1.  Poverty
Ans : Poverty may be defined as the inability to secure the minimum consumption requirements for life, health and efficiency.

2.  Inequality
Ans : Inequality may be defined as a situation where a small minority of the society holds greater proportion of the income yielding assets and a vast majority of the society holds only few such assets.

3.  Unemployment
Ans : Unemployment may be defined as a situation when people who are willing to work and able to work do not find employment.

4.  Density of population
Ans : Density of population refers to the number of people per square kilometer

5.  market Economy
Ans : A market economy may be defined as a money economy where the commodities are valued in money, and purchases and sales, borrowings and repayments and other transactions are affected by using money as the medium of exchange.

6.  Joint Family System
Ans : The Joint Family System had enormous consequences on the Indian economy of early days.  In this system people related to the closest ties of blood live together under one roof.  Here the members of the family pooled their resources and maintained the family out of the common fund.  The Joint Family System had a number of advantages.  One main advantage was that Weal or Woe was borne by the group entirely.  The system also gave protection to helpless persons, old men, widows etc and exhibited a spirit of selfishness and sacrifices among the members of the group.  In a joint Family, sub-division and fragmentation was avoided, for the whole plot belonged to the family.  It was also economical to have one establishment for the whole family.  The disadvantages of Joint Family were many.  The head of the family prevented initiative among the members of the family.  People lost the incentive to work as the members knew that the fruits of labour would be shared by all.  Further, it contributed to immobility of the Indian population and prevented entrepreneurship.  Still further, unscrupulous members of the family took to grambling with the family property.  This led to discords and strife in the family.

7.  Caste System in India
Ans : The organisation of society, religion and law exercised a considerable influence on the economy of the country before the advent of the British rule.  The caste system originated in the Epic age as a functional division of society.  Each caste performed a particular occupation.  Thus, there were artisans who identified themselves in classes and castes as carpenters, weavers, potters, washermen, cobblers, barbers etc, whose occupations where the economic organisation of society was simple.  Again, in earlier times, the castes worked like the guilds of medieval Europe.  The provided for the training of apparentices and operated as mutual benefit societies.  Whatever might have been merits of the caste system, it had its own drawbacks and inherent weaknesses.  The caste system determining the occupation, divided the society into water tight compartments which resulted in congestion in some occupations and shortage of manpower in others.  Further it proved a fetter on material progress.

8.  Poverty
Ans : It is very difficult to define the term 'poverty' as there is nothing absolute about poverty.  The concept is essentially a relative one.  In the materialistic sense, a poor person is one who lacks means to process necessities of life.  Though it appears to be a straight forward definition, in fact it is not so, because there is no universal agreement on what necessities of life are.  The situation becomes even more complex and complicated because inadvertently 'money' is, considered synonymous with 'means' in the above definition.  Here it is not the word 'money' but the word 'more money' which implies the concept of poverty.  It is always relative.  As for example, 'A' who is starving is not poor in isolation.  Whereas he is poor when compared to 'B' who has something to eat.  Again going a step further, 'B' is poor when compared to 'C' who is having not only plenty of food, but also good food.  Thus the concept 'Poverty' is purely relative.  Consequently, drawing a poverty line becomes more or less an arbitrary proposition.  However, for quantifying the extent of poverty, economists adopt some economic indicators or measures to indicate the number of people below the poverty line.  Generally, income of the people is taken as the indicatory of poverty or affluence.  Sometimes, spending or per capita expenditure is taken as the indicator of poverty.  Some take the 'intake of food' and the 'standard of living' in measuring the extent of poverty.  Whatever may be the index taken to measure the extent as poverty, it is to be understood that the term poverty is not an economic abstraction, but a human condition.  It is despair, grief and pain which cannot be measured.

9.  Poverty Line
Ans : Poverty line is a relative term.  Its nature and magnitude differ from country to country.  In a developing country like India, it may defined with reference to a minimum level of living or a bare subsistance level of living.  This includes necessaries of existence such as minimum food, shelter and clothing.  In India, poverty is measured in terms of food consumption.  The working group consiting of Prof. Gadgil, Dr. V. K. R. V Rao, Dr. P. S. Lokanathan, Dr. Gangulu and Asok Mitra worked out the poverty line in India and recommended a standard of private consumption at Rs. 240/- per capita per year at 1960-61 prices as the barest minimum.  This means a person consuming less than 67 paise worth of food is considered to be living below the poverty line.  Based in this criterion 58% of the population were living below the poverty line during the period 1953 to 1958 and 48% of the population where living below the poverty line in 1967-68.  According to the estimates of Planning Commission, the barest minimum for a person to live is 2400 calories of food per day in rural areas and 2100 calories in Urban area.  Based on the estimate the commission has fixed, at 1984-85 prices Rs 107 per capita per month for rural people and Rs. 122 for urban people to satisfy the above mentioned calories requirements.  People who do not have such income are said to be living below the poverty line.  On this basis the planning commission has drawn the poverty line for an average household of five persons at Rs. 6420 per year in rural areas and Rs. 7340 in urban areas in 1984-85.  Families whose income is less than this are considered to be below the poverty line.  On this basis, the total population below the poverty line in 1990-91 was 29 percent.  The planners are optimistic and they are under the hope of bringing down the percentage of people to 5% by 2000 AD.

10.  Unemployment
Ans : It is very difficult to define precisely 'Unemployment' and 'employment' although we know from common usage what they mean.  Employment would be "full" literally when every able bodied adult worke the number of hours considered normal for a fully employed person.  Prof. Pigou defined fully employment as one when everybody, who and the ruling rate of wages wishes to be employed is in fact employed".  From the point of view of economy as a whole, unemployment means inefficient utilization of human resources resulting in lower pproduction and consequently lower standard of living.  The effect of unemployment is very serious.  Besides reducing the standard of living, it may affect the morale of the workers and undermine his self confidence.  Prolonged unemployment may even affect the workers skill and workhabits and in due course he may became unemployable.  The extent and causes of unemployment vary from country to country.  From the point of view of its cause employment may be classified as (1)  Cyclical Unemployment (2)  technological Unemployment (3)  Frictional Unemployment (4) Seasonal Unemployment (5)  Structural Unemployment.  The seemed method of classifying unemployment is based on its form as (1)  Voluntary Unemployment, and (2)  Involuntary Unemployment or disguised Unemployment.

11.  Inequalities of Incomes
 Ans : When we consider inequality of income, we do not mean minor differences in income and wages`.  On the other hand, by inequality, we mean the gross inequalities of income between different sections of the society as it is found in capitalistic economy or any economy with a capitalistic tinge.  In these economies, the capitalistic group consisting of billionaires and multi millionaires would be leading a life of pomp, plenty and pelf.  Whereas, other group would be just toiling and moiling to make both ends meet.  Again another group would be living in abject poverty, misery and helplesness bordering on to starvation and death.  Thus it is only thee type of colossal differences of income come under the concept and heading 'Inequalities of income'.  One of the vital problems of India is that of economic inequality.  Economic inequality in India assumes three forms.  They are inequality of assets, inequality of incomes, and regional inequality.  These forms are interrelated and interdependent.  It is seen that a small minority of the society holds a major proportion of the income generating assets such as land factories, shares, deposits with banks etc.  Nautrally, this minority comes to enjoy a great deal of income.  On the other hand, incidentally the vast majority holds only a few such assets.  Consequently, they receive only a very little income.  Thus inequality of assets generates inequality of income.  Similarly, the advanced regions of the country because of their higher average incomes is able to save and invest much more than the backward regions can do with their lower average income levels.  So the disparity between the advanced the backward regions goes on widening.  This tends to worsen the income inequality.  Thus, we see that the three forms of economic inequality are interrelated.  In spite of the various measures taken by the government to reduce inequality, it has not succeeded in correcting regional imbalances in the development of the country.  It is of utmost importance, to reduce this inequality to the minimum to build up a prosperous India.

12.  Urbanisation in India
Ans : It is generally observed that industrialisation and cultural progress in every country is accompanied with an increase in the urban population.  Regarding urban growth, India records a very fast growth towards urbanisation.  This is more so with big towns.  The urban population which stood at just 25 millions in 1901 had increased to 150 millions in 1981 and now it has exceeded 200 millions.  Nearly one-fourth of population of India lives in urban areas.  Cities with a population of a million and above have increased to 12 from 9 according to 1981 census.  The metropolitan cities which accounted for 5 percent of the total population of the country at the 1971 census, had gone up to 6.08 percent in 1981 census.
       According to the 1991 census 74.28% of the total population in India live in village and the remaining 25.12% in cities and towns.  Thus in relative terms the urban population in this country has increased over the last few years, though the pace of urbanisation has been rather slow.  In contrast, to European countries where urban population accounts for 70 to 80 per cent of the total population, proportion of urban population in India is still very low.  City life in any country has a glamour, at the same time it has its own problems.  Housing is probably the biggest problem in cities.  In addition up bringing of children in cities is for more costly than in villages and mobility of labour contributes a lot to disintegration of joint family system.  All these factors often reinforce each other in bringing down the birth rate.  In India, due to staggering industrialisation, it is to be noted that whatever little urbanisation has taken place in this country has also failed to generate social forces which normally bring down the birth rate.

13.  Briefly state the Magnitude of Poverty prevailing in India.
Ans : Due to mass poverty, the standard of living of an average Indian is among the poorest in the world.  Nearly 480 to 500 million people live in villages untouched by the benefits of modern development.  They are hungry, sick and they live in mud houses which are dark and dingy without air or sunlight.  They do not have furniture or other requirements of living, and in most cases, the animals also share their rooms.  All these houses have only one room mud apartments.  There will be no bathrooms or toilets and there will be complete absence of sanitation or hygeine.  The children and the adults will make use of the surroundings and the roadside as their toilets, polluting the air and water of the area.  After sunset, most of the villages go to sleep.  There will be no lamps or lights in the houses or in the road outside.  Poverty, illiteracy, disease, absence of sanitation and housing, lack of pure drinking water, absence of medical facilities etc are the hall marks of Indian villages, inspite of more than four decades of economic planning.
       According to the seventh plan estimates and NSS, figures relating to population below the poverty line are given below.

       The above table reveal the magnitude of poverty.  The number of people below the poverty line stood at maximum in the year 1977-78.  Indian poverty is mainly rural poverty.  As per the table nearly 28 percentage of the population in India live below the poverty line.  For the rural areas, the number of people (1980-90) had been estimated at 169 million which accounts for nearly 29 percent of the rural population.  Urban poor constitutes 19 percent of Urban population.  The magnitude of poverty is still large and grim with reference to weaker sections of society.  In this context, it is to be understood that poverty is unevenly spread among states in the country.  Andhra Pradesh, Maharashtra, Orissa, Rajasthan, Tamil nadu, Uttarpradesh and West Bengal have population more than one third below the poverty line.  But in some states like Haryana, Arunachal Pradesh, Jammu and Kashmir, the people below the poverty line constitutes any 15 percent of the states population.

14.  What were the favourable effects of British rule in India
Ans : The British ruled India for nearly two hundred years and during this period, their rule rendered certain benefits to the Indian economy.  One was the emergence of the market economy and the other was the trend towards the development of capitalist enterprise.
1.  Emergence of a market economy:
       A market economy is understood as a money economy in which goods are produced mainly for sale in the market.  In such an economy all translations of goods, borrowings and repayments are effected by using money as a medium of exchange.  The Cardinal features of a market economy are (1)  Production is mainly meant for sale in the market and not for the producers own use (2) Prices are determined by the turn forces of demand and supply (3) Land labour and capital are distinct factors of production.  They are freely available at price determined in the market. (4) production and investment are undertaken with a view to make handsome profit (5) There is intense competition among individuals and firms in their economic activities (6) Free mobility of goods and factors of production prevails.
       Evey during the pre - British period there were symptoms of a market economy in India.  Some of the indicators were the grening use of money, production for sale in the can of handicrafts and other manufactured goods, reasonable good volume of trade both internal and eternal, prevalence of banking facilities, commercialisation of agriculture, growth of towns etc.  The conquest of the British gave a set back to this trend.  But this was only temporary.  Very soon Indian economy stated moving towards a market economy.
Following were the sign of this trend.

1. Cash transaction began to replace barter system.
2. Competition emerged in all fields of production.
3. There was rapid growth in the volume of trade both internal and external.
4. During the British period, agriculture became commercilalised.
5. The British period witnessed a unified national market.
6. The implementation of the land settlements by the British made land a private property throughout the century.

       Apart from the above trends towards a market economy,  there were some contributing factors also that helped to develop a market economy.  They were centralised administrative system, development of transport and communication banking and trade.  All these led to the growth of capitalist enterprises in India.

2. Development of Capitalist Enterprise: 

       The development of Indian capitalist enterprise began when the British rule was firmly established in India.  The British investors in India developed industries like just, plantations, cotton textiles and coal mining.  The Indian investors also gained opportunities to participate in manufacturing, banks insurance companies, trading concerns, service agencies etc.  All these, pared the way for the origin and growth of private capitalism in India.

15.  Give a brief account of the Indian economy in the early days before the advent of British.

Ans: Indian economy in the early days was primarly a village economy.  Each village in the form of economic units worked as isolated self sufficiency units.  Each village, based on division of labour produced the necessary requirements and very rarely the products went beyond the village market.  Exchange was mainly in the form of barter, through money was not unknown.  The occupation of the people was cultivation of the land and tending of cattle.  There were artisans who identified themselves in classes and castes as carpenters, weavers, potters, washermen, cobblers, barbers etc.  Their occupations were heriditary.  These artisans received a portion of the harvested crops of the villages for their services rendered to the village community.  The village had their own panchayata and they functioned like miniature republics.  The villages had little relation and association with the outside world.  At the same time, there was no interference from outside.  They acknowledged the authority of the king and paid taxes in kind.  In short, the villages formed separated entities by themselves, contributing to a high degree of happiness of all in the villages.

Organisation of society during the early days

       The organisation of society, religion and law exercised a considerable influence on the economy of the country before the advent of the British rule.  The caste system originated during this period as a functional division of society.  The economic organization of society was simple and it worked splendly well.  The castes worked like the guilds of medieval Europe.  They made arrangement for the training of apprentices and operated as mutual benefit societies. 

       Secondly, the Joint Family System had enormous consequences on the Indian economy of early days.  In this system, the members of the family pooled their resources and maintained the family out of the common fund.  The advantage was that Weal or Woe, was borne by the group entirely the there was no need for organized poor relief.  The system gave protection to helpless persons, old men and widows etc.  In short, joint family system exhibited a spirit of unselfishness and sacrifice among the group.

       Another important factor which had powerful influence on the economy of India was the Hindu religion.  Important pilgrimage centres like varanasi, Allahabad, Puri etc developed as the nucleus of trade and commerce and many activities were based on religious functions and festivals.  But the religious system had its own drawbacks.  Religion placed emphasis in fatalism and very often it killed individual initiative and fatalism material progress.

Early Industries

       In earlier days, India had well established industries in the nature of handicrafts.  The chief among them being the textile industry which was spread all over the country.  Bengal was famous for Calicos, Dacca for muslims, Kashmir for Shawls, Ahmadabad for  Dhothies.  Amristrar and Ludhianna, were reputed centres for woolen products.  The Dacca muslim was the finer and best known of all capital goods.  Dr. Mukerjee tells that "a piece of the finest muslim, 20 yards long, and one yard wide, could be made to pass through a finger ring and required six months to manufacture it".

       Next to textiles, metal working was an established handicraft, Benares, besides silk was famous for its brass, copper and bell metal wares.  Other centres of this craft were Nazik, Poona, Vishakapatnam, Thanjavur and Hyderabad.  Mysore and South Canara excelled in Sandal wood carvings and products, while Rajaputana in enamelled jewellery and stone carvings.  Pearls of coramandal coast enjoy would-wide reputation.  Trade and commerce flourished only in the urban centres because of the variety of people and occupations.  Handicrafts and finearts were patronized by the princess and kings.  The towns were centres of art, architecture, sculpture and administration.

       During this period export trade of India flourished.  Besides, exporting handicrafts of foreign countries, articles like pepper, opium, indigo and cinnamon were also populrized in Europe during the 17th and 18th centuries.  The industrial status of India in the world was of a very high order.  At a time when Europe, the birth place of modern industrialization was inhabited by uncivilized tribes, India was famous for wealth, grandeur and craftsmanship.

16.  Trace the effects of colonial rule (Essay)

                           OR

        Explain the economic consequence of British rule

                            OR

        What were the features of Indian economy at the time of independence.

Ans : After two centuries of British rule, India attained independence on 15th August 1947.  But the cost she paid for her freedom was extremely high 23 percent of the land area and 18 percent of the population formed a separate state.  Independent India framed a new constitution which came into effect on 26th January 1950.  The country was declared a Sovereign Democratic Republic on the same day.  Eventhough colonialism ended in India with the attainment of independence the economic consequence of the British rule was tragic and serious.  The economy that was inherited by us was a colonial, semi feudal, lop sided, stagnant and backward one.  The economic consequences of British rule are given below.

1.  Colonial Economy

       Colonialism refers to a system of political and social relations between two countries, of which one is the ruler and the other is its colony.  The ruling country not only has political control over the colony, but it also determines the economic policies of the subjugated country.  British rule had transformed the Indian economy into a colonial economy.  The predominant feature of the colonial economy was India's unequal patterns of trade with Britain.  This was evident from the fact that India served as a market for the finished goods of Britain and as a source of a raw materials for her industries.  The other feature of the colonial economy was the dominance of British capital in important segments of the economy.  It is to be noted that the Indian economy was not free from the exploitation of foreign capital at the time of independence.

2.  Semi-Feudal Economy

       At the time of independence, Indian economy exhibited the features of both capitalism and feudalism.  Hence it was called a semi feudal economy.  In the areas under Zamindari settlement, the British conferred the right of ownership of land in zamindars.  These zamindars in due course created a large number of intermediaries through the letting and sub-letting of their own land.  Consequently the actual cultivators were reduced tot he position of landless serfs.  In the areas under Ryotwari settlement, the cultivator was recognised as the owner of the land.  But in actual practice, the condition was one of land lord tenant relation.  Thus under British rule, farmers were reduced to the position of serfs.  Serfdom was the cardinal feature of feudalism.  In all these ways Indian economy was transformed into a feudal economy.

       Apart from the fedual characteristics, Indian economy also showed capitalist characteristics under British rule.  Capitalistic features operated both in agricultural and industrial sectors of the economy.  Towards the close of the British rule, capitalism penetrated into agriculture and handicrafts.  In the farming sector, hired labourers were employed for farming operations.  Artisans became hired labourers of merchant capitalists.  Thus India at the time of independence was a semi-feudal economy.

3.  Backward economy

       The British rule of two centuries only helped to turn Indian into a backward economy.  Thus is evidenced by the following facts.

a.  Primary producing

       One characteristic feature of a backward economy is the predominance of the Primary Sector ie Agriculture and allied activities.  India at the time of independence was per-dominantly a primary producing economy with 70 percent of her labour force engaged in agriculture.  The share of agriculture to her national income was 59%.  This trend prevailed throughout the British rule.  On the other hand the non-agricultural factor was small.  In the non agricultural sector, services such as trade, money lending etc dominated with industrial development.  Most industries were small and household enterprises.  Large industries where those which processed agricultural produce.  Metallergical engineering, chemical, petroleum and other modern industries formed a negligible sector.

b.  Low per capita income

       Indian economy at the time of independence was typically a backward economy with low per capita income.  The average annual income of an Indian at the time of independence stood at Rs. 246 at current prices.

c.  Illiteracy

       Low illiteracy is generally a sign of backwardness.  As per the 1941 census, only 17 percent of the population was literate.  Majority of children, especially girls did not go to schools.

d.  High birth and death rate

       High birth and death rates are symptoms of a backward country.  During the last decade of the British rule (1931-1941) the birth rate in India was as high as 45 per thousand and the death rate 31.2 per thousand.  This resulted in high growth of population.

e.  Low level of urbanisation

       Low level of urbanisation is an indicator of economy backwardness.  In 1941 about 85 percent of the population lived in rural areas and urban population was only 15 percent.

f.  Foreign dependence

       India at the time of independence depended extremely on foreign countries for capital goods, plant and machinery and defence goods.  At the same time, she imported many of the consumers goods from foreign countries.

g.  Unemployment 

       Unemployment at the even of independence was very acute.  This resulted in low per capita income and poor standard of living.

4.  Stagnant economy

       Throughout the period of British rule in India, was a stagnant economy.  According to an estimate given by shri. M. Mukerjee the average annual rate of growth of per capita income at current prices between 1857 and 1956 was only 0.5%.  At the same time the rate of growth was very high during the period.  This made the Indian economy to be a stagnant one.

5.  Depleted Economy

       The Second World War made the India economy solely depleted.  Plants and equipments were put to intensive use to meet the war requirements.  Replacement of the worn-out machinery also became difficult at imports declined during the war.  Consequently the physical assets eroded.  Inventories like stock of raw materials, finished and semi - finished goods with the producers and dealers also decreased, considerable during the war.  As a result of these factors, even after independence immediate increase in production became a difficult task.

6.  Amputated Economy

       The market economy of India during the pre - independent period was moving towards a vast natural market.  This created an atmosphere of economic integration.  But the British did not encourage this trend by promoting emotional integration in the country.  Instead they took interest only to encourage communal animosities.  Hence they adopted the policy of divids and rule.  This policy of the British only helped to disintegrate the various cultural, religious and linguistic groups in India.  All these resulted in the partition of the country.  As a result of the partition, the jute growing areas of West Bengal went to Pakistan, while the jute mills of Calcutta remained in India.  Similarly, the cotton mills of Bombay and Ahmadabad were adversly affected as the cotton growing areas like West Punjab and sind went to Pakistan.  A above all, India became a food defficient state as the granaries of India.  Punjab and Sind were separated from India.  The economy was also highly dislocated by mass migration, massacres and riots caused by the partition.

       The above study shows that the destruction of India handicrafts, the Zamindari system which lacked any incentive to the tiller of the soil, Commercialization of agriculture and the hostile policy of the government at that time, all led to the complete ruin of the Indian economy.

17.  What were the economic consequences of British rule in India. (Essay)

Ans : India had been the lad to conquest and settlement by many foreigners.  The Battle of Plassey in 1757 enabled the British East India company to become administrators.  The British conquest of India was completed by 1858 where the crown took over the administration.  The conquest of India by the British led to the emergence of a new political and economic system.  By the middle of the 19th century they acquired absolute control over the whole of the country.  They ruled the country from 1757 to 1947.

       When the British conquered India, the Colonial expansion coincided with the Industrial revolution in England.  Such a situation forced the British to exploit India to serve the economic interests of Great Britain.  The British conquest led to the disintegration of the village communities mainly due tot he introduction of a new land revenue system and commercialization of landed property.  They followed an industrial policy of systematic destruction of indigenous handicrafts.  They made India a source of raw materials of British industry and a market for British manufactured goods.  All the expansion in the field of transport, communication, irrigation education etc were mainly aimed at accelerating the process of economic drain from India.  The three important consequences in the Indian economy due to the advent of the British rule were:-

1. Decline of Indian handicrafts and ruralization of the economy.
2. Introduction of new land system to suit the imperialistic needs.
3. The process of industrial through colonial capitalism.

Decline of Indian Handicrafts

       Before the Industrial revolution, the pattern of Indian's trade with the foreign countries was of manufactured goods, textiles, spice etc to various parts of Europe.  The Industrial revolution in England not only created a great demand for raw materials but also needed foreign markets to sell the goods.  Hence the Industrial revolution in England reversed the character of India's foreign trade.  As a first step, attempts were made to crush Indian manufactures and to step up export of raw materials.  The Indian textile handicraft was not only the first, but the worst to be hit by the 'anti foreign trade policies of the British.  Thus the alien government which was against the Indian interest, largely contributed to the decline of handicrafts.

       Secondly, the Indian crafts were thriving mainly under royal patronage.  With the advent of the British rule, the royal patronage disappeared and the handicrafts also suffered on the account.

       Thirdly, the Indian made goods could not withstand the foreign competition of machine made goods particularly cotton textile goods.  This led to the decline of Indian handicrafts and the economy had to depend on foreign manufactured goods  by exporting raw materials.

       Fourthly, there was the indegenious factor on the demand side.  With the spread of education and along with it, the English culture, the Indian began to immitate Western style in dress, for fashion and manners.  In these respects they tried to identify themselves with British officials.  This indirectly encouraged the demand for imported western goods and completely discouraged indigenous production.

       The decline of Indian handicrafts resulted in unemployment.  The displaced unemployed artisans had no alternative.  They were forced to take up agriculture for their living.  This led to progressive ruralization and over crowding in agriculture.  As a result, the population dependent on agriculture increased from about 55 percent in the middle of the 19th century to 95 percent in the thirties of the century.  This overcrowding naturally paved the way for many defects in Indian agriculture like sub-division and fragmentation, abnormal rents, emergence of landless agricultural labourers etc.

The Land System

       During the East India company rule, land revenue was the main source of finance.  The directors of the company were very keen on realizing the maximum revenue without incurring much expenditure in revenue administration.  So the rulers introduced land settlement in 1793.  In Bengal, the land settlement made was called 'Permanent Revenue Settlement'.  By this, the revenue collectors of the area were raised tot he status of private landlords who came to be known as Zamindars.  The system fixed land revenue in perpetuity and the Zamindars were required to deposit an enhanced land revenue to the government.  This naturally led to excessive exaction from peasants by the zamindars.  The zamindars in due course became the intermediary class with vested interest tied to the British rule in India.  Thus the English wanted to stabilize firmly with the help and revenue of the Indian people.  This zamindars system of land settlement was extended to other states under the British rule and it was made a 'Temporary Settlement' under which the land revenue was reassessed periodically ranging from 25 to 40 years.

       In addition to these two system, a third one was evolved in major parts of Bombay and Madras.  This was called the 'Ryotwari Settlement'.  Accordingly, each peasant holding a plot of land was recognized as the landlord and he was made directly responisble for the payment of annual land revenue tot he governement.  The Ryotwari settlement also created absentee landlords and it led to the destruction of the organic life of the village communities based on customs and traditions.

Further, during the British rule agriculture was commercialized to cater to the needs of British industries for necessary raw materials.  There was a huge demand for industrial raw material little cotton, jute, groundnut, sugarcane etc.  By offering high prices, the Indian peasants were attracted to take to production of commercial crops instead of food crops.  During this period many peasants substituted commercial crops and thus led to a rapid fall in the production of food crops.  The deplorable fall in the production of food crops was responsible for frequent famines in India during the British days.  These factors retarded the process of industrialization of the Indian economy.

Industrial Transition and Colonial Capitalism

       Organised industry on a large scale was first introduced in India only by the British.  The British investors in India developed industries like jute, plantations, cotton textiles and coal.  The Indian investors had also opportunities to participate in manufacturing industries, banks insurance companies, trading concerns, service agencies etc.  Thus the British rule helped the development of capitalist enterprise in the country to an extent.

18.  Enumerate the causes of poverty in India and Briefly explain some of the anti poverty programmes adopted in India.