Economics · Ch 7 — Indian Economy on the Eve of Independence
Introduction
Introduction
Victor Alexander Vruce, the Viceroy of British India in 1894
"India is the pivot of our Empire… If the Empire loses any other part of its Dominion we can survive, but if we lose India, the sun of our Empire will have set."
That single remark captures how completely Britain's own fortunes depended on holding on to the Indian economy — which is exactly why this chapter, before looking at India's economy today, first asks what shape that economy was actually in on the eve of Independence, and why it was in that shape.
To understand the Indian economy as it stands today, one must first look at where it came from. The country's present economic structure was not shaped overnight; its roots reach deep into history, especially into the roughly two centuries when India was ruled by Britain before winning independence on 15 August 1947.
What this chapter covers
- Getting familiar with the actual state of the Indian economy in 1947, the year of Independence.
- Understanding the factors that pushed the Indian economy into underdevelopment and stagnation under colonial rule.
Why study the colonial past
- The purpose of studying India's economic development is to grasp the basic features of the economy in the years following Independence.
- But knowing the present and planning for the future both require knowing the past. The considerations that shaped India's post-independence development strategy were themselves a response to the conditions left behind by colonial rule.
The nature of British rule
The central aim of British colonial rule was to turn India into a supplier of raw materials for Britain's own fast-growing modern industries, and into a market for Britain's finished goods. This relationship was fundamentally exploitative. Recognising that exploitative character is essential before one can fairly judge the kind and level of development the Indian economy managed to reach over the seven and a half decades since Independence.