A NEW SYLLABUS CHAPTER

BUSINESS ECONOMICS
CHAPTER 10 INDIAN ECONOMICS
-
* To learn thoroughly ,
one

must revise multiple times

Status
Pre-Independence of India
* Period D850-1947) :

1st =
17th centure AD

Medieval world
.
India-Largest Economy -

of Ancient +

Reliant
self
Control World Wet
Erd-4th
of

Village
-
City
-

seef sufficient
centre commerce
of
Pilgrim
Less
opportinely than
city .
Administration

Structure
> labor division
.
-

social-economic difference
as
per
race ,
gender ,
class

main source -

agriculture
.

skilled
handicraft
craftsmanor old.

Ancient Economic
*
Philosophy
Earliest Treatise Arthashastra
-

By Kautilya Chanakya
.

320-296 BE

Statecraft work-political philosophy

Handbook
for -King Chandragupta Marya (Founder-Maurya Empire)
Action for Political
Covered -
Directure (Kindom
g Reign)+ Concern

ethical consideration
no
regard to
-
 Artha-wealth
+

related
-
all material well
being topics
,
Artha -
Science ->Artha (material
Shastra
prosperity)
subsistence
humanely
>
-
means >

of of
wealth
·
importance -
primary
-land-use activities
secondary properly +
agric
f
+
good harvest +
fill state's
beasury
Eoraffair taxes
private state owned busines
·
-
+

Kaulelya Writing multidiscipline

-
* : .

(politics , economics ,
military diplomacy
, ,

state
funcion ,
social
organisation)
True
KingshipI ruler's subordination

meaning To -

His own desire tambition

For
people greatest good
-

-vital elements this Farmland Treasury

of King
=

minister Fortresses
philosophy military
Allies
 British
Shift in Economic
History - Advent
of European
+

1757 -
1858 1858-1947 1947-1991

Rule East India Co British Gov

of
.

Post

Cater
half of 18 century) independence .

#
Cupto major
British Economic
Legacy of Reforms)
calionialem
-

Onset
of Industrial Revolution
/ Britain's
manef capably
increased

·
Their industries needed Raw Material + Market
for Finished Goods (FG)

·
Used India

India's Trade Reversed From

Enposter- Raw Mat
Foreign =>
·

of manufacture Exporter

Indian
Export
[Discriminatory
FG
Heavy Tariff
Britishly
·
:

Tariff policy by
Lower :
Import

Lost
competitivenes
·

Domestic demand a
·
Indian
handicraft Destroyed
- > Ext # .
fell
Lindigenous good)

Hostle impenal Indian

·

competiti Domestic demand

# with
Policy favour
many
t
Shift to
= .

British machine
Sekta
Foreign Goods
(Western
favoured culture) destroyed .
 Village
O Internal balance-traditional
desto
village economy /handicraft +agricultive)
yed .

Impacts
-

d
Unempl
·
.

·
alternate Source X
Livelihood
agriculture
· = now

cheap + Machine made

·

Britain and pressure

import from
·

·
sub division 4
shift Western INDIAN
· Fashion
fragmentation
·
Domestre industries d ·
subsistence
AGRICULTURE
farming
·

productivity d
COLLAPSED
·
land tenure-Zamindari system -
·

poverty
- ·
land demand
A class who perpetuated under
Unancy
·

arose

ie took forward Brelish Rule

·
Zamindar -

Excess rent

·
absenter Landlordisin
·

agriculturist debt

exploitor money lender

measures X
·

productivity

Industrialization British Rule A

During
*

stagnated
based production before 1850
factory
·
no

mid
Modern Industrial enterprisis Colonial India-started 19 cent
-
·
 Ind
-onmilig e
-
Jeste Mills ·

expanded Calcutta
Brewing
I
-
in ,

International
competitivenes will
·

demand paper
global rope
·

Indian Colton mill leather

Industry making
·

late 19th C :
Large 9 million
spindles matches rice
·

=
in 1930 ,

International Market ↓ mill ,

5th
·

position World .

Have
19th c end Indian Jute en
·
·
:

World growth insufficient

Largest India
. Ind
Industry
·
-

J
highest jute Raw Mat
·
No
transformation in Eco structure By British a
Manuf sector (not SS1 cottage) Oth World Rank
·
,
·

NDPshare =
% bad (1946)
7
coutput -

1930)

Factory employm share %

·

=> 1900 : 0 4
.
% Population 1941 = 1 .

4%

industries
20th cent
Beginning producer goods
. -
-

No
-

expansion &
SomeInd-Global standard
·

(goods to produce othergoods)

·

Before Great Depression 12th

:
-

Reason British Discouraged

:

Rank -

Largest industrialized & made Bad Policy for

country
-

those Indian Ind =>

competition with British .

Post
Independence (1947-91)
·
situation
-

India-rural illiterate
deeply stratified heterogenous society
·

, ,
,

1951 :
Literacy = 18 %, life =
32y

poverty
income

human
capital
·
Nehruvian Model-
-
social economic redistribution + industrialization
I

directed state
by
·

Post Indep
dominated
Policy
-
·
 ·

core
of Ind .

Eo
Developmentalized Planni
·

Policymade-reach rapid growth +

Early
-
Distributor Justus
- - -

Commission
·

Planning
↓
India PCI .
formed
·

5 year Plans

Political Do investment
Leadership authority-
·
> C4 #
-

design
. Eco
spalegy (with Put sectors

RapidIndustrialization-core =
Nehru Develop $pategy
Industrialist
Planned Modernisation systematic planning support
·
=> -

Bureaucrat Visioned= State has

+ Technocrat imp role
·
= .

Resolution (1948)
* Industrial
Policy -

roll
of public
sects

Licensing to Put sectar

stratgic areas-atomic

3
energy
·

ammunition
.
monopoly
arms state
,

railway
investment in basic
right to new
industry.
-

1950's aim Mehre vision Gandhiens

policy >
· -

+
socialist+
cottage
·

SSI , ,

heavy industry
Village republic
.

* IPR (1956) :
comprehensive framework-ind. develops .

sid
ButLopsided -
can antage
-

-
Expansion of public sector
Private
↑
- neae
a
 Of
Be Till Late 1950
open Foreign
Must
Policy +
Open Trade
Policy
G 1958 :
Bopcrisis
,
Forex Deplete .

Trade
zigtened
:

Investment reduced
.

Licensing new investment of

Cap Goods
.

import control until 1966.

·
1-1980 3 decade post independence
.

3 5%
India any annul GDP growth % =
Hindu
g. rate
= .

Agriculture -
less
focus ,
not
negent
1 5 decade
focus capgood- (dam powerplant heavy ind)
. -

, ,

Consumer X goods

* A1960

in Ind Eco strategy

Major shifft .

Agriculture -
tell now
= no
priority (2ndplan)
d
-

expenditure
relied on > instlutional model
.
strategy >
= =
-

Land
reform / farm cooperatio
 -
Tech Areas
- /R & D , Irrigation) X
&
-

Producturly
#
failed (1966 67)
monsoon + 2 severe
drought ,

agri sector = ()
growth , food problem

aid (PL 480) scheme

Us
food
H

needed : Quantum
jimep
-
high priority needed
.

Policies
*
Change in
Gout .

Productive Actuates
Old Institution
change X
* Green Revolution
-
agric prods tech food prod
"
*
progress
,

food problem t
&
Meanwhile
, In Trade
Industry
Gort- Extra Admen control

Nationalization WAVE

Banks nationalized 14 (1969) 6 (1980)

-

Interventionist Policies (1960).

 Economic
1965-81 Performance
External shock
Worst in
History productuerly ↓ ·
·

3 war (1962 , 65 71)

License
Ray
&
· ,

1960 700
,

autarchic policies ·

Droughts (1966 , 67

Closed missed world

so
/1973 79)
·

economy Oil shock

-

· ,

nep
I
Results Decelerated Growth I decades

More
-
Bad deluations :

Polices Equitable Distribution

of Income , Wealth
·

of
killed Wealth creation Anti
growth
=

MRTPAct 1969
regulated Big firm /Powerful in market
· -
-

Restricted them- License ,

capacity cannot add M&A ,

acouiselin
merger ,

Big busines avoided

entry from such industries

SIS (Small scale sector)

17 Reservation Policy -

many product
- SSS

aim Labor intensive ↑

economy
· :

: Redistribute income to -low wage earner

Result
T
India-World compete X

cannot do labor intensive

Big firm industry X
. -labor intensive
laws
Tough labor industry can't
go

org. sector
in

-
·
Policymaker-realised
- : these policies productive X
industrialist
+
growth X

EFORM ERA