Introduction:

British Rule in India: Indian Economy was used for prosperity and development of British Economy.

Indian economy before British Rule: (i) Agrarian Economy (ii) Known for its Handicrafts and textile industry (ii) Prosperous economy.

Conditions of the various sectors :

Agriculture Sector: Stagnation in agriculture sector. Reasons for stagnation:

(i) Land Settlement System (Zamindari System)

(ii) Commercialization of Agriculture (Production of cash crops for British)

(iii) Lack of Capital investment

(iv) Low Productivity and outdated farming techniques

Industrial Sector: The state of industrial sector was bad as all industries were destroyed. Handicraft and textile industry was destroyed.

(i) De-industrialisation

(ii) Negative impact of decline in industry: (a) Increase in unemployment (b) Decreased income (c) Economic decline (d) Cultural loss

(iii) Insufficient production of capital goods

(iv) Very low level of contribution to GDP

(v) Minimal presence of Public Sector: The public sector was restricted to railways, power generation, communications, ports, and shipping.

Foreign Trade Sector:

(i) Importer of finished goods and exporter of raw materials

(ii) Control over trade- monopoly control over exports and imports

(iii) Discriminatory tariff policy

(iv) Drain of India’s wealth

Demographic Conditions:

(i) High birth rate and high death rate

(ii) Lack of Public Health Facilities

(iii) Very Low levels of literacy rate

(iv) Low Life Expectancy

(v) Poverty

(vi) High infant mortality rate

(vii) Low standards of living

State of Infrastructure:

British rulers developed basic infrastructure such as roads, railways, ports, water transport, post, and telegraph for mobilising army and shifting raw materials in their colonial interests.

As a result, their was absence of good roads, electricity, health facilities and other basic facilities for Indian.

State of Indian Economy on Eve of Independence:

(i) Stagnant economy

(ii) Depleted economy

(iii) Semi feudal Economy

(iv) Colonial Economy

Few Positive Effects of British Rule:

The positive effects of British rule were:

1. Development of ports: They developed ports to carry raw material and bring finished goods to India.

2. Development of Communication System: Post and telegraph services were introduced by Britishers.

3. Strong and Effective administrative setup.

4. Political Unification happened during Britishers.

5. Banking and monetary system developed during British rule.