got independence, her economy remained shattered. The fine balance that existed among the major sectors of the economy namely agriculture, industry and services had collapsed much earlier. Kennedy notes that India ’s share of global manufacturing had declined drastically from 24.5 per cent to a mere 1.7 per cent in a period of just 150 years, between 1750 and 1900. India had already become an importer in the nineteenth century, losing her long held status as a premier exporting nation. The destructive policies of the British, their tactful diversion of funds outside the territories and the continuous drain of wealth had made the nation to accumulate debt for the first time in the recorded history of the country. Ultimately, Will Durant notes that the national debt of India stood at 3,500,000,000 in 1929. India
Much of the population who were driven out of their vocations became either landless labourers or had to take up menial jobs. As a result there was a heavy dependence on agriculture and allied activities. Maddison notes that at the end of the British rule, the percentage of the labour force dependent on the village economy was 75 per cent for a share of 54 per cent of national income after tax. 17 per cent of the labour force was working as landless labourers and scavengers for a share of just 4 per cent of national income.
The industrial and business sectors were weak. Native industries of different types were deliberately destroyed over the years. Hence the employment opportunities for people in productive avenues were limited. Bimal Jalan notes that the share of workers in agriculture and industry was 75.7 per cent and 11.9 per cent respectively in 1951. As the British denied good opportunities for the natives in services and profession, Indians could not go up in large numbers in these areas.
The quality of life was pathetic. The economic indicators compiled by the Government of India reveal that the life expectancy at birth was just 32.1 years during 1950-51. The death rate (per 1000 persons) remained as high as 27.4. The literacy rate was only 18.3, with the female literacy being 8.9. Education was beyond the reach of the major sections of the society. Most of the English educated Indians were conditioned to think like the westerners aping their ways and means, without a proper understanding of the fundamentals and background of the country.
The economy was very poor and underdeveloped. Gross Domestic Product (at factor cost, at current prices) was Rs.9719 crores during 1950-51. Food grains output was 50.8 million tonnes, for a population of 35.9 crores. The availability of food items for the citizens was much less than the actual requirements. Exports from the country were a mere Rs.606 crores, with imports being Rs.608 crores. The foreign exchange reserves of the country stood at Rs.911 crores.
Thus the Indian economy remained in a very bad condition at the time of independence. One has to keep this in mind to understand the background and study the functioning of the economy in the post-independent periods.
1. Paul S Kennedy, The Rise and Fall of Great Powers – Economic Change and Military Conflict from 1500-2000,
Fontana Press, , 1988 London
2. Angus Maddison, The World Economy- A Millennial Perspective, Overseas Press India Limited,
, 2003 New Delhi
3. Bimal Jalan quoted in Daya Krishna, Golden Age to Globalisation – 7000 years of Indian Economy, Swadeshi Jagran Prakashan,
, 2002 New Delhi
4. Will Durant, The Case for
India, Simon and , 1930 Schuster, New York
5. Economic Survey 2009-10, Ministry of Finance, Government of
, 2010 India
( Yuva Bharati, Vol.38, No.8, Vivekananda Kendra, Chennai, March 2011)