Indian Economy on the Eve of Independence Class 12 Questions & Answers

Class 12 Economics Chapter 1 of the Book - Indian Economic Development - Indian Economy on the Eve of Independence is a critical chapter for understanding the economic history of India. This guide provides important questions and answers to help you better understand the concepts covered in the chapter, including the economic conditions of India before independence, the impact of colonialism on the Indian economy, and the challenges faced by the Indian economy during this time period.

Board	CBSE and State Boards
Class	12
Subject	Economics
Book Name	Indian Economic Development
Chapter No.	1
Chapter Name	Indian Economy on the Eve of Independence
Type	Important Questions and Answers
Session	2023-24

Happiness is not by chance, but by choice.

- Jim Rohn

Chapter 1: Indian Economy on the Eve of Independence Important Questions & Answers

Q. No. 1) Multiple Choice Questions (MCQs)

i. Before the advent of British rule, in which industries did India excel?

a. Handicrafts

b. Cotton

c. Precious stone works

d. All of the above

Ans. Option (d)

ii. Who among the following took attempts to calculate the national income of India on the eve of independence?

a. Dadabhai Naoroji

b. Findlay Shirras

c. V. K. R. V. Rao

d. All of the above

Ans. Option (d)

iii. The colonial government made no sincere attempts to estimate India’s national and per capita income, but most studies found that India’s national income growth in the pre-Independence era was _____, and per capita income growth was _____.

Choose the correct option that can fill in the blanks.

a. Close to 5 percent, more than 2 percent

b. Less than 3 percent, more than 1 percent

c. Close to half percent, almost 0 percent

d. Less than 2 percent, close to half a percent

Ans. Option (d)

iv. Under the British system of land settlement, the zamindar’s dues to the state were fixed. What did this mean for the cultivators?

a. They received investment support to increase production.

b. They were exploited and forced to pay rent regardless of the produce.

c. They had the support of the landlords against the oppressive policies of the British.

d. They were forced to shift from food crops to commercial crops, leading to food scarcity.

Ans. Option (b)

v. Prior to India’s independence, the stagnation in the agricultural sector was mainly caused by _____.

a. Investment in technology

b. Investment in agricultural facilities

c. Advanced infrastructural facilities

d. Land settlement system

Ans. Option (d)

vi. Which of the following is a cash crop?

a. Wheat

b. Rice

c. Cotton

d. None of the above

Ans. Option (c)

vii. Which of the following was not a motive for the economic policies of the colonial government in India?

a. Converting India into a supplier of raw materials to Britain.

b. Promotion of the economic interests of India.

c. Developing India as a market for finished products manufactured in Britain.

d. To expand the modern industrial base of Great Britain.

Ans. Option (b)

viii. Arrange the following event in the correct chronological order:

1. The Year of the Great Divide
2. Establishment of Tata Iron and Steel Company (TISCO)
3. Introduction of Railways in India by the British
4. Opening of Suez Canal

Options

a. 4, 2, 1, 3

b. 1, 4, 3, 2

c. 2, 3, 4, 1

d. 3, 4, 2, 1

Ans. Option (d) [Railways - 1850, Suez Canal – 1869, TISCO – 1907, Year of the great divide – 1921]

ix. When was TISCO incorporated?

a. 1907

b. 1908

c. 1906

d. 1909

Ans. Option (a)

x. Which of the following is correct in respect of the public sector on the eve of independence?

a. A large public sector was operational

b. The public sector excluded railways and ports.

c. Limited area of operation of the public sector.

d. It made a significant contribution to the new industrial sector.

Ans. Option (c)

xi. In which of the following ways did the British Raj impact the Indian economy the most?

a. The British made India an exporter of cotton from an exporter of cloth which led to large-scale unemployment.

b. The establishment of railways by the British provided short-term employment for many Indians.

c. The British expanded their army with Indian sepoys and fought in wars overseas.

d. The British provided tax concessions to rural farmers and landless laborers.

Ans. Option (a)

xii. Identify, which of the following indicates the adverse impact of British rule in India.

a. Introduction of communication networks in India.

b. Change in composition of India’s foreign trade

c. Introduction of the modern administrative system in India.

d. Introduction of railways in India

Ans. Option (b)

xiii. Assertion (A): India became an exporter of primary products and an importer of finished consumer and capital goods produced in Britain.

Reason (R): Restrictive policies of commodity production, trade, and tariff pursued by the colonial government adversely affected the structure, composition, and volume of India’s foreign trade.

Options

a. Both A and R are true and R is the correct explanation of A

b. Both A and R are true and R is not the correct explanation of A

c. A is true but R is false

d. A is false but R is true

Ans. Option (a)

xiv. Identify the result of the large export surplus during the colonial period.

a. Domestic markets flooded with raw materials

b. An increase in gold and silver reserves

c. Scarcity of essential commodities

d. Cheap imported consumer goods

Ans. Option (c)

xv. In the Swadeshi movement against the British, which started in 1905, Indians started ditching British goods for Indian products.

Which of the following would have been the likely impact of the movement?

P: rise in import of raw materials

Q: fall in imports from Britain

R: rise in production of goods in India

S: rise in export tariffs

Options

a. Only P and R

b. Only P and S

c. Only Q and R

d. Only R and S

Ans. Option (c)

xvi. Assertion (A): The establishment of the Suez Canal intensified Britain’s control over India’s foreign trade.

Reason (R): The Europeans no longer had to travel around Africa to reach India.

Options

a. A is true but R is false

b. A is false but R is true

c. Both A and R are true and R explains A

d. Both A and R are true and R does not explain A

Ans. Option (c)

xvii. In which year was India’s first Official Census conducted?

a. 1881

b. 1891

c. 1921

d. 1931

Ans. Option (a)

xviii. India entered the _____ stage of Demographic Transition after the year 1921.

a. Forth

b. Second

c. Third

d. First

Ans. Option (b)

xix. Which one of the following witnessed increase during the British rule in India?

a. Infant mortality rate

b. Literacy rate

c. Female literacy

d. Life expectancy

Ans. Option (a)

xx. During the time of Indian independence what was the literacy rate of our country?

a. Less than 15%

b. Less than 14%

c. Less than 16%

d. Less than 7%

Ans. Option (c)

xxi. During the time of Indian Independence what was the IMR?

a. 216

b. 214

c. 218

d. 220

Ans. Option (c)

xxii. In 1951, _____ of the working population was dependent on agriculture.

a. 40%

b. 50%

c. 65%

d. 75%

Ans. Option (d) [Manufacturing: 10%, Service: 15-20%]

xxiii. Which among the following state did not witness an increase in the workforce in the manufacturing and service sector during British India?

a. Tamil Nadu

b. Karnataka

c. Kerala

d. Punjab

Ans. Option (d)

xxiv. Assertion (A): The British introduced railways in India in 1850, which is considered one of their most important contributions.

Reason (R): The British had India’s best interests in mind while developing the infrastructure.

Options

a. A is true but R is false

b. A is false but R is true

c. Both A and R are true and R explains A

d. Both A and R are true but R does not explain A

Ans. Option (a)

Q. No. 2) What policies of the colonial government led to a low level of economic development during the pre-independence period?

Ans. The policies of the colonial government that led to a low level of economic development during the pre-independence period were:

• Economic policies of the colonial government aimed at the protection and promotion of colonial economic interests.
• India became a supplier of raw materials to British industries.
• India became a consumer of finished industrial products from Britain.

Q. No. 3) What was the condition of the agriculture sector at the time of Independence?

Ans. Condition of Indian agriculture on the eve of Independence:

• Slow growth and low productivity.
• Prevalence of the Zamindari system
• Low level of technology
• Lack of irrigational facilities and negligible use of fertilizers
• Lack of investment in terracing, flood control, drainage, and desalinization of soil.

Q. No. 4) State the reasons for low agricultural productivity during the colonial period.

Ans. Reasons for low agricultural productivity during the colonial period:

• Land settlement systems: Under the zamindari system, the zamindars exploited the cultivators. They were only bothered about rent collection rather than improving the condition of the land.
• Terms of Revenue settlement: The terms of revenue settlement forced the Zamindars to act in the above manner. Dates for depositing specified sums of revenue were fixed, failing which the zamindars were to lose their rights.
• Low level of technology
• Lack of irrigation facilities
• Negligible use of fertilizers
• Lack of investment in terracing, flood control, drainage, and desalinization of soil.

Q. No. 5) What were the aims of economic policies pursued by the colonial government in India?

Ans. The main aims of the economic policies pursued by the colonial government in India were:

• Protection and promotion of British economic interests.
• Systematic deindustrialization leading to a stagnant economy.
• Making India a raw material supplier for the upcoming modern industries in Britain.
• Making India a sprawling market for the finished products of those industries.

Q. No. 6) What was the condition of the Industrial sector at the time of Independence?

Ans. Condition of the Industrial sector at the time of Independence:

• The decline of handicraft industries.
• The colonial government wanted to systematically deindustrialize India to
  1. Reduce India to the status of a mere exporter of raw materials for the industries in Britain.
  2. Turn India into a sprawling market for the finished products of those industries.
• A few industries came up like cotton and jute textile mills, iron, and steel apart from manufacturing units.
• Poor contribution of the industrial sector to the GDP
• Limited expansion of public sector industries. This sector was confined only to the railways, power generation, communications, ports, and some other departments.

Q. No. 7) Trace the growth of the modern industry in the second half of the nineteenth century.

Ans. During the second half of the nineteenth century, modern industry began to flourish slowly.

• Cotton and jute textile mills were set up.
• The cotton textile mills were located in the western parts of the country, namely, Maharashtra and Gujarat.
• The jute textile mills were concentrated in Bengal.
• The Tata Iron and Steel Company (TISCO) was incorporated in 1907.
• A few other industries like cement, paper, sugar, etc. came up later.
• The contribution of the industrial sector to GDP was very small.

Q. No. 8) Define the capital goods industry.

Ans. The capital goods industry means industries that can produce machine tools which are, in turn, used for producing articles for current consumption.

Q. No. 9) What was the condition of foreign trade under British rule?

Ans. The condition of foreign trade under British rule:

• India became an exporter of primary products such as raw silk, cotton, wool, sugar, indigo, jute, etc., and an importer of finished consumer goods like cotton, silk and woolen clothes, and capital goods.
• British maintained monopoly control over India’s exports and imports.
• The opening of the Suez Canal further intensified British control over India’s foreign trade.
• Generation of a large export surplus which was used to meet various administrative and war expenses of the British government and not for the development of India.

Q. No. 10) What factors helped the colonial government maintain monopoly control over India’s trade?

Ans. The colonial government maintained a monopoly over India’s trade:

• More than half of India’s foreign trade was restricted to Britain while the rest was with China, Ceylon (Sri Lanka), and Persia (Iran).
• India was made an exporter of raw materials and an importer of finished consumer goods and capital goods.
• The opening of the Suez Canal further helped to intensify British control over India’s foreign trade.

Q. No. 11) What was the implication of the huge export surplus generated from India’s foreign trade?

Ans. The generation of a large export surplus came at a huge cost to the country’s economy:

• Several essential commodities – food grains, clothes, kerosene, etc. were scarcely available in the domestic market.
• The export surplus did not result in any flow of gold or silver into India.
• The export surplus was used to make payments for the administrative expenses of the British, war expenses, and import of invisible items (leading to the Drain of Indian Wealth).

Q. No. 12) Which year is regarded as the ‘Year of the Great Divide’ and what is its significance?

Ans. The year 1921 is regarded as the ‘Year of the Great Divide’.

Significance:

• Before 1921, India was in the first stage of demographic transition (i.e., both the birth rate and death rate remained very high).
• After 1921, India entered into the second stage of demographic transition characterized by a high birth rate but decreasing death rate.

Q. No. 13) Give a quantitative appraisal of India’s demographic profile during the colonial period.

Ans. The main features of India’s population during the colonial period were:

• India entered the second stage of demographic transition after 1921.
• The overall literacy level was less than 16%. (Female literacy rate was 7%).
• Public health facilities were either unavailable or inadequate.
• The overall mortality rate was very high.
• Alarming infant mortality rate (218/1000).
• Life expectancy was also very low – 32 years.

Q. No. 14) “During the colonial period, a number of socio-economic indicators were in a dilapidated state.” List any three such indicators that led to the worsening of India’s demographic profile.

Ans. Three such socio-economic indicators are:

• The overall literacy level was less (below 16%)
• Life expectancy was very low (32 years)
• Alarming infant mortality rate (218/1000).

Q. No. 15) Highlight the salient features of India’s pre-independence occupational structure.

Or,

“The pre-independent India’s occupational structure experienced growing regional variation.” Justify the above statement with a valid explanation.

Ans. The salient features of India’s pre-independence occupational structure were:

• Greater dependence on primary activities.

Sectors	% of the workforce engaged
Agriculture	70-75
Manufacturing	10
Services	15-20

• Regional variations in occupational structure: Parts of the then Madras Presidency, Bombay, and Bengal witnessed a decline in the dependence of the workforce on primary activities with a commensurate increase in the manufacturing and 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.

Q. No. 16) Discuss the impact of Railways on the Indian economy during British rule.

Ans. The British introduced railways in India in 1850.

Impacts:

• It enabled people to undertake long-distance travel and thereby break geographical and cultural barriers.
• It fostered the commercialization of Indian agriculture which adversely affected the self-sufficiency of the village economies in India.
• The volume of India’s exports expanded but its benefits did not accrue to the Indian people.

Q. No. 17) What objectives did the British intend to achieve through their policies of infrastructure development in India?

Ans. The British government intended to achieve the following objectives through infrastructural development:

• Railways were developed to market the finished products into the interiors of India.
• Roads were constructed to mobilize the army within India and for carrying raw materials from the countryside to the nearest railway station or port to send them to England.
• The post and telegraph were developed to serve the objectives of maintaining law and order situation in India.

Q. No. 18) Were there any positive contributions made by the Britishers in India? Discuss.

Ans. Yes, the positive contributions made by the Britishers in India were:

• The development of roads and railways opened up new opportunities for economic and social growth.
• British rule helped the Indian economy to shift from a barter system of exchange to a monetary system of exchange.
• Modernization of agriculture: The British introduced modern agricultural practices, such as the cultivation of cash crops like tea, coffee, and cotton, which helped in the development of the agriculture sector in India.

Also Read: Indian Economy on the Eve of Independence Class 12 Notes

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