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Indian Economy On The Eve Of Independence — Economics STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEconomicsIndian Economy On The Eve Of Independence4 Marks
Question
Was there any economic drain during the colonial period? Explain.
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Answer

During the colonial period there was economic drain, i.e., drain of Indian wealth, by way of the following facts.
  1. Large export surplus generated by the foreign trade during the colonial period was primarily for bearing the expenses of war fought by Britain. It was also used to maintain its administrative set up. This came at a huge cost to country's economy, as it was not used in any developmental activity of India. Many essential commodities, in turn like foodgrains, kerosene etc. were in scarce supply in the domestic market.
  2. Commercialisation of agriculture promoted the cultivation of cash crops like indigo etc. at the cost of food crops. This was the vested move of the Britishers to benefit largely by using these cash crops in their industries as raw materials in Britain.
  3. Competition from machine-made goods from Britain led to the decline of world famous Indian handicrafts. This brought about massive unemployment, poverty and misery in the country.
  4. Introduction of railways by the British also contributed to economic drain during the colonial period. Railways facilitated in turning India into a large market for the finished products of British industries.

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