1. The Indian economy on the eve of independence was overwhelmingly rural and agricultural, with over 85% of the population deriving livelihood from agriculture. However, agricultural production was not sufficient to meet food and raw material needs. 2. The industrial sector had declined significantly under British rule. The handicraft industry had been destroyed and India had become dependent on importing finished British goods. Unemployment was high and industry contributed very little to GDP. 3. Foreign trade policy benefited Britain, with India exporting primary goods and importing manufactured British goods. More than half of India's foreign trade was restricted to Britain, resulting in a drain of Indian wealth to Britain.

3. LESSON 1 Indian Economy on the Eve
- =
of Indepence .
Low level of Economic Development Under
Colonial Rule .
→ Prosperous Agrarian Well Known
Economy Economy handicraft
industries
it is
India was self-Reliant zizrd Population f,
silk and cotton
and prosperous.
in
Agri" '""
T
extile
industry
was rich .
due to high standard of
CRAFTSMANSHIP.

4. town Kewell off ☒
laattiionnaalllnneoomme
canned Beer eaappiittaallnneommee ..
→ No sincere Attempt → Individual Attempt by
by the British Govt -
Dadabhai Naoroji,
William
Digby,
Fid lay shirras ,
v. K . R- V Rao
and R .
C Desai.
→
conflicting Results .
Dr. Rao 's
study were → country 's
growth of Aggregate
significant.
Real output =
24 .
per capita output
=
o
-
5
'
/.
per year

5. AAgrrieokwrraats.ec#or
Condition of Indian
Agriculture was not at all
satisfactory .
1- . India 's
economy
under the British colonial rule
was
overwhelming rural and agricultural in character.
2. 857.
derived livelihood
Directly or
indirectly .
3. produce was not sufficient for food 4 raw materials .

6. REASON FOR STAGNATION
1. Land settlement system
: -
↳ zamindari
system -7 Collection of Lagaan by zamindari.
-
-
2. commercialisation of Agriculture
: -
fi production of ↳ CASH CROPS : cotton 4 Jute
crop for SALE .
- -
3. Low level of
Productivity
: -
↳ Low level of Tech .
-1 No irrigation facilities + No fertilizer

7. Industrial sector
I. If
-
industrialisation
Decline Of Handicraft Industry .
Primary Motive of British rule
→ Get Cheap Raw Material From India.
→ sell British goods at higher prices.

8. 2. Adverse effects of decline
of Handicraft industry .
① High level of unemployment ② Import of Finished Goods .
↳ Decline of Indian handicraft
↳ Indian made
goods could
not withstand the foreign
resulted in unemployment .
competition.
3. Lack of capital Goods
4. Low contribution to GDP .
Industries .
↳
very low contribution .
Britishers wanted Indians
for the
supply of capital
goods
and heavy equipments . 5. Limited role of Public sector
↳ Railways .
power generation ,

9. FOREIGN TRADE
1-
Exporter of primary Products
Importer of Finished Goods
Export ? Raw silk,
cotton , wool
sugar ,
indigo , jute,
etc
Import : silk' cotton ,
woollen clothes
light machineries 2 .
Monopoly
control of
British Rule .
↳ More than half of
India 's
foreign trade
were restricted to
Britain

10. 3. Drain of Indian wealth
4
Huge export surplus
due to excess
exports
Usei import invisible items
meet War expenses
expenses by British Govt .

11. ☒emmooggrraaphhi.cc ccoonncdlittioonn .
1st OFFICIAL Census : -
1881
year of Great Divide : -
1921 → First stage of demographic
transition .
1. High Birth Rate
and Death Rate
↳ Birth Rate : No.
of children born
per thousand in a
year. -7 48.
Death Rate : No .
of people dying per thousand in a
year
↳ 40 .

12. 2. Extremely Low
Literacy Rate
↳
Overall literacy level → 16
per cent.
Female literacy level → 7
percent.
3-
High Infant Mortality Rate
4- No .
of infants dying before reaching one
Year 218 per thousand
of age per 1000 Live births in a
year
.
:
44 per
thousand
in 2011 .
4. Low life Expectancy .
↳
Average No-
of years for which
people
are expected to live -
→ 44 years
-

13. ⑤
eeuulpaattiioonnaal Structure .
-
Distribution of working persons across different industries
and sectors .
1. Pre -
dominance of Primary occupation :-
Agricultural sector accounted for 75% workforce
2. Regional variation .
states → T
amil Nadu, Andhra Pradesh .
Kerala , Karnataka
Maharashtra and West Bengal
↳ increase in Manufacturing and service sector
↳ Decrease in
Agriculture
STATES LIKE
"
ORISSA , RAJASTHAN, PUNJAB saw an increase in the share of Agriculture
workload

14. Itnnfrraassttrruueltturree
1. Roads → Mainly used for Mobilising the
army
and shifting raw materials.
fi
There was a
shortage
of all weather roads .
2. Railways → British introduced in India in 1850 .
↳
It enabled commercialisation
Railway enabled people
to undertake
long distance of Indian agriculture.

15. 3. Air and water
Transport .
Development of water
and Air was far from satisfactory.
4 . Communication
↳ Posts and Telegraphs
were the most popular
means of communication .

16. ssittivveeonnttrribbutitionnoot.PBrriitti.sk Rude .
1. Self -
sufficiency in food grain production : -
commercialisation
of Agriculture resulted in self -
sufficiency
2. Better means of Transportation :-
Development of Infrastructure .
3 .
Shift to Monetary Economy ;.
Shift from BARTER system
4 .
Effective administrative setup
: -
Ready for Indian politicians .

17. STATE OF INDIAN ECONOMY ON THE EVE
OF INDEPENDENCE .
1- . Colonial Economy
They incovraged
British rule resulted
in huge drain of wealth communication of
Agriculture and Industri cisation .
2. Semi -
feudal Economy
→ land settlement system
gave birth to feudal relations
&
Establishment of modern
Industries led to creation
of two classes
CAPITALIST 4 LABOURERS

18. 3.
Stagnant Economy
India 's growth was stagnant
as
country 's growth of aggregate
real output was less than 29.
Growth in Per capita output -
051.
U . Backward Economy
Indian Economy was backward and underdeveloped .
5 .
Depleted Economy
4 No Arrangement
made to replace physical assets ,
depreciated due to
excess use in 2nd World War .
6 . Amputated Economy .
British Policy of Divide And Rule always Promoted Discrimination .