Explain any four characteristics of the Indian economy at the eve of independence.

Question

Accepted Answer

Four characteristics of the Indian economy at the eve of independence were:

1. The Indian economy was colonial in character, in the sense that it had developed an industrial structure and a trade pattern that served only the interests of its colonial master.

2. The economy was neither wholly feudalistic nor capitalistic. It was a semi-feudal economy, which had inherited the features of both the feudal system of landlord-tenant relations and the capitalist system of capitalists and labourers.

3. The economy remained largely stagnant during the British rule. The growth of aggregate real output during the first half of the twentieth century was less than 2 percent, and the growth in per capita output was only about 0.5 percent per annum.

4. The Indian economy had become a depreciated economy. To meet the requirements of production during the Second World War, machinery and equipment were used very intensively, resulting in a high degree of wear and tear, i.e., depreciation, without any arrangements being made to replace them.