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



        Delhi is a testament to the high level of metallurgy that existed in India.               Notes
        The Indian industries “not only supplied all local wants but also enabled India to export its finished
        products to foreign countries.”Thus, Indian exports consisted chiefly of manufactures like cotton
        and silk fabrics, calicos, artistic wares, silk and woollen cloth. Besides, there were other articles of
        commerce like pepper, cinnamon, opium, indigo, etc. In this way, Europe was a customer of Indian
        manufactures during the 17th and 18th centuries. It was this superior industrial status of India in the
        pre-British period that prompted the Industrial Commission (1918) to record :
        “At a time when the West of Europe, the birth place of modern industrial system, was inhabited by uncivilised
        tribes, India was famous for the wealth of her rulers and for high artistic skill of her craftsmen. And even at a much
        later period, when the merchant adventurers from the West made their first appearance in India, the industrial
        development of this country was, at any rate, not inferior to that of the more advanced European nations.”
        1.3 Commercialisation of Agriculture (1850-1947)


        Another noteworthy change in Indian agriculture was its commercialisation that spread between
        1850-1947. Commercialisation of agriculture implies production of crops for sale rather than for family
        consumption. At every stage of the economic history of the nation, a part of the agricultural output is
        produced for the market. Then, what distinguished commercial agriculture from normal sales of
        marketable surplus ? It was a deliberate policy worked up under pressure from British industries. By
        the middle of the nineteenth century. Industrial Revolution had been completed in England. There
        was a tremendous demand for raw materials, especially cotton, jute, sugarcane, groundnuts for the
        British industries. By offering a higher bait of market price, the peasants were induced to substitute
        commercial crops for the food crops as the former were more paying than the latter. Consequently,
        the peasants shifted to industrial crops and in some districts, the movement for commercial agriculture
        became so strong that the peasants started buying foodstuffs from the mandis for their domestic
        needs. This led to a fall in the production of food and, consequently this period is marked by the
        occurrence of most terrible famines in the economic history of India. Commercial agriculture was
        also, to some extent, the result of the mounting demands of the land revenue by the state and excessive
        rents by the landlords from the peasantry.
        The process of commercial agriculture necessitated by the Industria Revolution was intensified by
        the development of an elaborate network of railway in India after 1850. Railways linked the interior
        of the country with ports and harbours, urban marketing centres and thus Indian agriculture began
        to produce for world markets. Large quantities of wheal from Punjab, jute from Bengal and cotton
        from Bombay poured in for export to England. The same railways which carried commercial crops
        from the various parts of the country, brought back the foreign machine-made manufactures to India.
        Thus, railways and link-roads connecting the hinter-land of country with commercial and trading
        centres were instrumental in intensifying commercial agriculture on the one hand and sharpening
        competition of machine-made goods with Indian handicrafts, on the other. These factors led to the
        ruin of Indian industries.
        1.4 Famines and Famine Relief in India

        The new land system and commercialisation of Indian agriculture produced very adverse economic
        consequences on the Indian economy. These influences retarded, nay halted, the process of
        industrialisation the Indian economy, created “built-in depressors” in agriculture and were responsible
        for the occurrence of famines in India.
        The Nature of Famines in India

        Before the advent of modern means of transport, especially railways, the famines in India were localised
        scarcities of food in those regions where the crops had shrunk on account of bad rains. Both the
        construction of railways and the growth of trade after 1860 brought about a radical change in the
        nature of famines. Previously a famine meant extreme hunger and the population had to undergo
        suffering on account of lack of food because there were no means of transporting the surplus foodgrain
        even if it was available in other parts of the country. The position after 1860 was that the rapid means



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