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Before British rule, India had an independent economy. Agriculture was the major source of income for the public, and the country's economy was identified by different types of manufacturing industries. India was globally known for its handicraft industries, cotton andamp; silk textiles, and their phenomenal work with metals and precious stonework, etc. These items enjoyed a global market based on recognition of the excellent quality of materials used and the high standards of craftsmanship found in all imports from India.
Indian economy is an agriculture-based economy. This is clear from the fact that the national income of India comprises 70% of the income generated from agriculture. Before independence, 95% of the economy was based on agriculture and the income was generated from agriculture. Besides, around 85% of the population was living in small-town or villages, and the only means of subsistence was agriculture. When talking about agriculture, the condition of the Indian economy, on the eve of independence was demoralizing. Agriculture, even after being the most important sector, was facing economic degradation and stagnation in the economy.
There are various causes for stagnation in India's agriculture sector during the colonial period. Some of these are as follows:
The new system of land tenure introduced by the Britishers had three forms: Mahalwari System, Zamindari System and Ryotwari System. One of the major reasons behind the cause of the stagnation of the Indian agricultural sector was the Zamindari System. The two classes under Zamindari System are Zamindar or landowner and landless cultivators. Zamindars were recognised as the permanent owners of the soil. This agricultural framework was chiefly practised in Bengal, which was the capital of India under British rule. According to this system, most of the profits went to Zamindars rather than cultivators. The Zamindars used to exploit the cultivators by charging high revenue from the agriculturalists, which left the cultivators with insufficient food. They couldn't even get food for their sustenance. Besides, the Zamindars used to force the cultivators to work on their farms.
Despite the fact that there was a shortage of resources, the British rule demanded broad commercialization to get more profits. Commercialization of agriculture means producing agricultural crops with the aim of selling them instead of self-consumption. The British rulers wanted to make this industry advance and go through ‘cultivation for sale’ from the orthodox approaches of ‘cultivation for self’.
In India, where most of the crops were produced for self-consumption, they were then sent to markets for selling. The Britishers made farmers cultivate commercial crops, like Indigo to boost their profits. Undoubtedly indigo is an ideal crop for the commercialized agricultural sector. It proved to be more harmful to India as it damaged the soil fertility to large extent. Also, the Britishers offered higher prices to farmers if they produce cash crops instead of food crops as the cash crops were used by British Industries as raw materials. The increase in the rate of production of more cash crops and less food crops led to various issues in the Indian economy, including frequent famines.
India's partition with Pakistan & Bangladesh resulted in a food crisis all over India as various crop-yielding lands were divided. The partition also created a huge shortage problem of raw materials for the textile mills of Ahmedabad and Bombay, and the jute mills of Calcutta. Besides, areas of West Punjab and Sindh that were rich in food production went to Pakistan, resulting in a food crisis in India.
During British rule, the irrigation facilities and technology of India were not good, and the Britishers did not care about these things. The lack of proper irrigation facilities and technological upgrades reduced the productivity and production of crops in India. These problems forced cultivators or agriculturalists to live in misery.
The main features of India's Agriculture Sector on the Eve of Independence can be summed up as follows: