CHAPTER-1-INDIAN ECONOMY ON THE EVE OF INDEPENDENCE

CASE STUDY BASED QUESTIONS

1
Read the following hypothetical text and answer the given questions: -

Before colonial period, India was exporting manufactured goods which enjoyed
worldwide demand. Under the colonial rule, India was reduced to a supplier of raw
materials like jute, cotton, indigo, wool, sugar etc. and importer of finished consumer
goods like silk and woolen clothes and light machinery manufactured in the factories of
Britain. Additionally, the opening of Suez Canal intensified this control of Britishers over
Indian foreign trade. The remaining volume of foreign trade was allowed with a handful
of countries namely China, Ceylon (Sri Lanka) and Persia (Iran). Interestingly, even this
trade was heavily monitored by the colonials. As a matter of fact, there was a large
generation of export surplus under the British Raj. India was a large exporter in the
colonial period. However, it did not affect the country’s economy. Commodities like food
grains, cloths, kerosene hit the country hard with its scarcity. Ironically, this export
surplus never made its way to India.

1. The opening of Suez Canal served as a direct route for ship operating between:

a) India and America

b) India and Sri Lanka

c) India and Pakistan

d) India and Britain

2. “The export surplus was used for the welfare of Indian Industry.” a) True b) False

3. (A): India became an exporter of primary products and an importer of finished

consumer and capital goods produced in Britain.

(R): Restrictive policies of commodity production, trade and tariff structure, composition
and volume of India’s foreign trade.

a) Both Assertion (A) and Reason (R)are true and Reason (R) is the correct explanation of
Assertion (A). b) Both Assertion (A) and Reason (R) are true and Reason (R)is not the
correct explanation of Assertion (A)

c) Assertion (A) is true but Reason (R) is false.

d) Assertion (A) is false but Reason (R)is true.

1|Page 8 October 2021,ZIET BHUBANESWAR

 4.Which country had the maximum control over India foreign trade during colonial
period.

a) America

b) China

c) Ceylon

d) Britain

2
Read the following hypothetical text and answer the given questions: -

The various social development indicators were also not quite encouraging. The overall
literacy level was less than 16 per cent. Out of this, the female literacy level was at a
negligible low of about seven per cent. Public health facilities were either unavailable to
large chunks of population or, when available, were highly inadequate. Consequently,
water and air-borne diseases were rampant and took a huge toll on life. No wonder, the
overall mortality rate was very high and in that, particularly, the infant mortality rate was
quite alarming—about 218 per thousand in contrast to the present infant mortality rate
of 63 per thousand. Life expectancy was also very low—44 years in contrast to the
present 66 36 years. In the absence of reliable data, it is difficult to specify the extent
of poverty at that time but there is no doubt that extensive poverty prevailed in India
during the colonial period which contributed to the worsening profile of India’s
population

1. Which year is described as a “year of Great Divide”?

a) 1931

b) 1921

c) 1941

d) 1911

2. What were the causes of higher infant motility rate during the British period?

a) Poor health care

b) Lack of education

c) Traditional outlook of society

d) All of above

3. During colonial period, India’s demographic profile showed:

a) High birth rate

b) High death rate

 c) High infant mortality

d) All of these

3 Although India was a very independent economy before the British rule, towards the
end, it was exhausted. The Indian economy on the eve of independence was struggling
to find the path of development. The policies formulated by Britishers were only to
promote their interests, India was diverging from the path of prosperity. We were mere
raw-material suppliers to the British. They made use of our labour without treating them
well.
The 200 years of British rule also took away our will to gain knowledge and
awareness. Since we were their slaves, we never got the right to proper education. And
as a result of these actions, towards the end of their reign, we were illiterate. The
Indian economy on the eve of independence was full of people who had absolutely no
plan as how to help the nation.
1. Indian economy was..........on the eve of Independence.

A) Developed

B)Underdeveloped
C)Backward
D)Both (B) and (C)
2. Which of the following stands true for India’s Consumption of Trade?

A)India was the net exporter of raw material.

B) India was the easy market for finished goods.

C) Both (A) and (B)

D) Neither (A) nor (B)

3. Which of the following was the contribution of Britishers in case of Social

Infrastructure in India?
A) Telegraphs and posts were introduced.

B) English was introduced as a medium of language.

C)Hospitals and medical colleges were set up.

D)New housing societies were constructed.
4 India has seen a long and rich history of handicrafts. Years and years of evolution and
refinement have made it possible for India to retain a coveted spot in the handicrafts
landscape of the world. Where the ancients were exemplary in their craft, the
contemporary craftsmen are adept in using the knowledge of the ancients by adding
modern craft techniques to them. They have carefully preserved this age- old art that
represents dignity, style and beauty of the Indian culture.
Voyaging through the lanes of Indian handicrafts is a tempestuous affair. There are
seen striking ups and downs throughout the late 2000s, had a grave impact on
handicrafts industry.
Despite the growth of handicraft industry in India and the measures taken by the
government to promote handicrafts, the average earning of a craftsman when compared
to that of other fields is very low. Hence, the younger generation is moving to other
fields with only the elder craftsmen being left behind. The country needs younger
generation of craftsmen to carry on the tradition of handicrafts, and this is possible by
ensuring the assistance of craftsmen to improve their techniques, availability of quality
raw materials, direct marketing channels, credit and better wages and providing them
with socio- economic benefits.
1 India had a world wide reputation of………………
A)Handicrafts
B)Landscape
C)Labour
D) None of these
2. During British rule, Indian handicrafts were discouraged by.........on their exports.

A)Higher tariff
B)Nawabs
C)Giving subsidies
D)None of these
3. To preserve handicrafts industry and to promote it, the country should encourage

younger generation of craftsmen helping them with:

A)Availability of quality raw materials
B)Better wages
C) Direct marketing channels

D) All of the above

5 During the second half of the nineteenth century, modern industry began to take root
in India but its progress remained very slow. Initially, this development was confined
to the setting up of cotton and jute textile mills. The cotton textile mills, mainly
dominated by Indians, were located in the western parts of the country, namely,
Maharashtra and Gujarat, while the jute mills dominated by the foreigners were
mainly concentrated in Bengal. Subsequently, the iron and steel industries began
coming up in the beginning of the twentieth century. The Tata Iron and Steel
Company (TISCO) was incorporated in 1907. A few other industries in the fields of
sugar, cement, paper etc. came up after the Second World War.
1. When did the modern industry begin to take root in India?

2. Which country had command over cotton mills?

3. Who is the founder of TISCO and when was it come into existence?

4. What was systematic by Britishers ?

6 In the second half of the 19th Century both the direct administration of India by the
British crown and the technological change ushered in by the industrial revolution had
the effect of closely intervening the Economics of India and the Great Britain in terms
of trade. Britishers through their policy of tariff discrimination ensure that they maintain
monopoly control over India's foreign trade also the British raj invested heavily in
infrastructure including canal and irrigation systems in addition to Railway’s telegraphy
road and ports.
However during the British raj the India experienced some of the major health
challenges like Cholera typhoid tuberculosis etc. The British government of
United India influenced Indian culture and social infrastructure noticeably. The
most noticeable influence is the English language which emerged as the
administrative and lingua franca of India.
Based on the above passage answer the following questions:
1. Which of the following appropriately define the tariff discrimination policy
of the British government of India:
a) Tariff free export of Indian Handicrafts.
b) Tariff free export of raw materials to Britain.
c) Tariff free imports of finished goods.
d) Both B and C.

2. Which of the following appropriately define the objective of Britishers

for making heavy investment in Indian economic infrastructure?
a) They wanted to make India a developed Colony of Britain.
b) They wanted to bring India on the path of growth and development.
c) They wanted to strengthen their administrative control over India.
d) None of the above
7 Despite being the occupation of such a large population on the agricultural sector
continued to experience stagnation and not infrequently unusual deterioration.
Agricultural productivity became low though, in absolute terms the sector experienced
some growth due to the expansion of the aggregate area under cultivation. This
stagnation in the agricultural sector was caused mainly because of the various system of
land settlement system that were introduced by the colonial government.
Based on the passage above answer the following questions:
1. Which of the following describes the state of Indian agriculture on the
eve of Independence?
a) lack of mechanised means of cultivation
b) output produced per hectare of land was low
c) division of land into small pieces
d) all of the above
2. Which of the following explains the concept of forced
commercialization of agriculture?
a) production was done for self-consumption
b) farmers were paid to produce cash crops
c) it referred to production of crops for the sale in the market
d) farmers were forced to grow crops like wheat and rice

8 Basic infrastructure such as railways, ports, water transport, posts and telegraphs
developed under the British rule. However, the intention was not to provide amenities to
Indian population but to satisfy colonial interests. The infrastructural development during
British rule and the motives behind them were, Roads were built primarily to serve the
purposes of mobilising the army within India and drawing out raw materials from the
countryside to the nearest railway station or the port for export.Railways were
introduced in India in 1850 to assist British industries in widening the market for their
finished goods.The aim of developing postal and telegraph was to enhance the efficiency
of British administration.

a) The measures taken for developing water and air transport were
.(satisfactory/non satisfactory)

b) The most important contribution of the British rule was to introduce .

i) Roads
ii)Railways
iii) Air and water transport
iv) Telegraph service

c) Railways were introduced by the Britishers to provide a means of

transportation for the population of India as well to connect villages for their
development.(True/False)

d) Introduction of telegraph served the purpose of maintaining law and

order.(True/False)
9 The sole purpose of the British colonial rule in India was to reduce the country to being
a raw material supplier for Great Britain’s own rapidly expanding modern industrial base.
India was particularly well known for its handicraft industries in the fields of cotton
and silk textiles, metal and precious stone works etc. These products enjoyed a
worldwide market based on the reputation of the fine quality of material used and the
high standards of craftsmanship seen in all imports from India. The economic policies
pursued by the colonial government in India were concerned more with the protection
and promotion of the economic interests of their home country than with the
development of the Indian economy. Such policies brought about a fundamental change
in the structure of the Indian economy — transforming the country into supplier of raw
materials and consumer of finished industrial products from Britain.

1. Which of the following statements is not true?

A. The sole purpose of the British colonial rule in India was to reduce the country
to being a raw material supplier
B. Great Britain’s own rapidly expanding modern industrial base helped the Indian
economy to develop its industrial base.
C. The Indian economy transformed into a supplier of raw materials and consumer of
finished industrial products from Britain.
D. The economic policies pursued by the colonial government in India were concerned
more with the protection and promotion of the economic interests of their home country
2. British colonial rule in India brought a fundamental change in the structure of
the Indian economy. This change was:
A. India became the supplier of finished products
B. India became the importer of raw material
C. Both A and B are correct
D. Both A and B are incorrect
3. India was well known for which of the following handicraft industries?
A. Leather industry
B. Iron and steel industry
C. Metal industry
D. All of the above

10 During the colonial period, the occupational structure of India, i.e., distribution of working
persons across different industries and sectors, showed little sign of change. The
agricultural sector accounted for the largest share of the workforce, which usually
remained at a high of 70- 75 per cent while the manufacturing and the services sectors
accounted for only 10 and 15-20 per cent respectively. Another striking aspect was the
growing regional variation. Parts of the then Madras Presidency (comprising areas of the
present-day states of Tamil Nadu, Andhra Pradesh, Kerala and Karnataka), Bombay and
 Bengal witnessed a decline in the dependence of the workforce on the agricultural sector
with a commensurate increase in the manufacturing and the services sectors. However,
there had been an increase in the share of the workforce in agriculture during the same
time in states such as Orissa, Rajasthan and Punjab.
1. Which among the following is considered as part of the structural composition of an
economy?
A. Agriculture and related activities
B. Manufacturing
C. Services
D. All of above
2. States such as Orissa, Rajasthan and Punjab experienced an increase in the share of the
workforce in agriculture during the colonial rule because of growth of the industrial
and service sector. State true or false.

3. Development of infrastructure by the Britishers was done to develop india. State true
and false

4. The contribution made by the British in India has been totally negative. State true
and false

ANSWER

1.
1 (d) India and

Britain 2 (b)False

3 (a) is correct answer

4. d) Britain

2.
1. b) 1921

2. d) All of above

3. d) All of these

3 1. D)Both (B) and (C)

2. C)Both (A) and (B)

3. B)English was introduced as a medium of language.

4 1. A)Handicrafts

2. A)Higher tariff

3. D)All of the above

5 1. During the second half of the nineteenth century.

2. India
3. Jamshedji Tata, 1907
4. De-industrialization
6 1. D-Both B and C.
2.C
7 1. D
2.C
8 1. Non Satisfactory

2. Railways

3. False

4. True

9 1-B

2-D

3-C

10 1-D

2- FALSE

3- FALSE

4- FALSE

PREPIRED BY : PGT ECONOMICS OF BHUBANESWAR, GUWAHATI,

KOLKATA, RANCHI, SILCHAR AND TINSIKIA REGION.