NCERT Solutions for Class 11 Economics Chapter 1 Indian Economy on The Eve of Independence

The Indian economy was an agro-based economy on the eve of independence. 75% of the Indian population was earning a livelihood from agriculture. Despite being a primary source of income for a major population, this sector faced decline under British rule. And over 85% of the country's population lived in villages where livelihood completely depended on agriculture. The Indian economy on the eve of independence with respect to agriculture was disheartening. The most important Indian sector was facing massive stagnation and continuous deterioration. Indian economy witnessed very low economic growth. Studies reveal that the economy was growing at a speed of two per cent during the periods 1900-1950. British rule ruined the agriculture sector and handicrafts and transformed India into a supplier of raw materials. The money that Indian goods earned from foreign trade was not invested in the Indian economy, it was used for managing the British army and expanding their colonial reach across Asia.