British colonial rule - class-XI

 The colonial rule transformed India's agriculture sector to a mere supplier of raw materials for the British industries. This not only affected the production of the agricultural sector but also ruined the small manufacturing units like handicrafts and cotton industries. There was very minimal appreciation of the labor forces and compensation of the employees by the colonial regime therefore the workers motivation was very low, with low motivation the workers input will definitely go down low input will obviously lead to lower rates of industrials potential output therefore hindered .

Notable economists during colonial peiod who estimated India's per capita income are Dadabhai Naoroji, William Digby, Findlay Shirarras, V.K.R.V Rao and R.C. Desai.

Vijayendra Kasturi Ranga Varadaraja Rao (8 July 1908 – 25 July 1991) was an Indian economist, politician and educator from Tamil Nadu. Rao applied pure scientific exercise in the estimation of National Income. This was his unique achievement at that time and gave credibility to his work over the years he became more and more assertive on the analytical limitations of inter-country comparisons of national and per capita income.

The colonial rule transformed India's agriculture sector to a mere supplier of raw materials for the British industries. This not only affected the production of the agricultural sector but also ruined the small manufacturing units like handicrafts and cotton industries. There was very minimal appreciation of the labor forces and compensation of the employees by the colonial regime therefore the workers motivation was very low, with low motivation the workers input will definitely go down low input will obviously lead to lower rates of industrials potential output therefore hindered .

During British rule, India was forced to export raw materials to Britain and import finished industrial goods from Britain, creating a lopsided colonial economy.

Dadabhai Naoroji was not satisfied with the official estimates regarding the national income of India during the British rule. “The Indian Economist” was the only journal which gave such knowledge in those days. Naoroji regarded this information regarding the country’s prosperity as insufficient and misleading. He was the one who estimated India's per capita income during the colonial period.

The main focus of the economic policies pursued by the colonial government was to make India a mere supplier of raw materials for Britain's own industrial base which was undergoing rapid expansion. The Indian Economy was exploited in order to promote British industries.

The main focus of the economic policies pursued by the colonial government was to make India a mere supplier of raw materials for Britain's own industrial base which was undergoing rapid expansion. The Indian Economy was exploited in order to promote British industries.

All economic progress or rise in production in an economy gets neutralized because of population pressure as more population utilized the extra increase in production from the previous accounting year and hence the progress of the economy gets hindered.

India consists of a vast variety of natural resources but most of the resources are under-utilized,that is, 'excess capacity' exists in the Indian economy and India still settles in the low level equilibrium trap.

Indian agricultural sector accounts for 18 percent of total GDP of India  and creates employment for 50 percent of the total countries' workforce. Hence, dependence of agriculture is one of the features of the Indian economy.

India was globally renowned for its high-quality handicrafts, specifically cotton textiles, silk, metalwork, and precious stone work, before the decline caused by British industrial policies.

Due to centuries of colonial exploitation, the Indian economy was largely stagnant and underdeveloped in terms of industrial capacity and infrastructure at the time of independence in 1947.

The reason responsible for the heavy population pressure is high birth-rate, falling death-rate, high immigration from adjoining countries. The growing population imposes a huge economic burden on the society because the growing requirements of basic necessities are to be met by the government. It effects the economic progress of the country.

An expert committee under the Chairmanship of Sir Otto Niemeyer was appointed in 1936 to inquire into the financial position of the Provinces, the special assistance required by each and the time and mode of distributing the provincial share of income tax and proceeds of the export duty on jute.

Sir Niemeyer recommended that assistance should be given to the provin­ces in three-ways:

(a) The outstanding debts incurred before 1935 by Bengal, Bihar, Assam, the N.W.F.P. and Orissa plus approximately Rs. 2 crores of pre-1921 debt in the case of Central provinces should be cancelled.

(b) Appreciating that the jute growing provinces stood in special need of financial assistance, it recommended distribution of a further 12.5% of the Export duty on jute, thus making a total of 52.5% to the jute growing provinces.

(c) Such provinces as might be in need of assistance should be given grants- in-aid to balance their budgets. It was expected to provide “in-built flexibility.”

As regards the distribution of the proceeds of Income Tax between the Centre and the provinces, it recommended that provinces and the federated states should get 50% of the proceeds of the tax; the share of each province to be fixed partly on the basis of population and partly on the basis of the residence of the assessees.

The author Dadabhai Naroji, wrote "Poverty under British Rule in India" , who devoted his entire life to the cause of India's upliftment and independence was a social reformer, a member of the British Parliament and founder of the Indian National Congress.

In India, British developed railway because of their own interest. They wanted to export raw material from inner parts of India to their country and also to supply their manufactured products in interior hinterland. In this process they need to develop railway infrastructure in India.

Drain Theory was published by Dadabhai Naoroji in his book 'Poverty and Un-British Rule in India". According to it, while a part of India's capital and wealth was being drained out or exported to England in the form of interests on loans, earning of the British capital invested in India and salaries and pensions of European officers, India get nothing in return.

The Indian economists Dadabhai Naoroji, V.K.R.V. Rao, R.C. Desai and British Findlay Shirras and William Digby attempted to measure India's national income. Among all, V.K.R.V. Rao was the most successful.

The country's growth of aggregate real output during the first half of the twentieth century was less than two per cent coupled with a meagre half per cent growth in per capita output per year.

British's profits came primarily from the sale of Indian goods abroad. It tried constantly to open new markets for Indian goods in Britain and other countries. Thereby, it increased the export of Indian manufactures and thus encouraged their production.

Colonial rule transformed India's agriculture sector to a mere supplier of raw materials for the British industries. This not only affected the production of the agricultural sector but also ruined the small manufacturing units like handicrafts and cotton industries. There was very minimal appreciation of the labor forces and compensation of the employees by the colonial regime therefore the workers motivation was very low, with low motivation the workers input will definitely go down low input will obviously lead to lower rates of industrials potential output therefore hindered .

The country's growth of aggregate real output during the first half of the twentieth century was less than two per cent coupled with a mere half per cent growth in per capita output per year.

 Nearly 85% of the country's population lived in villages where livelihood completely depended on agriculture. The Indian economy on the eve of independence with respect to agriculture was disheartening. The most important Indian sector was facing massive stagnation and continuous deterioration. Our economy had been a victim of enormous exploitation. Our natural resources, iron ores, gold mines, wealth and manpower was subject to intense exploitation. Due to these atrocities, the Indian economy on the eve of independence showed poor/low economic growth,low per capita income,no saving and investment.

India is one of the most populous countries in the world. Labour is available at a high rate in India, thus, Indian economy is labour surplus and for production mechanism more labour intensive methods are used.

The statement regarding production techniques is correct. The reason being that production techniques are backward in an underdeveloped economy. Others are incorrect because agriculture occupies $53.2$% (in $2009-10)$ population of India and
nearly $29.8$% population of India is below the poverty line in
$2009-10$.