Here, you will find summaries, questions, answers, textbook solutions, pdf, extras etc., of (Nagaland Board) NBSE Class 12 (Arts/Commerce) Economics Part II Chapter 1: Indian Economy on the Eve of Independence. These solutions, however, should be only treated as references and can be modified/changed.
Introduction
The Indian economy, prior to British rule, was a prosperous and self-sufficient entity with a thriving agricultural sector and a demand for Indian handicrafts and spices worldwide. However, British rule transformed this prosperous nation into a colonial, backward, and stagnant economy.
Agriculture, which was once abundant and diverse, suffered from overcrowding and the use of old cultivation methods. The industrial sector was neglected, and the few industries that were set up in the late 19th century were primarily to serve the British interests. The economy had not recorded an increase in its per capita income for a long time, indicating its stagnant and regressive state.
The infrastructure inherited from the British was inadequate. Education and health services were dismal, with only 27 universities and 498 colleges catering to 0.34 million students. Health services were even worse, with only one doctor per 6,430 persons, most of whom were in urban areas. The banking sector was in its infancy, marked by deficiencies such as inadequate coverage, concentration in urban areas, neglect of rural and agricultural credit, private ownership of banks, dominance of foreign exchange business, and lack of term-financing institutions crucial for industrial credit.
The demographic situation was also grim. Illiteracy was as high as 84%, birth rate was high, and the mortality rate, especially the infant mortality rate, was alarmingly high. Poverty was widespread, with the average per capita income being 20 to 30 per annum. Water and airborne diseases were responsible for a large number of deaths. Despite all attempts, the infamous Bengal famine in 1943 proved that India was not free of famines even after the middle half of the twentieth century.
In conclusion, the Indian economy on the eve of independence was a depleted entity, struggling with numerous challenges. The journey since then has been one of transformation and growth, albeit with its own set of challenges and setbacks.
Textual questions and answers
A. Very short-answer questions
1. What is primary sector?
Answer: The primary sector deals with occupations based on natural resources like agriculture, forestry, fishing, mining etc.
2. Under which sector does gas and water supply fall?
Answer: Gas and water supply fall under the secondary sector.
3. What is tertiary sector?
Answer: The tertiary sector refers to services such as transport, communication, health, education etc.
4. What is meant by low productivity in agriculture?
Answer: Low productivity in agriculture refers to low output per unit of agricultural input like land, labour, fertilizers etc.
5. What do you mean by traditional agriculture?
Answer: Traditional agriculture refers to agriculture practices using old and primitive techniques like bullock and plough, lack of irrigation facilities, sowing only one or two crops etc.
6. What was the composition of foreign trade of India on the eve of Independence?
Answer: On the eve of Independence, India’s exports comprised primary goods like raw silk, cotton, jute etc. while imports comprised finished goods like clothes, capital goods etc.
7. What does infrastructure mean?
Answer: Infrastructure refers to capital services like transport, communication, power, health and education facilities etc. that facilitate economic activity.
11. Who gave the HDI?
Answer: The HDI was given by the United Nations Development Programme (UNDP).
B. Short-answer questions-I
1. Which are the three sectors existing in India?
Answer: The three sectors existing in India are the primary sector, the secondary sector, and the tertiary sector. The primary sector includes activities such as agriculture, forestry, fishing, and mining. The secondary sector includes manufacturing industries. The tertiary sector includes services such as transport, trade, banking, insurance, and education.
2. Define per capital income.
Answer: Per capita income is defined as the total income of the country divided by the total population. It is an average measure of the income earned per person in a certain area in a specified year.
3. How is per capital income measured?
Answer: Per capita income is measured by dividing the area’s total income by its total population.
6. Give any two examples of social infrastructure.
Answer: Two examples of social infrastructure are the postal services and the Reserve Bank of India.
7. What are the two main challenges faced by the Indian economy?
Answer: The Indian economy faced the following challenges just after Independence:
- A vicious cycle of poverty: Low income resulted in low levels of saving leading to low productivity and further low level of income. This vicious cycle further perpetuated poverty in the economy.
- Rural economy: Nearly 85 per cent of the population lived in villages and eked out a livelihood from agriculture and related pursuits using traditional and low-productive techniques.
8. “The year 1921 was the year of great divide to the growth of Indian population”. Discuss.
Answer: The year 1921 marked a divide in India’s population growth pattern. Before 1921, both birth and death rates were very high leading to stagnant population growth. After 1921, death rates started declining due to better health facilities while birth rates remained high, resulting in rapid growth of population.
C. Short-answer questions-II
1. Give any four indicators that reveal the under-developed nature of agriculture on the eve of Independence.
Answer: The four indicators that reveal the under-developed nature of agriculture on the eve of Independence were.
- The average size of land holdings was very small (less than 2 hectares) and uneconomically viable.
- Primitive farming methods were in use. The use of modern inputs such as high yielding variety (HYV) seeds, fertilisers, pesticides, farm machinery, etc., was almost negligible.
- There was lack of irrigation facilities. Only 17% of the total cultivated area was irrigated, the rest was dependent on monsoon.
- There was a lack of commercialisation. The farmers were producing for their own consumption rather than for the market.
2. What was the state of Indian industries in the 1940’s?
Answer: The state of Indian industries in the 1940’s were:
- The British took no interest in industrial growth and expansion. British policy for Indian industries was discriminatory as they neglected Indian-owned industries.
- Indian industries were thus neglected and were mostly agro-based, contributing very little to national income and employment.
- The British developed only those industries which would help the imperial economy grow. Indigenous industries such as handicrafts, cottage and small scale industries and our own consumer goods industries were neglected.
5. Write three limitations of HDI.
Answer: The limitations of Human Development Index are:
- HDI gives equal weightage to all the three indexes which is a serious shortcoming of the index.
- It does not consider some important dimensions of development, such as, housing and sanitation quality, level of pollution, crime rates, etc.
- Per capita income does not take into account of income distribution. If income is unevenly distributed, then per capita income will be an inaccurate measure of the monetary well-being of the people.
D. Long-answer questions-I
1. What was colonial rule? Explain the condition of Indian economy during the British rule.
Answer: Colonial rule refers to the control or governance of a nation by another, where the ruling power takes over the resources of the nation for its own benefit.
- Colonial economy: India was just a feeder economy for the growing British imperials. India was supplying raw material for the fast-growing British industries and was also a ready market for the machine-made British goods.
- Backward economy: Owing to the colonial interests, India had few industries, set up in the late 19th century and most of the agriculture relied on primitive and traditional methods of farming. Industries were neglected.
- Stagnant economy: The British had undertaken little or no interest in the development of the economy. Whatever development came by, was because it best served the British interests.
- Lopsided economy: The British developed only those industries which would help the imperial economy grow.
- Depleted economy: When the Britishers left, India owed a large debt. This debt had accumulated because a large expenditure had been incurred in maintaining the army and the administrative staff of the British.
- Dependent economy: At the end of the British rule, the once self- sufficient economy was depending on other countries for everything. This is a typical feature of a dependent economy.
2. How did railways apply a check on the occurrence of families during the colonial period?
Answer: The railways helped in the quick transportation of food grains from surplus to deficit areas. This helped in controlling the prices of food grains and prevented the hoarding of food grains. The railways also helped in the quick movement of troops from one place to another, which helped in maintaining law and order.
Railways facilitated internal movement and contributed immensely to the commercialisation of agriculture. They provided a means of social unification while also proving to be a source of destruction for the economically self-sufficient villages.
3. Write a short note on the condition of foreign trade of India on the eve of Independence.
Answer: On the eve of Independence, the state of foreign trade reflected a typically colonial and a dependent economy. Exports comprised primary goods such as raw silk, cotton, sugar, indigo, jute, etc., as raw materials for the growing British industry. Imports comprised finished goods such as cotton and woollen clothes, capital goods, etc. The trade partner was primarily Britain, especially after the opening of the Suez Canal, and later China, Ceylon (Sri Lanka), Iran too traded with India. The terms of trade were unfavorable to India. Raw materials were exported from India at very low rates and finished products brought into India were subjected to a high tax. India did generate an export surplus which was, however, used for paying for the imports and invisibles such as for administrative services of British officers.
4. Write a short note on the condition of occupational structure in India on the eve of Independence.
Answer: The occupational structure of the Indian economy just after Independence was typically that of an underdeveloped one. Nearly 72 per cent of the workforce was employed in agriculture and only a meagre 11 per cent in industries. There was also much variation in regions when we consider the occupational structure. In regions such as Tamil Nadu, Maharashtra, Andhra Pradesh, Kerala, Karnataka and West Bengal, the dependence on agriculture declined as industries were set up in these regions while in Rajasthan, Orissa, the dependence on agriculture remained high.
7. Explain any four challenges faced by the Indian economy on the eve of Independence
Answer: Explain any four challenges faced by the Indian economy on the eve of Independence
- Vicious cycle of poverty: The Indians had the lowest per capita income and consumption. Low income resulted in low levels of saving leading to low productivity and further low level of income. This vicious cycle further perpetuated poverty in the economy.
- Rural economy: Nearly 85 per cent of the population lived in villages and eked out a livelihood from agriculture and related pursuits using traditional and low productive techniques.
- Unemployment and underemployment: There was a gradual decline of India’s traditional art and handicrafts industry. This along with rapid population growth pressurised land and led to low productivity in agriculture.
- Backward technology: There was deficiency of capital which led to failure to use new technology. Therefore, production techniques remained old and traditional. Productivity was low.
8. Define the indicators of HDI.
Answer: Human Development Index (HDI) is a composite index prepared by the United Nations Development Programme on a scale 0-1 measured on the basis of the following three indicators:
- Longevity: It implies how long a person lives. Alternatively, how long a new-born is expected to live. Shorter longevity implies lesser welfare.
- Knowledge or Educational Attainment: It implies the status of education of the people. It includes Adult Literacy Rate and Gross or Combined Enrolment Ratio (or mean years of schooling).
- Income or Per Capita Real Domestic Product: This implies purchasing power of the people or their capacity to buy goods and services. It is measured in terms of per capita real gross domestic product.
E. Long-answer questions-II
1. “British rule converted Indian economy into a backward, stagnant, lopsided, depleted and dependent economy”. Explain the statement.
Answer: The statement can be explained through the following:
Colonial economy: India was just a feeder economy for the growing British imperials. India was supplying raw material for the fast-growing British industries and was also a ready market for the machine-made British goods.
Backward economy: Owing to the colonial interests, India had few industries, set up in the late 19th century and most of the agriculture relied on primitive and traditional methods of farming. Industries were neglected.
Stagnant economy: The British had undertaken little or no interest in the development of the economy. Whatever development came by, was because it best served the British interests.
Lopsided economy: The British developed only those industries which would help the imperial economy grow. Indigenous industries such as handicrafts, cottage and small scale industries and our own consumer goods industries were neglected.
Depleted economy: When the Britishers left, India owed a large debt. This debt had accumulated because a large expenditure had been incurred in maintaining the army (that helped the British rule and served their interest) and the administrative staff of the British.
Dependent economy: At the end of the British rule, the once self- sufficient economy was depending on other countries for everything—food, raw material for modern industries, machinery and equipment and even administrative know-how, education and health facilities.
2. Briefly describe the condition of agriculture sector on the eve of independence.
Answer: The condition of the agriculture sector on the eve of independence can be described as follow:
- Intermediary System: The non-farming land owners that sprung up between the British state and the tillers of the soil were responsible for the exploitation of the farmers.
- Traditional Agriculture: The bullock and the plough were the only technology in practice at that time. One or at the most two crops were sown on land.
- Lack of Irrigation: Agriculture was entirely dependent on rainfall. In this period there was only a marginal increase in the number of wells, tanks, canals or any other man-made source of irrigation whereas all rulers before this had made considerable efforts to improve irrigation facilities.
- Unemployment and Underemployment: There was considerable unemployment due to lack of growth, On an average, a male agricultural worker could find work for only 190 days in a year. The remaining days went without work and may be food as well.
- Commercialisation of Agriculture: Farmers were producing for sale in the market rather than for own consumption. The shift away from food crops to cash crops drove the farmers further into poverty as the price of cash crops was kept very low in order to maintain a low cost of raw material for the British industry.
- Damage due to Partition of India: The British divided India into India and Pakistan before handing over the control to Indians. This proved to be a setback to India as the rich jute producing areas of Bengal went to East Pakistan (at present Bangladesh) while a large part of the fertile agricultural fields of Punjab went to West Pakistan.
3. Explain in detail the condition of industrial sector.
Answer: On the eve of independence, India had a backward industrial structure. The industrial structure was characterized by:
- Agriculture-based Industries: Cotton, jute, sugar, and vegetable oil industries contributed to 71% of the real output of the industrial sector. This shows that the Indian industrial sector was still in its nascent stage.
- Very Few Modern Industries: Iron and steel industries were the few modern ones that were existing in India. Tata Iron and Steel Company was set up at Jamshedpur in 1907 and others followed suit, especially after the two World Wars.
- Lack of Capital Goods Industries: Capital goods industries are those that produce machinery and equipment which are used for other industries.
- Dominance of Trading and Money Lending Class: The money lending class that flourished during the British rule had the capital to invest in industries. Their typical tendency was to look for quick gains. They overlooked the need for production, quality and design improvement, research, and expansion.
4. Briefly describe the occupational structure of Indian economy on the eve of independence.
Answer: The occupational structure of the Indian economy just after Independence was typically that of an underdeveloped one. Nearly 72 per cent of the workforce was employed in agriculture and only a meagre 11 per cent in industries. There was also much variation in regions when we consider the occupational structure. In regions such as Tamil Nadu, Maharashtra, Andhra Pradesh, Kerala, Karnataka and West Bengal, the dependence on agriculture declined as industries were set up in these regions while in Rajasthan, Orissa, the dependence on agriculture was still high. This occupational structure reflects the extent of development of the economy. The three broad sectors into which an economy is divided are agriculture, industry and services. Initially, all economies had been agricultural economies providing employment to a large percentage of the population. As industrialisation occurred, industries and services sector developed, so labour moved to these sectors. In a developed economy, a larger percentage of labour is employed in the industrial sector and services sector and the least in the agricultural sector.
5. What are the features of the Indian economy at the time of independence?
Answer: The features of the Indian economy at the time of independence were:
- Colonial Economy: India was a feeder economy for the growing British imperials. It supplied raw material for the fast-growing British industries and was also a ready market for the machine-made British goods.
- Backward Economy: Due to colonial interests, India had few industries, set up in the late 19th century, and most of the agriculture relied on primitive and traditional methods of farming. Industries were neglected.
- Stagnant Economy: The British had undertaken little or no interest in the development of the economy. Whatever development came by, was because it best served the British interests.
- Lopsided Economy: The British developed only those industries which would help the imperial economy grow. Indigenous industries such as handicrafts, cottage and small-scale industries, and Indian consumer goods industries were neglected.
- Depleted Economy: When the Britishers left, India owed a large debt. This debt had accumulated because a large expenditure had been incurred in maintaining the army (that helped the British rule and served their interest) and the administrative staff of the British.
- Dependent Economy: At the end of the British rule, the once self- sufficient economy was depending on other countries for everything—food, raw material for modern industries, machinery and equipment, and even administrative know-how, education and health facilities.
8. Explain briefly the challenges for the Indian economy on the eve of independence.
Answer: The Indian economy faced the following challenges just after Independence:
- Vicious cycle of poverty: The Indians had the lowest per capita income and consumption. Low income resulted in low levels of saving leading to low productivity and further low level of income. This vicious cycle further perpetuated poverty in the economy.
- Rural economy: Nearly 85 per cent of the population lived in villages and eked out a livelihood from agriculture and related pursuits using traditional and low productive techniques.
- Unemployment and underemployment: There was a gradual decline of India’s traditional art and handicrafts industry. This along with rapid population growth pressurised land and led to low productivity in agriculture.
- Backward technology: There was deficiency of capital which led to failure to use new technology. Therefore, production techniques remained old and traditional. Productivity was low.
- Limited size of market: Low level of per capita income and backward technology limited the size of the market. Entrepreneurs were few and the limited few had no incentive to invest in producing a variety of different products.
- Negligible industrial growth: Only 10 per cent of the population derived its income from industry. Little surplus was left for development of industries.
- High growth rate of population: Birth rate was high, so population increased rapidly, especially after 1921.
- Conditions of living: The country experienced frequent famines and most of the population was illiterate. Medical facilities were inadequate and mass communicable diseases were widespread in the absence of any public health services.
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