Q.(Answer any two from questions 20-22) Explain any two challenges faced by the Indian economy on the eve of Independence.
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What Indians Did for a Living in 1947
The "occupational structure" of an economy simply describes how its working population is spread across the three sectors — agriculture (primary), industry (secondary) and services (tertiary). Read this distribution and you can almost see the economy's health: a modern, growing economy shifts workers out of farming into industry and services. On the eve of Independence, India's structure told the opposite story — one of stagnation under colonial rule.
Occupational structure = the distribution of a country's working population across the primary, secondary and tertiary sectors of production.
The Salient Features in 1947
- Overwhelming dependence on agriculture. Roughly 70–75% of the workforce was engaged in the primary sector, yet it generated low output and incomes — a sign of disguised unemployment and subsistence farming rather than a thriving farm economy.
- A tiny industrial base. The secondary (manufacturing) sector employed only about 10% of the workforce, reflecting the deliberate suppression of Indian industry under colonial policy.
- A modest services sector. The tertiary sector accounted for roughly 15–20%, mostly low-productivity trade and personal services.
- Growing regional imbalance. The pattern was not uniform. Regions in the then Madras Presidency, Bombay and Bengal saw a fall in agriculture's share and a rise in manufacturing and services, while parts of Punjab, Rajasthan and Odisha saw agriculture's dependence increase — deepening inequality across the country.
- Little structural change over decades. Crucially, this distribution had barely shifted for a long period, whereas a developing economy should have seen labour steadily migrate to industry and services.
Why This Structure Signalled Backwardness
A healthy transition looks like this: as productivity rises, fewer workers are needed on farms and they move to factories and offices. India was stuck at the starting line: …
British colonial rule left the Indian economy in a deliberately weak and lopsided state at the time of Independence, with a few recurring problems standing out. …
At Independence, India faced a backward agriculture and a de-industrialised economy — both legacies of colonial policy designed to serve British, not Indian, interests.
- Stagnant and backward agriculture: Although agriculture employed the overwhelming majority of the workforce, its productivity was extremely low. Exploitative land revenue systems introduced by the British — the Zamindari system in particular — required zamindars to collect a fixed, high revenue from cultivators for the colonial government regardless of the actual harvest, leaving cultivators with no incentive or surplus to invest in improving the land. This, combined with a lack of irrigation, poor techniques, and widespread indebtedness, kept agricultural output and productivity stagnant. …
- CBSE 2025Set ANNUAL1 markMCQQ.Which of the following factors contributed to the worsening profile of India’s population during the colonial period? (A) Partition of Bengal (B) Land revenue system (C) Decay of handicraft industries (D) Extensive poverty
›Reveal solutionSolution
Among the listed options, it is the extensive poverty prevailing under colonial rule that is identified as the underlying cause of India's poor demographic profile (high mortality, low life expectancy, poor health) at independence.
Demographic indicators such as the crude birth rate (about 48 per thousand), crude death rate (about 40 per thousand), and infant mortality rate (about 218 per thousand) were alarmingly high, while life expectancy was as low as 32 years and literacy was under 16%. This dismal demographic profile is attributed largely to the extensive poverty that characterised the mass of the population under colonial rule -- poverty translated into malnutrition, poor sanitation, lack of access to healthcare, and vulnerability to famines a …
- CBSE 2024Set ANNUAL1 markMCQQ.Indicator that reflects the backward nature of the Indian economy on the eve of independence is(a) literacy rate(b) life expectancy(c) demographic situation(d) mortality rate
›Reveal solutionSolution
The very low life expectancy (about 32 years) at independence is a classic indicator of the backward state of the Indian economy under colonial rule.
Colonial policies kept India economically stagnant: agriculture was technologically backward, industrialisation was deliberately discouraged, and public spending on health and sanitation was minimal. This translated directly into poor human welfare indicators. Among the demographic facts of that period:
- The literacy rate was low (around 16%), but this mainly reflects neglect of mass education, not the overall backwardness of the productive economy by itself.
- Life expectancy was abysmally low — close to 32 years — a direct consequence of poor nutrition, epidemics, and virtually non-existent public health infrastructure, and is the single statistic most commonly cited to show how backward and underdeveloped the economy was for the common person. …
- CBSE 2023Set ANNUAL1 markQ."Between 1950 and 1990, the proportion of GDP of India contributed by agriculture declined significantly but not the population depending on it." Justify the statement.
›Reveal solutionSolution
Between 1950 and 1990, non-agricultural sectors (industry and services) grew faster than agriculture in terms of output, pulling down agriculture's share in GDP — but they failed to create proportionate employment, so the workforce remained stuck in agriculture.
Why GDP share fell: As the economy developed, industry and the services sector grew at a faster rate than agriculture, due to planned investment in industrialization, infrastructure and the public sector. This raised their contribution to GDP much faster than agriculture's, pulling agriculture's share of total GDP down significantly by 1990.
Why the population dependent on agriculture did NOT fall proportionately: The growth in industry and services during this period was capital-intensive rather than labour-intensive, and it was simply not large or fast enough to absorb the growing labour force leaving (or never entering) agriculture. With limited alternative employment opportunities in towns and cities, a very large share of the workforce had no option but to remain dependent on agriculture for their livelihood, even as its productivity and share in national output stagnated.
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- CBSE 2022Set ANNUAL1 markMCQQ.During British rule, decay of Indian handicrafts was caused by—(a) Discriminatory tariff policy of the British Government(b) Competition from machine-made products(c) Change in patterns of demand(d) All of the above. (Choose the correct option)
›Reveal solutionSolution
The decline of Indian handicrafts under British rule was the combined result of discriminatory tariffs, competition from machine-made imports, and shifting demand patterns — so option (d) is correct.
Under British colonial rule, India's world-famous handicraft industries (such as cotton and silk textiles) suffered a sharp decline due to multiple reinforcing causes:
- Discriminatory tariff policy of the British Government — the British imposed heavy duties on Indian goods exported to Britain while allowing British manufactured goods to enter India duty-free or at very low rates, making Indian handicrafts uncompetitive both abroad and at home.
- Competition from machine-made products — the Industrial Revolution in Britain enabled mass production of cheap, machine-made textiles and goods that Indian handicraft producers, working with traditional methods, could not match on price. …
- CBSE 2021Set ANNUAL1 markQ.When was the Planning Commission of India set up?
›Reveal solutionSolution
The Planning Commission was established in 1950 to design and oversee India's Five Year Plans for centralised economic planning.
- The Planning Commission was set up by a Government of India resolution in March 1950, as an advisory (non-constitutional, non-statutory) body directly under the Prime Minister, with Jawaharlal Nehru as its first Chairman.
- Its principal task was to formulate successive Five Year Plans, assessing the country's resources (capital, labour, raw materials) and drawing up a plan for their most effective and balanced utilisation to raise the standard of living and remove unemployment and poverty.
- India's First Five Year Plan under this framework began in 1951, and the Commission continued to draft plans for decades, guiding the mixed-economy, planning-based development strategy India followed from 1950 to 1990 and beyond. …
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