o Assessed in terms of occupational distribution of the working population in India at the time of

Independence, we get a disappointing picture of the Indian economy.

o Since bulk of the working population was engaged in agricultural sector (along with the fact
that agriculture was merely a means of subsistence), Indian economy was in a state of extreme
backwardness.
□ The masses led their life in extreme poverty.

8. INFRASTRUCTURE ON THE
EVE OF INDEPENDENCE
Infrastructure refers to the elements of (i) economic change (like means
of transport, communication, banking, power/energy), and the elements
of (ii) social change (like growth of educational, health and housing
facilities), which serve as a foundation for growth and development of a
country.

Indian Economy on the Eve of Independence 17

 . , .nfrastructure on the eve of independence can b
The state of India s 1 . e
c ll wing observations:
described in terms of tl1e io o
. . d loped to transport finished goods from Brit .
(i) Railways we1e eve . . . . a1n .
. .· . f the colonial India (with a view to widening th
to the 111te1101 s o . . . e
. f 1et) It aimed at widening the size of the market to
size o t11e mar < · r
the British products in India.
loped to handle export of raw material to Britain
(ii) Po_rts_.were deve . .
and import of fi nished goods from Bntam.
(iii) Post~rnd telegraphs were developed to enhance ad~inistrative efficiency.
(iv) Roag_s were developed to facilitate transportat10n of raw material
from diffe~ent parts of the country to the ports.
Briefly, some modest infrastructural change in the .economy during the
British Raj is not denied. But, the motive behind this ch~nge was not the
growth and development of the Indian economy; rather it ~as the ~ro~
and development of the British economy through colonial exploitation
of the Indian economy. Consequently, Indian economy remained to be
backward.

IMPACT OF RAILWAYS IN INDIA i D

Ra il ways faci litated commerci alisation of agriculture, as goods could then be moved to distant
· places. This implied a modest ch ange in the outlook of the farmers . They started viewing farming
'; as a business, rather than merely as a source of subsistence
Positive Impact
(i) Rai lways facilitated expansion of the domestic market.
Acco rd ingly, exports and imports of the country
showed a signifi ca nt rise .
(ii) Railways faci litated commercialisation of agriculture,
as goods could then be moved to distant places.
This implied a modest change in the outlook of the
fa rmers. They started viewing farming as a business, '
ra ther than merely as a source of subsistence.
(iii) Rai lways enabl ed people to break the barriers of distance and undertake journeys to far off
places. Thi s promoted cultural affinity among the countrymen .

1 (iv) Faste r movement of food grain across different pa rts of the country (owing to Railways) helped
control the spread of fami nes. Food supplies could reach the people before they were driven
to starvation.
1
Negative Impact
(i) Railways contributed to coloni al expl oitation of the Indian economy. Because, pri mary goods
(raw material) cou ld then be easi ly tra nsported from the fields and farms to the ports for the
pu rpose of expo rts to th e British economy. I
\
(i i) And , fini shed goods coming as imports to the India n economy could be easily tran sported to
the interiors of the country fo r purpose of sale. I
I

. (i ii) Thus, the spread of ra ilways led to the spread of the domestic market for the British products.
_j
I
\

18 Indian Economic Development

 . f t ucture on the eve of independence
f I d · 's in ras r can b
TI1e state o n ia f £ llowing observations: ~
d ·bed in terms o t 11e o
escn d ped to transport finished goods from B . .
(1.) Railways were eve 1o . ( .h . . r1ta111
. . f the colonial India wit a view to widening th
to the mtenors o . l . f h e
t) It aimed at widenmg t 1e size o t e market f
k
size of the mar e · . or
the British products in India. .
d to handle export of raw matenal to Brit .
(ii) Port~ ere deve1ope . . a1n
- . f fi . hed goods from Bntam.
and import o ms . . .
(iii) Post and tel~p»s were
•i, developed to enhance admm1strative efficien
.. . cy.
\
d to facilitate transportation of raw material
(iv) Roads were d eve1ope \
f ~~ - diffe~ nt parts of the country to the ports.
. d t ·nfrastructural change in the economy during the
Bnefly, some mo es 1 . .
.. ..
Bnt1sh RaJ 1s not eme ·
d · d But the motive behmd this change was not the
' . \
ment of the Indian economy; rather it was the growth
growt h an d d eve1op . . ..
and development of the British economy through colomal ex_pl01tat1on
of the Indian economy. Consequently, Indian economy remained to be
\
backward.

IMPACT OF RAILWAYS IN INDIA i gs l

'
C) . !

, Railways facilitated commercialisation of agriculture, as goods could then be m_ove_d to d1st~nt

1
places. This implied a modest change in the outlook of the farmers . They started v1ew1ng farming
: as a business, rather than merely as a source of subsistence
' Positive Impact
(i) Ra ilways facilitated expansion of the domestic ma rket.
Accord ingly, exports and imports of the count ry
showed a significant rise.
(ii) Ra ilways facilitated commercialisation of agriculture,
as goods could then be moved to distant places.
Th is implied a modest change in the outlook of the
farmers . They started viewing farming as a business,
rather than merely as a source of subsistence.
(i ii) Railways enabled people to break the barriers of distance and undertake journeys to far off
places. Th is promoted cultural affinity among the countrymen .
(iv) Faster movement of food grain across different parts of the country (owing to Railways) helped
control the spread of famines . Food supplies could reach the people before they were driven
to sta rvation .
/ Negative Impact
(i) Railways contributed to colonial exploitation of the Indian economy. Because, primary goods
(raw material) could then be easily transported from the fields and farms to the ports for the
purpose of exports to the British economy.
(ii) And, finished goods coming as imports to the Indian economy could be easily transported to
the interiors of the country for purpose of sale.
(iii) Thus, the spread of railways led to the spread of the domestic market for the British products. _ ___ _ J1

18 lndJ(ln Economic 01:: velopment

Was there any Positive Impact of the British Rule in India?
Certainly not, if the impact of the British rule is studied with reference
to 'motive' of the British government in India. The motive was clear and
foc used: it was colonial exploitation of the Indian economy. However,
the means to achieve the end yielded some positive side-effects. These
are as under:
( 1) Commercial Outlook of the Farmers: Forced commercialisation of
agriculture under the British rule exposed the subsistence farmers
to uncertainties of the market. True, but it also led to a gradual
change in outlook of the farmers . The farmers started considering
market price of the produce as an important determinant of their
production decisions.
(2) New Opportunities of Employment: Spread of railways and
roadways opened up new opportunities of economic and social
growth.
(3) Control of Famines: Rapid means of transport facilitated rapid
movement of food grain to the famine -affected areas. Accordingly,
famines were controlled.
(4) Monetary System of Exchange: There was a transition from barter
system of exchange to monetary system of exchange. Growth
of monetary system of exchange facilitated division of labour,
specialisation, and large-scale production.
(5) Efficient System of Administration: The British governm ent in
India left a legacy of an efficient system of administration. This
served as a ready-reference for our politicians and planners.
 Power Points & Revision Window
■ r ol Jnial [ ,ploit.,tion of th£> Indian Economy under the British _Rule : Co loni al ex_~loitatwn of the Indian
h· (i) Colonia l exploitation of ag ri cu ltural sector, (11) Co lonial exploitat;
eco nomy wa -:, ac h1eve d throug • . on
of indu sl ria l sec tor, (iii ) Co loni al exploitation of inte rnational trad e.
■ Fe mm· of lndi,,n ~r:onomy on the Eve of Independence: (i) Stagnant econo my, (ii) Backward econorny,
(ii i) Agricullural backwardn ess, (iv) Indu str ial back~ardn ess, (v) L_ ow per capita inco me, (_vi ) Poor
inf ras tru clure, (vii) Heavy depend ence on impo rts, (v11 1) Low proportion of urban population, (i x) Serni.
reud al eco nomy, (x) Co loni al economy.
■ ~ ,itP of '\rnculturc under the British Ruic: Indian agri culture under the British rul e showed these
charac teristi cs :
• Low producti on and produ ctivity.
• High degree of un ce rtainty: good harvest wh en it rains good and bad harvest when it rain s bad .
• Dominance of subsistence farming : till ers of the soi l took to agriculture merely as a source of
subsistence, neve r as a source of profit.
• Widen ing gulf between owners of the soil (zamindars) and tillers of the soi l.
• Wa stage of reve nue incom e on conspicuous consump tion . Implying 'low or no' investment fo r the
growth of agri culture. Net co nseq uence : ba ckwardness of farmers as well as farming .
■ State of Industry under the British Rul e: Ind ian indu stry (a s dom inated by handicrafts) which at one
time enjoyed globa l reputati on, suffered a systematic destruction during the British rule . It was largely
owing to discrimi natory pol icy of the British government. While cheaper industrial goods were allowed
tariff-free access to the Ind ian markets, hand icraft products from Ind ia were subjected to heavy export•
duty. Handicrafts in India lost both domesti c as well as international market. Growth of the modern
industry was tardy. It la cked state-initiative . Capital goods industry was almost non -existent. Process of
indu stria lisati on remained lop-si ded .
■ State of Foreign Trade under the British Rule: Fore ign trade of India took a hit in two ways:
• Composition of trade showed a shift from the export of finished goods to the export of raw material
and from the im port of bull ion (gold and silver) to the import of fin is hed industrial products, largely
from Britain, and
• It wa s monopol ised by the Briti sh government, ending multinational exports from Ind ia.
■ Demographic Profile under the British Rule: India's demograph ic profile showed high birth rate, high
death rate, high infant mortal ity rate, low expectancy of life and low rate of literacy. These characteristics
po int to economic and soci al backwardness of the country.
■ Occupational Structure under the British Rule: More than 70 per cent of working population was
engaged in agriculture. Industry offered employment merely to 9 per cent of the working population .
Th is is yet another pointer to economic and social backwardness of a country.
■ Infrastructure on the Eve of Independence: Infrastructure-econom ic as well as social-continued to be
highly deficient. There wa s a modest change, but only to facil itate colonial exploitation of the Indian economy.
■ Some Positive Side-effects of the British Rule in India: With a view to enlarging size of the market for
British goods in India, the Briti sh government needed to provide some infrastructural fac ilities in Ind ia.
These included : (i) Transport fa ci lities, largely in terms of railways, (ii) Development of ports, (iii) Provision
of post an d telegraph services. Besides, the British government left a legacy of a strong and efficient
admin istrative set-up.

20 lndwn Economic Development