ECONOMY NOTES FOR UPSC-I

ECONOMY FOR UPSC PRE-INDEPENDENCE

 The Economy For Upsc is one of the core subjects of UPSC preparation. India before independence was primarily agrarian and characterized by colonial rule under the British Empire. Here are some key details about the economy during that period.

1. Agriculture: The Indian economy heavily relied on agriculture, with the majority of the population engaged in farming. The British implemented various policies that focused on cash crops like indigo, jute, cotton, and opium, which were exported to Britain. This led to the neglect of food crops and caused famines in many parts of the country.
2. Land Ownership: The British introduced the Zamindari system, where a few landlords (zamindars) were given control of large landholdings. This system led to exploitation and high land revenue demands from the peasants, resulting in widespread poverty and indebtedness.
3. Industrialization: India's industrial development was limited under British rule. The British discouraged indigenous industries' growth to protect their manufacturing sector. They imposed high tariffs on Indian goods, leading to deindustrialization and declining traditional industries like textiles.
4. Trade: India's business was largely controlled by the British, who exploited India's resources for their benefit. The British East India Company had a monopoly over trade and established trading posts and factories across the country. They exported raw materials from India and imported finished goods, resulting in a trade imbalance.
5. Infrastructure: The British invested in the development of transportation infrastructure, primarily for their own benefit. They built railways, telegraph lines, and ports, mainly to facilitate the movement of goods and resources to and from Britain. However, the infrastructure was primarily designed to serve British interests rather than promote overall economic development in India.
6. Currency and Finance: The British introduced the British Indian currency, with the rupee as the official unit. The currency system was under the control of the British government and the Reserve Bank of India (established in 1935). The financial system was geared towards serving British interests, with limited access to credit for Indian entrepreneurs.
7. Poverty and Famines: The exploitative economic policies of the British, along with natural calamities, resulted in widespread poverty and recurring famines in India. Large sections of the population faced severe deprivation and food shortages.
8. Economic Nationalism: Towards the end of colonial rule, India witnessed a growing movement for economic nationalism. Leaders like Mahatma Gandhi advocated for self-sufficiency and the promotion of indigenous industries to challenge British dominance. The Swadeshi movement encouraged the use of Indian-made goods and boycotting British goods.