What was the focus of the economic policies pursued by the colonial government in India? What were the impacts of these policies?

Question

Accepted Answer

The economic policies pursued by the colonial government in India were concerned more with the protection of the economic interests of their home country than with the development of the Indian economy.

**Focus of the colonial policies:**

The main focus of the colonial economic policies was to use the Indian economy as a feeder economy for the development of the British economy. Such policies brought about a fundamental change in the structure of the Indian economy, transforming the country into a supplier of raw materials and a consumer of finished industrial products from Britain. The British exploited India's natural as well as human resources for the glory of their own country, and their two-fold strategy of de-industrialisation reduced India to a mere supplier of cheap raw materials and a ready market for British finished goods.

**Impacts of these policies:**

1. **Backward agriculture**: Agricultural practices remained backward. The land settlement systems, commercialisation of agriculture and lack of investment left agriculture stagnant, with low productivity and frequent famines.

2. **Net supplier of raw materials**: India became the net supplier of raw materials to British industries and a consumer of finished goods from Britain, which ruined the country's handicraft and cottage industries.

3. **Insignificant growth in GDP**: There was insignificant growth in GDP. The growth of aggregate real output during the first half of the twentieth century was less than 2 percent, with only 0.5 percent growth in per capita output per year.

4. **Low national and per capita income**: India suffered from low national and per capita income, and the country's economic condition deteriorated steadily under colonial rule.

5. **Lack of industrialisation**: There was a lack of industrialisation. No priority was given to the development of basic, heavy or capital goods industries, and the public sector remained confined to railways, power, communications and ports.

Thus, the colonial policies left India a poor, backward, stagnant and de-industrialised economy, which faced the twin challenges of poverty and underdevelopment at the time of independence.