3.2 ndian onom
its literacy was only 17 per cent with 32.5 years of
The Background life expectancy at birth.3
The economic profile of India was in complete Industrialisation of India was also neglected by
distress at the time of Independence. Being a the colonisers—the infrastructure was not built to
typical case of colonial economy, India was serving industrialise India but to exploit its raw materials.
a purpose of development not for herself but Indian capitalists who did emerge were highly
for a foreign land—the United kingdom. Both dependent on British commercial capital and
agriculture and industry were having structural many sectors of the industry were dominated by
distortions while the state was playing not even British firms, e.g., shipping, banking, insurance,
a marginal role. During the half century before coal, plantation crops and jute.4
India became independent, the world was having The pre-independence period was altogether
accelerated development and expansion in its a period of near stagnation showing almost no
agriculture and industry on the shoulders of the change in the structure of production or in the
active role being played by the states, with the
levels of productivity—the aggregate real output
same happening in the UK itself.1
during the first half of the 20th century estimated
There was not only the unilateral transfer of at less than 2 per cent a year or less.5
investible capital to Britain by the colonial state
The overall economic performance of India
(the ‘drain of wealth’), but the unequal exchange
under the British rule was very low. According
was day by day crippling India’s commerce, trade
to economic statistician Angus Maddison, there
and the thriving handloom industry, too. The
was no per capita growth in India from 1600 to
colonial state practiced policies which were great
1870—per capita growth was a meagre 0.2 per
impediments in the process of development in
cent from 1870 to 1947, compared with 1 per cent
the country. Throughout the colonial rule, the
in the UK.6 The per capita incomes of Rs. 18 for
economic vision that the state had was to increase
1899 and Rs. 39.5 for 1895 in current prices say
India’s capacity to export primary products,
the true story of the abject poverty Indian masses
and increase the purchase/import of the British
manufactured goods and raise revenues to meet were faced with.7 The repeated famines and disease
the drain of capital as well as meet the revenue epidemics during the second half of the nineteenth
requirements of the imperial defence.2 3. B. R. Tomlinson, The Economy of Modern India
The social sector was a neglected area for the 1860–1970, Cambridge University Press, Cambridge,
1993, p. 7.
British rulers which had a negative impact on the
4. Angus Maddison, The World Economy: A Millennial
production and productivity of the economy. Perspective, OECD, Paris, 2001, p. 116.
India remained a continent of illiterate peasants 5. A. Vaidyanathan, ‘The Indian Economy Since
under British rule. At the time of Independence, Independence (1947–90)’, in Dharma kumar (ed.),
The Cambridge Economic History of India, Vol.II,
1. Bipan Chandra, Mridula Mukherjee and Aditya Cambridge University Press, Cambridge, England,
Mukherjee, India After Independence, Penguin Books, Expanded Edition, 2005, p. 947.
New Delhi, p. 341. 6. Angus Maddison, The World Economy, p. 116.
2. Bipan Chandra, ‘The colonial legacy’ in Bimal Jalan 7. The respective data of Digby and Atkinson have been
(ed.) The Indian Economy: Problems and Prospects, quoted by Sumit Sarkar, Modern India 1885–1947,
Penguin Books, New Delhi, Revised Edition, 2004, p. 5. Macmillan, New Delhi, 1983, p. 42.