
one hand, and towns, which were the seats of administration, pilgrimage, commerce and handicrafts,
on the other. Means of transport and communication were highly underdeveloped and so the size of
the market was very small. To understand pre-British India, it is essential to study the structure of the
village community, the character of towns, the character of internal and foreign trade, the state of the
means of transport and communications.
(a) The structure and organisation of villages
The village community was based on a simple division of labour. The farmers cultivated the
soil and tended cattle. Similarly, there existed classes of people called weavers, goldsmiths,

LOVELY PROFESSIONAL UNIVERSITY 1