NCERT Solutions for Class 11 Economics Chapter 1 Indian Economy on the Eve of Independence

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 main aim of the economic policies adopted by the colonial government was to make India just a supplier to Britain’s flourishing industries. The policies were made to benefit and strengthen their own country. They completely ignored the interests of the Indian economy. These discriminatory policies made the Indian economy a supplier to British economy and consumer of finished goods of British economy. The effects of these policies are given below:

1. Low Economic Development

During British rule, there was a very little economic development. This was because the British government was more focused on the promotion of their own economic interest. Consequently, the colonial rule converted India's agriculture sector into a supplier of raw materials for the British industrial base. This affected the production of the agricultural sector of India. It also destroyed the small manufacturing industries such as handicrafts and cotton industries. These manufacturing units suffered a cut throat competition from the British machine made textiles and handlooms.

2. Backwardness of Indian Agriculture

India was basically an agricultural economy employing almost of its population in the colonial rule. There was a meagre growth in agriculture sector. It was caused by the presence of various land settlement systems, particularly the Zamindari system. In this system, the zamindars (landowners) had to pay very high revenue (lagaan) to the British government, which they collected from the peasants (landless labourers). The zamindars were focused on extracting high revenues from the peasants but never took any interest in the improvement of the productivity of the land using cheap raw materials. As a result, Indian peasants grew cash crops (e.g., indigo and cotton) in order to feed British industries at the expense of food crops instead of food crops (such as, rice and wheat). This commercialisation of agriculture increased the burden of high revenues on the poor peasants. It also led Indians face shortage of food grains. Hence, Indian agriculture remained backward and primitive.

3. Deindustrialisation of Indian Economy

India, during colonial era, was not able to develop a sound and strong industries. The term 'systematic` deindustrialisation' can be used to define the status of industrial sector during the colonial rule. The downfall of India's handicraft industry led to deindustrialisation and the cause of meager growth of modern industry was the lack of investment. Indian handicraft products were taxed heavily by the British government, which permitted free exports to Britain of raw materials and free imports of British products from India. Because of these, the Indian exports became dearer and its demand in the international market fell miserably that led to the decline of Indian handicrafts industries. Simultaneously, the demand for the Indian products fell in the domestic markets as machine made textiles were cheaper than Indian handicrafts. Hence, the domestic industries lacked investment and growth initiatives.

4. Regression in Foreign Trade

In the colonial era, the British government had the monopoly over India's foreign trade. According to the British government, the trade policies were based on the government's interests. Until the end of the 19th century, exports and imports were restricted to India and Britain. India's exports provided cheap raw materials for the British industries, and Britain's imports from India provided a untouched market for British goods. In every way, British industries were benefitted. The surplus money generated from the foreign trade was not even invested in the Indian economy. It was used for administrative and war activities by Britain.

2. Name some notable economists who estimated India's per capita income during the colonial period.

Ans: The British government was never interested in upliftment of people of our country. They didn’t take any initiative to measure India's national and per capita income. There were some attempts by economists of that time to estimate India's per capita income and national income during the colonial rule, but the figures were contradictory. The following are the names of some of the notable economists who were engaged in estimation of national income and per capita income:

a. Dadabhai Naroji

b. William Digbay

c. Findlay Shirras

d. V.K.R.V Rao

e. R.C. Desai

As part of the development process, an essential measurement during the colonial period was made by V.K.R.V Rao. According to these studies, the Indian economy had an average annual growth rate of half a percent in the period 1900-50.

3. What were the main causes of India's agricultural stagnation during the colonial period?

Ans: Indian economy during the colonial era remained basically agrarian. About 85 percent of the population who were living mostly in villages derived their livelihood directly or indirectly from agriculture. A very low growth rate was recorded in the agriculture sector. The reasons that explain why there was stagnancy in Indian agriculture sector during the colonial rule are:

1. Introduction of Land Revenue System

India was basically an agricultural economy employing almost of its population in the colonial rule. There was a meagre growth in agriculture sector. This was due to the presence of various systems of Land Settlement, particularly Zamindari system. The zamindars (owners of land) needed to pay very high revenue (lagaan) to the British government, which they collected from the peasants (landless labourers). The zamindars focused on receiving high revenues from the poor landless labourers but never took any interest in the improvement of the productivity of the land with cheap raw materials. This resulted in low agricultural productivity and also degraded the peasants economically.

2. Forceful Commercialisation

Before the colonial era, the farmers used to practise conventional subsistence method of farming. They used to grow food crops like rice and wheat for own consumption. Then, in order to provide British industries with cheap raw materials, the Indian farmers were forced to growcommercial crops (like indigo required by British industries to dye textiles) instead of food crops .The result was the commercialization of Indian agriculture. As a result of this commercialization of Indian agriculture, the poor farmers were not only burdened by high investment costs, but they also faced a shortage of food grains, resources, and technology. Therefore, Indian agriculture remained backward and primitive.

3. Facilities and resources were lacking for irrigation

The Indian agricultural market also encountered shortages of irrigation facilities, inadequate fertilizer use, little investment, and occasional famines and natural disasters, etc. that further exaggerated the agricultural performance and made it more vulnerable.

4. Name some modern industries which were in operation in our country at the time of independence.

Ans: In the mid-19th century, modern industries began emerging. At theinitial stage, development was confined to setting up of cotton and jute textile mills. Cotton textile mills were located in Maharashtra and Gujarat in the western part of the country, mainly controlled by Indians, while jute industries were majority British controlled and concentrated in Bengal. Iron and steel industries began to emerge gradually at the beginning of the 20th century. In 1907, India's Tata Iron and Steel Company (TISCO) was formed. In the British era, small businesses also operated in the sugar, cement, and paper industries.

5. What was the two-fold motive behind the systematic deindustrialisation affected by the British in pre - independent India?

Ans: There are two major factors contributing to systematic deindustrialisation affected by theBritish:

1. Making India a source of raw materials: The main purpose of the British government was to make India a source of inexpensive raw materials so that its own industrial base could flourish.

2. Use of India as a market to export finished goods: Another objective of the British government was to export British manufactured goods to Indian markets.

6. The traditional handicrafts industries were ruined under the British rule. Do you agree with this view? Give reasons in support of your answer.

Ans: Yes, we agree that the traditional handicrafts industries under British rule were destroyed. The above sentence can be proved by the following points.

1. Discrimination in Tariffs: India's industrialization correlated with the British rule. The British used India as both a source of cheap raw materials as well as an easy market to sell their finished products. Consequently, they imposed high tariffs (export duties) on India's handicraft exports, while allowing free exports of India's raw materials to Britain and free imports of British goods into India. As a result, Indian exports became more expensive. Handicrafts industries collapsed when the international demand for handicrafts collapsed drastically.

2. Competition from British manufactured products: Handicrafts products also suffered a downward trend on the domestic market. This was due to tough competition from the machine made textiles that were manufactured by Britain. It was due to the fact that Britain's mechanically produced goods were comparatively less expensive and of better quality than Indian handicrafts. Indian industries were thus confined to a smaller market.

3. An emerging class in India: The British rulers popularized western lifestyles in the country. There was an emergence of a new class of zamindars (majority of who liked British goods) in India. Spending extravagantly on British products provided an impetus for the development of British industries at the cost of destruction of Indian industries. Eventually, Indian industries were extinguished.

4. Abolition of the princely state: Prior to the arrival of the British, India was ruled by princely states. As a result, Indian handicrafts gained reputation on the international market due to their patronage of handicraft industries. As a result, their handicrafts industries were destroyed under the British rule. Hence, Indian handicrafts started to lose its reputation and its importance also got deteriorated.

7. What objectives did the British intend to achieve through their policies of infrastructure development in India?

Ans: Under the British rule, infrastructure development in the country was significant. The British, however, had no other motive than colonial interests in mind when they were developing the infrastructure. Transportation and communication infrastructures were developed. In addition to roads, ports were also constructed for the ease and fast transportation of goods to and from Britain, as well as to facilitate transport of raw materials. Similarly, railways were introduced and developed to transport finished goods from British industries to India's interior. Railways facilitated the expansion of the market for British industries. British administration was made more efficient and effective by post and telegraph. Therefore, infrastructural development was not aimed at the growth and development of the Indian economy, but at serving its own interests. British rulers developed infrastructure in India to have effective control and administration of Indian Territory, to make money through foreign trade, to take advantage of profitable investment and to mobilise the Indian army.

8. Critically appraise some of the shortfalls of the industrial policy pursued by the British colonial administration.

Ans: The goal of Britain's industrial policies in India was to make our country a mere supplier of Britain's own thriving industry. The policies were primarily concerned with strengthening and developing their own country. Under British colonial rule, the industrial policy had the following shortcomings:

1. Neglect of Indian Handicraft Sector: The British adopted a discriminatory tariff policy in which they imposed hefty taxes (export duties) on Indian handicraft goods while permitted free export of Indian raw materials to Britain and free import of British finished products from India. This made Indian exports dearer and its international demand fell dramatically that led to the collapse of handicrafts industries. In addition, Indian handicrafts faced a very harsh competition from machine made textiles manufactured in Britain. The emergence of a new section of people who liked the British goods more rather than domestic goods boosted British industries at the cost of destruction of Indian industries. This led to the decline in demand for Indian products and encouraged foreign products.

2. A lack of foreign direct investment in Indian industries: Indian investors lacked the capital necessary to modernize their industries. On the other hand, British government was not interested and never bothered in investing in Indian industries. British government mainly focused on establishing cotton, jute and coal industries that would benefit their interest. Consequently, due to insufficient investments in the other sectors, Indianindustries was acutely constrained.

3. Limited operation of the public sector: Public industries were restricted to railways, power generation, post, ports and some other departmental undertakings.

9. What do you understand by the drain of Indian wealth during the colonial period?

Ans:  The nineteenth century was the century of Dadabhai Naroji's 'Drain of Wealth'. Resources from the native peoples were exploited during the colonial era. As a means of sustaining its industrial base in Britain, Britain needed a source of cheap raw materials to conquer India. Moreover, the British government used Indian manpower to spread its colonial influence outside of India. As a result, the British drained Indian wealth to further their own interests.

10. Which is regarded as the defining year to mark the demographic transition from its first to the second decisive stage?

Ans: It is considered the defining year or the 'Year of Great Divide' because prior to 1921, India's population growth was erratic. India was in the first phase of demographic transition till 1921 that was characterised by high birth rate and high death rate.The period before 1921 was characterized by low survival rates (or low life expectancy), which were nearly 8 per thousand annually. Therefore, the rate of population growth was stagnant. After 1921, population of Indian growth never declined and showed a consistent increment.

11. Give a quantitative appraisal of India's demographic profile during the colonial period.

Ans: During the British rule, India's demographic conditions depict our economy as stagnant and backward. There was a high birth rate of 48 per thousand and a high death rate of 40 per thousand. Population growth was stagnant due to high birth and death rates. A very high infant mortality rate of 218 per thousand was also recorded. Approximately 32 years ago, the life expectancy rate was 32, and since then it has increased to 63.5 years. Literacy rates were below 16 percent, which indicates social backwardness and gender discrimination in the economy. According to the above figures, we can infer that India had a low standard of living, a low standard of living and a low rate of survival. India's demographic situation was primarily caused by a lack of health care facilities and a lack of health awareness. The Indian’s standard of living was so lowthat people were not getting basic amenities like food, clothes and shelter. Moreover, some parts of India came under severe famine conditions. The famines were so severe that millions died.

12. Highlight the salient features of India's pre-independence occupational structure.

Ans: During the British rule, there was no variation in the distribution of working population between different occupations. The following are the salientfeatures of India's pre-independence occupational structure:

1. Agri business- The India's major industry: During colonial rule, almost 85% of India's workforce was employed in agriculture. Indians were immersed in extreme poverty during the colonial era, so a lot of them worked in agriculture as a means of subsistence. In contrast, the agriculture sector lacked investment and, thereby, its growth was highly constrained. Thus, in other words, despiteemploying a significant proportion of the population, the growth of agriculture sector wasmeager.

2. Industry- The Dark Side: The manufacturing sector employed a very small share of the population when compared with agriculture. Manufacturing and industry accounted for almost ten percent of all employment. Indian industries suffered from stiff competition from machine-made cheap goods imported from Britain. Moreover, a lack of investment, initiatives, and an unfavourable tariff structure restricted the industrial sector. Therefore, the industrial sector of India did not make a significant contribution to its GDP.

3. An unbalanced growth pattern: The three sectors of the Indian economy, namely agriculture, industry, and tertiary education, were unequally developed. While the agricultural sector was relativelydeveloped, whereas, the other two sectors were at their infant stage. In addition, there wasregional variation in the occupational structure of India. While on the one hand, states likeTamil Nadu, Andhra Pradesh and Bombay experienced a fall in the agricultural work force onthe other hand states like Orissa, Rajasthan and Punjab experienced a rise in the agricultural work force.

13. Underscore some of the India's most crucial economic challenges at the time of independence.

Ans: Indian economy suffered badly from British colonial rule's exploitative policy. India's economy faced severe challenges when it gained independence as a result.

Indian economy has faced some tough economic challenges including:

1. A Low Level of Agriculture Productivity: The British used the agricultural sector of India during colonial rule to serve their own interests. Due to these factors, the Indian agricultural sector experienced stagnation, low productivity, a lack of investment, and poor conditions for landless farmers and peasants. India's immediate concern was to improve the country's agricultural sector and 

Indian farmers are concerned about improving their agricultural productivity. Prior to independence, land reforms were needed, rural peasants had to be empowered, and land ownership disparities had to be reduced.

2. India's infant industrial sector: During colonial rule, India failed to develop a sound industrial base. In order for India to develop its industrial sector, the country required huge investment, infrastructure, human skill, know-how, and modern technology to develop its industrial sector. Additionally, India's domestic industries were unable to compete with the British industry because of stiff competition. To develop India's industrial sector, the main concern was to develop small and large-scale industries simultaneously. The challenge of boosting India's industrial sector to India's GDP is another important economic challenge.

3. Lack in Infrastructure: However, despite the significant improvements in infrastructure, the agricultural and industrial sectors did not improve sufficiently. In addition, it was necessary to enhance the efficiency and effectiveness of the existing infrastructure.

4. Inequality and Poverty: India was stuck in an imbalance between poverty and inequality. Britain drained a substantial amount of India's wealth during colonial rule. As a result, India's majority population was in poverty. The result was a further escalation of economic inequality in the country.

14. When was India's first official census operation undertaken?

Ans:  In 1881, India conducted its first official census. From then on, every 10 years a census has been conducted. A complete demographic profile of the country is provided alongside the detailed estimation of population size.

15. Indicate the volume and direction of trade at the time of independence.

Ans:  India's export of handicraft products was issued heavy tariffs (export duties) during the British colonial rule, while raw materials and British products were freely exported from the country to Britain. India's international demand plunged as a result, which made exports more expensive. During the colonial rule of India, India's export basket mainly consisted of primary products such as sugar, jute, and silk, while its imported basket included finished consumer goods such as cotton. Over half of India's trade was restricted to Britain due to the monopoly that India held over its exports and imports. The remainder of India's imports were directed towards China, Persia, and Sri Lanka. After the Suez Canal was opened, British monopoly over India's foreign trade was further enhanced. This resulted in the rapid movement of goods from India to Britain and vice versa. Foreign trade surpluses generated by India were not invested in the Indian economy, but were used for administration and war. India's wealth was drained to Britain as a result.

16. Were there any positive contributions made by the British in India? Discuss.

Ans:  Yes, the Britishers though exploited India very much but made various positive contributions. The contributions were not intentional but were purely the byproducts of colonial exploitation of the British. The British have made the following positive contributions:

1. Introducing the railways: It was British railways that provided a breakthrough in the economic development of India It opened up the cultural and geographicalbarriers and facilitated commercialisation of Indian agriculture.

2. A brief introduction to commercial agriculture: Commercial agriculture introduced in India is an important step forward in its history. Subsistence agriculture was the norm in India prior to the British era. However, with the commercialisation of agriculture, the agricultural production was carried out as per the market requirements. The development of this factor has allowed India to attain self-sufficiency in grain production today.

3. Introduction of Free Trade to India: During the colonial period, the British forced India to comply with free trade. Globalisation today revolves around this concept. Domestic industry was given a competitive platform to compete with British industries through the free trade agreement. India's export volume increased rapidly after free trade was introduced.

4. Developing Infrastructure: The British developed infrastructure in India which proved beneficial in preventing famines. The telegram and postal services provided services to Indians.

5. The western culture was promoted: Introducing English as the language of education gave birth to a westernized form of education. The English language provided a window to the rest of the world. As a result, India is now integrated into the global economy.

Topics Covered in Economics Class 11 Chapter 1 Indian Economy on the Eve of Independence

Benefits of Referring to Class 11th Economics Chapter 1 Question Answer

• Class 11 Commerce Economics Chapter 1 Answers explains about the historical economic conditions of India, that makes students understand the roots of current economic policies and challenges.

• By learning the underdeveloped industrial sector of pre-independent India in Chapter 1 Economics Class 11 helps students recognize the significance of industrial growth in nation-building.

• With demographic issues such as high population growth and low life expectancy, students can better appreciate current health and population policies.

• Realising the challenges faced at independence helps students understand why economic planning was necessary and the importance of strategic planning in economic development.

• Linking historical economic conditions with current scenarios helps students make informed comparisons and understand the continuity and changes in economic policies and practices.

• By studying 11th Commerce Economics Chapter 1 Exercise on British economic policies and their impact on India, students critically evaluate economic policies and their long-term effects on society.

Important Study Material Links for Class 11 Economics Chapter 1

Conclusion

NCERT Solutions for Class 11 Economics Chapter 1  Indian Economy on the Eve of Independence provides a detailed look into the economic conditions of India just before independence. It is important for students to focus on understanding the challenges faced by the agricultural and industrial sectors, the impact of British economic policies, and the overall socio-economic conditions. By understanding the Economics Class 11 Chapter 1 Questions and Answers PDF, students can appreciate the historical context of India's economic development and the reasons behind the need for planned economic growth post-independence. In previous years' question papers, around 4–5 questions have been asked from this chapter, including the conditions of agriculture, the impact of colonial policies, and the significance of the economic drain.

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