Indian Economy on the Eve of Independence

Questions:

1. What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?

Ans: The economic policies developed by the British government in India were aimed at merely making India a supplier to Britain’s growing industries. The policies were targeted towards the development of Britain and boosting its economic status. India and its growth were completely ignored. Due to such policies, India became a supplier of raw materials and a market for finished goods from Britain. The impact of such a policy in India is as follows:

1. The Indian economy witnessed very low economic growth. Studies reveal that the economy was growing at a speed of two per cent during the period 1900-1950. The British government was more interested in maintaining and developing the economy of Britain. British rule ruined the agriculture sector and handicrafts and transformed India into a supplier of raw materials.

2. The Indian agriculture system was not developed before independence, it followed old techniques, and it was majorly affected by colonial rule when the farmers were instructed to grow commercial crops instead of food grains. These commercial crops, like cotton and indigo, were used in industries in Britain for manufacturing textiles. The peasants did not get any monetary benefit from growing these crops, and hence no economic development happened.

3. The British programmed systematic deindustrialization leading to the downfall of the handicraft industry, and with the lack of investment, other industries also failed to develop. Imposing heavy export tariffs on Indian-made goods led to a decrease in demand in the international market, ultimately leading to the collapse of the handicraft industry.

4. The money that Indian goods earned from foreign trade were not invested in the Indian economy; it was used for managing the British army and expanding their colonial reach across Asia.