1) Big picture: what “colonial economy” means
Colonialism reshaped India’s economy to serve British interests. The economy became:
- export-oriented in primary products,
- import-dependent for manufactured goods,
- structurally constrained in industrial growth.
Key idea for CUET PG: colonial policy altered institutions, trade pattern, and surplus extraction.
2) Core features of the colonial Indian economy
2.1 Low productivity and stagnant growth
- Traditional technology in agriculture and artisanal industry.
- Limited capital formation; weak incentives for domestic industrialization.
2.2 Dual economy and structural distortions
- Large subsistence agriculture sector.
- Small modern enclaves (railways, ports, plantations) largely geared to colonial trade needs.
2.3 Trade pattern: primary exports, manufactured imports
- Exports: raw cotton, jute, tea, indigo, opium (varied by period).
- Imports: textiles, machinery, other manufactured goods. Result: India’s industrial base weakened relative to Britain.
3) Land revenue systems and their economic impact (high-yield)
Colonial land revenue policies influenced incentives, tenancy, and rural distress.
3.1 Permanent Settlement (Zamindari)
- Introduced mainly in Bengal.
- Zamindars collected rent; fixed revenue to state. Impacts:
- High rents and insecurity for cultivators.
- Weak incentive for productivity-enhancing investment.