Important Questions: Indian Economy on the Eve of Independence | Economics Class 12 - Commerce PDF Download

Very Short Answer Type Questions

Q1: What is Muslin?
Ans: Muslin is a high-quality cotton fabric that is widely available nowadays. Malmal is the finest form of muslin and is claimed to be the purest fabric in the world. The name 'Muslin' is claimed to have originated in the British Indian port town of 'Maisolos’. People in Dhaka (now in Bangladesh) used to hand-weave it from fine hand-spun yarn.

Q2: What was the life expectancy in British India and what is it today?
Ans: According to government statistics, the average life expectancy in British India was 32 years. It has now been 69.27 years.

Q3: What is GDP in economics?
Ans: The Gross Domestic Product deals with the value of the economic activity of a country. It is equal to the total expenditures for all final goods and services produced within the country in a stipulated period. In 2017, India's Gross Domestic Product (GDP) was valued at 2597.49 billion US dollars. India's GDP accounts for 4.19 per cent of the global economy.

Q4: Which are the industries that were adversely affected by to partition of India?
Ans: After partition, the Jute and Textile Industries were the badly affected ones.

Q5: What were the motives behind deindustrialization by Britishers in India?
Ans: The two primary motives behind deindustrialization were to obtain superior quality raw materials at an extremely modest rate from India and to sell machine-made imported Western goods at an exceptionally high rate in the Indian market.

Q6: How did export surplus lead to the economic drain of wealth during colonial rule?
Ans: In a sense, whatever surplus India procured through excess exports, was redirected to colonial Britain under different expenses, for example, military payment, "home charges", interest payments or remittances of British residents and officials in India to Britain.

Q7: What is the commercialisation of agriculture and when did it begin?
Ans: Commercialisation of agriculture is an occurrence in which agriculture is governed by commercial reflection. In general, certain essential crops began to be grown for sale in national and international markets rather than for consumption in the village. Commercialization of agriculture in India began under British rule.

Q8: What was the importance of the Suez Canal during British India?
Ans: The Suez Canal, which opened in 1869, drastically reduced the cost of goods transportation between Britain and India.

Q9: What was the infant mortality rate of British India?
Ans: In British India, the infant mortality rate was 218 per thousand, which was fairly high.

Q10: Name some individuals who tried to estimate colonial India’s per capita income.
Ans: Findlay Shirras, Dadabhai Naoroji, William Digby, V.K.R.V. Rao, and R.C. Desai were among those who attempted to estimate such figures. Despite the inconsistencies in the results, V.K.R.V. Rao's estimates are considered accurate.

Q11: What is export surplus?
Ans: The amount of goods and services that a country exports that are in excess quantity as compared to that of the amount of goods and services with it imports from outside its geographical boundaries is called an export surplus.

Short Answer Type Questions

Q12: What do you understand by the economic drain of India during British rule?
or
Who has contested the theory of the drain of wealth from India?
or
What do you understand about the drain of Indian wealth during the colonial period?
Ans:

• In the 19th century, Dadabhai Naoroji introduced the concept of the 'Drain of Wealth', which explained how British rule exploited India's resources.
• The British aimed to obtain low-cost raw materials for their industries while using Indian wealth to purchase expensive British goods.
• Indian workers were employed for colonial expansion but were paid less than their British counterparts.
• Revenue from India and trade surpluses were often redirected to fund British administrative and military expenses.
• This led to a significant depletion of India's resources, harming its economy.

Q13: How did foreign trade evolve during the colonial period?
or
Discuss the state of foreign trade during the British period
or
Write a short note on the colonization effect on foreign trade of India.
Ans:

• At the beginning of the 19th century, India accounted for about 20% of the global economy.
• This share fell to around 4% by the end of British rule.
• Colonial policies severely limited foreign trade, redirecting India's traditional exports to serve British interests.
• The British imposed strict production and tariff policies, with over half of India's trade confined to the UK.
• The opening of the Suez Canal further tightened British control over trade.
• This led to a significant reduction in the flow of gold and silver into India, hindering the growth of its foreign trade sector.

Q14: What were the motives behind the systematic deindustrialization in India by the British?
or
What was the two-fold motive behind the systematic deindustrialization affected by the British in pre-independent India?
Ans: The two-fold motive behind the British systematic deindustrialization is as follows.
(i) Making India a Raw Materials Supplier: The fundamental rationale was to convert India to a simple exporter of significant raw materials in order to feed Britain's quickly growing industrial base.
(ii) Developing India as a Finished Goods Market: One more significant goal of the British Government was to transform India into a rambling market for those industries' final products ensuring that they could be guaranteed for the British industries.

Q15: How did British rule impact traditional handicraft industries in India?
or
The traditional handicraft industries were ruined under British rule. Do you agree with this view? Give reasons in support of your answer.
or
How British rule ruined the life of artisans and craftsmen in India?
Ans:

• British economic policies severely harmed India's traditional handicraft and cottage industries.
• Industries such as cotton weaving, silk production, and pottery were systematically dismantled.
• The British prioritised their own industrial needs, enforcing low prices on Indian artisans' goods.
• Heavy tariffs were imposed on Indian products, while British goods entered India duty-free.
• This exploitation caused a significant decline in India's renowned handicrafts.

Q16: What changes did the introduction of the railway system bring to the Indian Economy?
or
Discuss the changes railways brought to India.
Ans:

• The railway system, introduced in the 1850s, connected major ports like Bombay, Calcutta, and Madras.
• It enabled long-distance travel, breaking down geographical and cultural barriers.
• However, it also led to the commercialisation of agriculture, harming village self-sufficiency.
• While trade volume increased, the economic benefits largely bypassed the local population.

Long Answer Type Questions

Q17: Who were the Zamindars and what was the Zamindari system in British India? Write a brief note on the Zamindari system.
Ans: The Zamindari System was introduced by Lord Cornwallis through the Permanent Settlement Act of 1793, mainly in Bengal, Bihar, Orissa, and Varanasi. Key points include:

• Zamindars were recognised as landowners who paid revenue to the East India Company.
• They became a class similar to British nobility and were found in states like Punjab, Uttar Pradesh, and Gujarat.
• Land ownership changed over time, with Jagirs given to Jagirdars, who then allocated land to subordinate Zamindars.
• Zamindars forced peasants to farm their land in exchange for a share of the profits.

The three types of land tenure system adopted by the British are as follows:

• Permanent Settlement/Zamindari System: Bengal, Bihar, Banaras, and the NWFP divisions accounted for roughly 19% of the total area during British rule.
• Mahalwari System: During British rule, the Mahalwari System covered 30% of the country, including important areas of the NWFP, central provinces, and Punjab. 
• Ryotwari System: Assam, Bombay, and Madras Presidencies covered around 51% of the region under British rule.

The following are some of the impacts of the Land Revenue System:

• These land settlements established a commercial economy and abolished traditional rights. There was an upsurge in money-lending activities as a result of the cash payments of revenue.
• The land tenure system accentuated socioeconomic divisions. The wealthy had recourse to the courts to defend their assets, whilst the impoverished did not.
• The British land revenue system in India rattled the stability of Indian communities where agriculture and allied activities provided the majority of income. If a crop failed in any given year, they got miserable.
• Peasants were forced to produce commercial crops, causing them to pay higher rates for food grains and lower prices for cash crops.
• As a result, a substantial number of estates were put up for auction to settle revenue arrears. Many blamed it on the tenant farmers' "stupidity and rascality" in not paying their rents.

Rents were at an all-time high, and it was no surprise. This may be seen in the fact that revenue in 1793 was set at 90% of the rental; by the end of the nineteenth century, rents had climbed to the point that income was just 28% of the rental. This is a measure of the Zamindars' wealth as well as the unfairness meted out to other portions of India where assessments were significantly higher.

Q18: How was the Indian economy before the advent of British colonial rule in India?
or
What was the condition of India before the Britishers?
Ans: India was ruled by the British for more than a century. The British acquired the Empire section by section in light of the conditions prevailing in India prior to the arrival of the British. Weak central political power, competition with European rivals, military forces, and Mughal negligence were the significant reasons that prompted the colonization.  In spite of the fact that the British had no political power in India prior to their entry, it took more than two hundred years for British political power to emerge in India. The conditions that existed before the entrance of the British caused the colonisation of India.
Let us now consider the following points in relation to pre-colonial India:

• Political: At the time, caste was the most important factor, and political power was concentrated in the hands of the upper castes. Village political leaders were Thakurs and Patels. 
• Economic: The majority of the time, they were exchanging products or services with one another. Gold was also significant at the time. Agriculture and related businesses were the mainstays of the economy.
• Social: The social situation was the worst it had ever been, with ‘untouchability' and caste discrimination at an all-time high. Women were not allowed to participate in social, political, or economic decisions. Only Brahmin men were permitted to attend school, and even Brahmin women were not permitted to attend.
• Administration: It was well-managed from an administrative standpoint. There were three administrative levels. The village was the smallest autonomous administrative unit. The judiciary was not good; it was frequently skewed by caste, relative, and gender. 
• Military: The majority of it was modelled after the Mughal army. Cavalry played a crucial role in the military. It was methodical and effective.

Q19: Why is the impact of British rule highly debated among historians?
or
Was British colonialism good or bad for India?
Ans: The British Empire's dominance in India is conceivably the most questionable and the most fervently discussed part of the historical backdrop of the British Empire.  Most critics of British rule point out that all of these gains went to a small British ruling class, while the rest of the Indians benefited little. Most Indians were poor and oppressed by their own leaders before the British arrived, and British control was less harsh on ordinary Indians than rule by Indian kings, according to supporters of British rule.

Following are some of the benefits of the British rule in India: 

• Education System: People in India are divided because of the various languages spoken in different parts of the country. The British, on the other hand, made English compulsory in the educational system throughout the country to recruit clerical personnel among Indians. They were able to lower their administrative costs as a result of this. They also felt that Indians who were taught through their system would eventually adopt their beliefs. This, on the other hand, benefited the Indians in a completely different way. Communication in India was facilitated by the use of a common language. Indians gained a greater understanding of the world, society, and systems. Overall, it has aided in the modernization of the Indian people.
• Transportation: Prior to the arrival of the British, the only mode of transportation in India was bullock carts and other animals. The British built a vast network of highways and railways to facilitate the movement of raw resources from their source to the ports. The Red Hill Railroad Line in Madras was the first railway line. It was built in 1837 and was used to transport granite stone. In 1853, the first passenger railway line was established between Mumbai and Thane. In the same year, the postal service was also established.
• Modernisation of the society: The British instilled in India the concepts of liberty, equality, human rights, science, and technology.  This, together with a well-structured educational system, opened the path for the country's modernisation that was completely oblivious to the world's modern developments. In 1829, Sati, a ritual in which a widow threw herself in her husband's funeral pyre, was outlawed. In 1929, the Sharda Act was passed to prevent child marriage.
• Architecture: The Britishers left behind an enormous number of public structures glad for their architectural wonders such as The Rashtrapati Bhavan, The Parliament House, Gateway of India and many others. They likewise presented current techniques and methods for development to the country. 

Q20: Enumerate the reasons for the poor growth and productivity of the agricultural sector in the colonial period.
or
How were the conditions of peasants during British rule?
Ans: The plight of Indian peasants deteriorated steadily under British rule. The Englishmen implemented several land revenue schemes after obtaining the Diwani of Bihar, Bengal, and Orissa. The agriculture sector dominated the Indian economy both pre-colonial and during the colonial period. The agriculture industry flourished as well after the British invasion. Previously, India used to export completed commodities and import raw materials. India became a net importer of completed goods and a net exporter of raw materials, primarily to Britain, following changes in agricultural laws that urged farmers to plant specific crops. There was a global agricultural catastrophe following World War I. The British Era is also recognised as a period of agricultural commercial transformation. Cash transactions largely superseded the barter system as the medium of exchange. The main motivation for agricultural commercialization was that India had been relegated to a provider of raw materials and food grains to the United Kingdom, as well as an importer of British manufactured goods. Many cash crops were introduced and spread during this period, including indigo, cotton, jute, tea, and tobacco.
The impact of British rule on Indian agriculture:

• The British introduced a new class of landowners known as Zamindars, who viewed land as their personal property and sought to maximise monetary gains from it.
• Agriculture production was no longer just for the benefit of the hamlet, and much of it was sold at the market.
• The cultivators, who were the actual land tillers, were merely tenants with no rights who might be expelled by landlords.
• The fanner was frequently severely in debt, putting him in the hands of moneylenders who eventually gained control of the land and its harvest.
• In England, farmers were forced to grow cash crops to feed the industries. It undermined the village's self-sufficiency.
• The new revenue arrangements resulted in peasant indebtedness and agricultural commercialization.
• As a result, there was widespread poverty and an issue of landlessness.

The money-lender cum merchant was aided in exploiting the grower by the expanding commercialization. The peasants were required to sell their produce soon after harvest, at whatever price they could get, to satisfy the demands of the government, money-lenders and landlords. The growth in population pressure on agriculture, which disproportionately affected peasants, was added to the previous issues. The goal of agricultural activities switched from self-sufficiency to commercialization, to increase colonial revenues. As a result, cash crop yields increased, but this did not benefit farmers in any manner.