India before British rule was economically stable, self-sufficient and prosperous. Colonisation aimed at profiting from cheap labour and surplus raw materials easily accessible in India. The country known as the golden eagle was rich in handicraft skills in areas like silk, metal, cotton, etc.
The colonial period in India saw significant changes in the aggregate output, which was less than 2% in the first half of the 20th century. This figure coupled with ½ % growth in per capita output yearly showing the major exploitation India suffered.
The British Government never bothered to estimate India’s per capita and national income. Yet individuals like Dadabhai Naoroji, Findlay Shirras, R.C. Desai, William Digby and V.K.R.V. Rao tried figuring out India’s economic strength.
In the following segment, students will learn about the changes in the six factors of Indian economy. This will further help in strengthening the all-round growth of young learners in the field of economics.
Sectors Which Were Affected During the British Rule
India before British rule flourished with wealth, agricultural and resources which were incurred by the British Government to manage their administrative expenses and wars. British transformed India into a supplier of raw materials and finished goods for cheap for 200 years. The sectors which suffered a massive blow in terms of the economy are explained below.
1. Agriculture Sector During Colonial Rule in India
Indian economy before British rule was primarily based on agriculture and trade based on it. Nearly 85% of the country's population was depended on the output from agriculture directly or indirectly. Yet this sector started facing stagnation and deterioration as the production per hector was deficient.
Again the vulnerability to climates like unpredictable rainfall or low rainfall caused the output to lower down further. British Government did not attempt to help the poor in the revival of the economy or irrigation facilities.
Furthermore, the land revenue system, Lagaan system and commercialisation of agriculture pushed the agriculture sector to deteriorate.
2. Industrial Sector During the British Colonisation of India
India before British rule was prosperous in the handicraft sector, textile, production of metal and precious stone works, etc. These finished goods had a demand in the foreign market due to their fine quality and high craftsmanship. However, British infiltrated the Industrial sector with the introduction of systematic de-industrialisation. This reduced India into an exporter of raw materials and importer of finished goods as colonisers focused on promoting British market.
3. Foreign Trade During Colonisation of India
India was known to trade quality raw materials and finished goods since ancient times. However, with the restrictive policies by the British Government like tariffs affected the foreign trade. This caused a downfall in composition, structure, production and volume of export. Reasons like the generation of large surplus, monopoly control and reduction of India’s handicraft value caused this tension.
4. Demographic Conditions British Policies in India
Demographic conditions during colonisation exhibited features of stagnation and backwardness in terms of economy. The birth rate and death rate as per data showed a major increase of nearly 40% and 48% per thousand respectively.
5. Occupational Conditions During the Advent of the British in India
India before British rule and after depended on agriculture which caused an issue of land availability. This caused a barrier in the economy as a majority focused on farming as a means of survival rather than an occupation for income.
6. Infrastructure During Colonisation
To understand what the colonial period was, students need to understand the condition of infrastructure in India. Under colonisation, basic amenities like railways, roads, telegram developed gradually. However, the motive behind this change was to promote British goods and exploit the Indian labour.
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