THE STRUCTURE OF THE INDIAN

ECONOMY:
PRE-INDEPENDENCE & POST-
INDEPENDENCE
ECONOMI CS
CHAPTER 3
RD

XI I
TH

-- Bhagirath Baria
Source: http://media2.intoday.in/btmt/images/stories/economy505_070412021636.jpg
Major time-periods
I. Pre-Independence [19
th
century]
II. Post-Independence [20
th
century and later]

Todays topic: Pre-Independence Indian Economy
1. Till 1750 A.D.
2. 1750 A.D. to 1830 A.D.
3. 1830 1947

Pre-Independence Indian
Economy
Till 1750 A.D.
- Exports were high
- Domestic production of Industrial Commodities
- Imports were lower than Exports
- Implies that India had a BUDGETARY SURPLUS.

1750 A.D. to 1830 A.D.
- Industrial Revolution in England
- The East India Company already had a strong trade
presence in India back then
- Implies that the effects of I.R. on Indian Economy took
place through 2 ways: 1. The East India Company; 2.
Indias Export-Import relations with England

1830 - 1947
Effects of Industrial Revolution on Indian Economy
- Positive Effects [T.B.] Pg. 22
nd

- Negative Effects [T.B.] Pg. 22
nd

Industrial sector in pre-independence India
- After 1850
- S R C T [Sugar, Rice, Cotton, Tea]
- Jute industrial units with British Capital
- Cotton industrial units with domestic capital
- What are the implications of Foreign capital for a colonial
economy?
- Suppose Bhagirath sir becomes your ruler and you
borrow money from him to start a business, think.
- Iron Production data [pg. 22
nd
]
- 2 % contribution in employment and 8% in GNP by the
end of World War-II

Agriculture sector
- Most of the developed nations of today were agro-
dominated economies in past
- So was and so is India till date
- Industrial development 1850 A.D.
- 70 % employment
- 57% or 44% in GNP
- Food grains production: 0.1%
- Population growth- 0.67%
- Difference: O.1% 0.67% = -0.57% points, Food deficit?
- Thus large amount of Food import
- Per hectare productivity remained low, What does it
mean?
Railway sector in pre-Independence India
- Large scale development by Britishers
- For their own political and economic interest
- First Railway in 1853, between Thane and Mumbai
- Transportaion costs reduced
- International trade increased
- Internal trade increased
- Agriculture and Industries were benefited
- Employment
- Link all the benefits above
Road Transport sector in pre-Independence India
- Expanded just like Railways did
- Britishers did so primarily
- Why?
- 1855 P.W.D. started
- 2.5 lakh KM to 4.5 lakh K.M. [approx.] by 1943
- 32%- surfaced roads
- 68% unsurfaced roads
Banking sector in Pre-independence India
- 1770 A.D.
- Bank failures in the beginning were common in India
- 1946- 700 banks, both Indian and Foreign
- Mostly in big cities, why?
- Banks that were established were- S.B.I., R.B.I., P.N.B.,
BoI, C.B.I., etc. [pg. 24
th
]
Low/insignificant Human Development
1. Health and Hygiene facilities were poor
2. Literacy rate was very low
What implications this has for Indian Economy?

Developing Underdeveloped
Conclusion
2 points emerge which kept Indian economy a developing
Economy, despite the previously stated developments:

Underdevelopment
Low non-agro
rowth
Low PCI
Source: http://www.business-in-asia.com/asia/images/india_gdp.jpg
Source:
http://www.eurobrandsindia.com/blog/wp-content/uploads/2011/03/gdp-india.png?w=600
Announcement of Case
study day