Status of Indian Economy before and During British Rule

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Status of Indian Economy before British Rule (How was India’s Economy Before 1757 during Mughal Rule) Agriculture Sector (Farming) Manufacturing Sector India was also known for Handicraft Industry (Hand made goods ) Cotton and Silk Textiles Metals & Precious Stones There was Worldwide Demand due to Good Quality Material Skilled Craftsman (labour) (Malmal Cloth of Bengal very famous) What was the Economic Policy of Britishers Indian Economic Development Not in Priority Economic Interests of Britain Top Priority India Exported Cotton (Raw Material) Imported Shirts (Finished goods) Britain Purpose was to Reduced India into Raw Material Supplier for British Factories And Customer for Finished Foosa Before British Rule India Exported Foreign Handicraft Goods and Earned Foreign Exchange (Gold) Exported Handicraft goods India World Received Money(Gold) This was good for Indian Industry During British Rule India was both Raw Material Supplier and Customer of Finished Goods India Exported Cotton (Raw Material) Britain Imported Shirts (Finished goods) Indian Industry Suffered Losses British Industry Prospered India’s Real Output Growth During British Rule Actual (Adjusted for Inflation) GDP % Growth Before Independence What is Real Output Growth It is GDP Growth Rate adjusted for inflation Example GDP in 2020 =100000 crores GDP in 2021 = 108000 crore GDP increased by 8000 Cr GDP Growth=8000/100000= 8% Real Output Growth =GDP Growth =8% This was less than 2% During British Rule (Very less Growth) India’s Per Capita Output Growth During British Rule Per Population GDP % Growth Before Independence (Per Capita GDP=GDP/Population) Example Year 2020 Year 2021 GDP 100000 Cr 108000 Cr Population 100 Cr 105 Cr Per Capita Output 1000 /Person 1029/Person Per Capita GDP in 2020 =Rs 1000 Per Capita GDP IN 2021 =Rs 1029 Per Capita GDP increased by 29 Per Capital GDP Growth =29/1000= 2.9% Per Capita Output Growth =2.9% This was 0.5% During British Rule (Very less Growth) What was India’s Real Output Growth & Per Capita Output During British Rule? What is Real Output Growth It is other name of GDP Growth Rate (GDP is Value of Goods and Services Produced in a country) Example GDP in 2020 =100000 crores GDP in 2021 = 108000 crore GDP increased by 8000 Cr GDP Growth=8000/100000= 8% Real Output Growth =GDP Growth =8% This was less than 2% During British Rule (Very less Growth) What is Per Capita Output Growth It is other name of GDP Growth per person (Per Capita GDP=GDP/population) Example Year 2020 Year 2021 GDP 100000 Cr 108000 Cr Population 100 Cr 105 Cr Per Capita Output 1000 /Person 1029/Person Per Capita GDP in 2020 =Rs 1000 Per Capita GDP IN 2021 =Rs 1029 Per Capita GDP increased by 29 Per Capital GDP Growth =29/1000= 2.9% Per Capita Output Growth =2.9% This was less than 0.5% during British Rule (Very less Growth) Who Estimated India’s Real Output & Per Capita Output During British Rule? Estimate by British Govt Estimate by Independent Economists Did not measure Real Output Growth -- less than 2% Per Capita Output Growth -0.5% Dada Bhai Naroji He was first one to estimate National Income in 1868 V.K.R.V. Rao His work considered Most significant