Development Experience (1947-90) and Economic Reforms since 1991
Current Challenges Facing Indian Economy
Development Experience of India
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Status of Indian Economy before British colonial government

  • India had an independent economy before British rule.
  • Agriculture was the main source of livelihood for the majority of the population, even though the country’s economy was characterised by various kinds of manufacturing activities.
  • India had the great repute of its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc. due to fine quality of material used and the high standards of craftsmanship.

LOW LEVEL OF ECONOMIC DEVELOPMENT UNDER THE COLONIAL RULE

  • The economic policies persuaded by the colonial government in India were concerned more with the protection and promotion of the economic interest of their home country than with the development of the Indian economy.
  • Such policies brought about a fundamental change in the structure of the Indian economy-transforming India into supplier of raw materials and consumer of finished industrial products from Britain.
  • The colonial government never made any sincere attempts to estimate India’s national and Per capita income.
  • Some notable estimators-Dadabhai Naoroji, William Digby, Findlay Shiras, V.K.R.V. Rao and R.C. Desai attempted to measure these income yielding inconsistent results.
Low Growth Rate during the colonial period

The country’s growth of aggregate real output during the first half of the twentieth century was less than 2% coupled with a meagre o.5% growth in per capita output per year.

Quick Acid Test

India had an independent economy before the British rule.

  • Agriculture was the main source of livelihood for majority of population, even though the country’s economy was characterised by various kinds of manufacturing activities.
  • India had great repute of its handicraft industries in the fields of cotton and silk textiles, metal and precious stone works etc. due to fine quality of material used and the high standards of craftsmanship.

The economic policies persuaded by the colonial government in India were concerned more with the protection and promotion of the economic interest of their home country than with the development of the Indian economy.

  • Such policies brought about a fundamental change in the structure of the Indian economy-transforming India into supplier of raw materials and consumer of finished industrial products from Britain.
  • Deindustrialisation:India could not develop its industrial sector under the colonial rule. This is because the colonial government followed the policy of systematic deindustrialisation.
  • India’s Per capita Income was mere half percent growth rate while Growth of GDP was less than 2 %.

Following are the some of the notable economist during the colonial period.

  1. Dadabhai Naoroji:
  2. William Digby
  3. Findlay Shirras 
  4. K. R. V. Rao
  5. R. C. Desai

Among these economists, Rao’s estimates were considered more significant.

​The country’s growth of aggregate real output during the first half of the twentieth century was less than 2% coupled with a meagre o.5% growth in per capita output per year.