What was the status of Indian Economy at time of Independence?

India had suffered British colonial Rule for 200 years

The effect was showing on all Sectors of Indian Economy


1. Agriculture Sector

It had extremely low productivity

It also had surplus labor (More people were working in fields than required)


2. Industrial Sector

There was need for

Modernization(Machines used were outdated)

Diversification (Manufacturing was limited to some specific goods)

Capacity Building (Machines were of low capacity and good not produce goods in bulk)

Increased Public Investment (Investment of Government was required to set up large scale industries)



Infrastructure was inadequate

It needed expansion and upgradation


4.Poverty and  Unemployment

There was large scale poverty and unemployment

There was need for Public Welfare in Govt Economic Policy

Status of Indian Economy at Time of Independence - Teachoo.JPG


NCERT Questions

Question 1

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

What were the impacts of these policies?

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Question 13

Underscore some of India’s most crucial economic challenges at the time of independence.

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Question 16

Were there any positive contributions made by the British in India?


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MCQ Other Books

Question 1

In the following questions, select the correct answers:

1 Which of the following was not a positive contribution made by the British government?

  1. Effective Administration Setup
  2. Shift to Monetary Economy
  3. Excellent Industrial Sector
  4. Better means of Transportation
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Question 2

Which of these is true in terms of the Status of Indian economy on the eve of Independence?

  1. Agriculture sector was highly unproductive
  2. Infrastructure was adequate
  3. Industrial sector had outdated machinery
  4. There was large scale employment
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Question 3

During British period, Indian Economy was:

  1. Semi-feudal economy.
  2. Disintegrated economy.
  3. Colonial economy.
  4. All of the above.
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Question 4

Match the items in Column A to that of Column B and choose the correct alternative:

Column A  Column B  
1. Commercialisation of  agriculture   (a) Monopoly control of Britain  
2. Industrial Development during British  rule   (b) Payment of  land revenue  in cash  
3. Foreign Trade on the  eve of independence   (c) Rising share of  Indian capital  
4. Infrastructure on the  eve of independence     (d) Served the British interest
  1. 1 – (a)
  2. 2 – (b)
  3. 3 – (c)
  4. 4 – (d)
View Answer
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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo