Revealing the Secondary Sector: Exploring the Landscape of the Industrial Sector

The industrial sector is a segment of the economy made up of businesses that aid other businesses in manufacturing, shipping or producing their products. The industrial sector is also known as the secondary sector. 

The Decline of India’s Handicraft Industries in the Colonial Era

• Colonial Era Depletion: India, once known for its flourishing handicraft industries, faced a stark decline during the colonial era. 
• Stagnation and Loss: The absence of efforts to modernize these industries or establish new ones led to a significant loss in the historical significance once held by the nation’s handicraft sector.

Colonial Economic Objectives: Shaping India’s Industrial Destiny

• Colonial Economic Shift: The colonial rulers had a two fold objective:
  • Relegating India to a mere exporter of raw materials for Britain’s modern industries 
  • Transforming India into a vast market for British manufactured goods. 
• British Imports in Colonial India: This systematic deindustrialization led to a significant rise in unemployment and created demand in the Indian market, which was now met through imports from Britain.

Evolution of the Industrial Sector: The Dawn of Modern Industries in 19th Century India

• Nineteenth Century India: The latter half of the nineteenth century saw the nascent development of modern industries in India, albeit at a sluggish pace. 
  • Initially, the focus was on establishing cotton and jute textile mills. 
• Establishment of Regional Industries: The cotton mills, mainly owned by Indians, were concentrated in western India, particularly in Maharashtra and Gujarat, while the jute mills, largely foreign-owned, found their base in Bengal.

Early Twentieth Century Industrial Sector Developments

• The Birth of Tata Iron and Steel Company: The early twentieth century marked the emergence of iron and steel industries, with the establishment of the Tata Iron and Steel Company (TISCO) in 1907. 
• Post-World War II Expansion: Post-Second World War, a few other industries in sectors like sugar, cement, and paper began to surface. 
• Industrialization Hurdles: However, the absence of a significant capital goods industry hindered further industrialization.

Transition and Tensions: Displacement of Traditional Industries in the Industrial Sector

• The rise of modern industries necessitated a substantial displacement of traditional handicraft industries. 
• Limited Growth and Contribution to GDP/GVA: Despite the emergence of new industries, the growth rate of the industrial sector and its contribution to the Gross Domestic Product (GDP) or Gross Value Added(GVA) remained quite limited.
• Public Sector Dominance: The scope of the new industrial sector was largely confined within the public sector.
  • With operations primarily focused on railways, power generation, communications, ports, and select departmental undertakings. 
• Colonial Constraints: This restriction further limited the potential for industrial expansion and diversification in the colonial era.

Colonial Impact on India’s Foreign Trade Dynamics

India has been an important trading nation since ancient times. However, the restrictive policies of commodity production, trade and tariff pursued by the colonial government adversely affected the structure, composition and volume of India’s foreign trade.

Colonial Edicts on Indian Trade: Shaping Export-Import Dynamics

• Colonial Trade Policies: India, with its rich history as a significant trading nation, faced a paradigm shift under the colonial government’s restrictive policies on commodity production, trade, and tariffs. 
  • These policies reshaped India into an exporter of primary products like raw silk, cotton, wool, sugar, indigo, and jute.
  • At the same time turning India into an importer of finished consumer and capital goods from Britain.

British Control on Indian Trade: Monopoly, Restrictions, and the Suez Canal Impact

• Trade Monopoly: The colonial era saw Britain establish a monopoly over India’s foreign trade, controlling both imports and exports. 
• Colonial Trade Restrictions: A significant portion of India’s foreign trade was confined to Britain.
  • Limited trade interactions allowed with a few other nations such as China, Ceylon (Sri Lanka), and Persia (Iran). 
• Suez Canal Impact: The inauguration of the Suez Canal further tightened British control over India’s trade routes. Refer to Figure.

Disparities and Resource Drain in Colonial India’s Foreign Trade

• Persistent Disparities: Despite generating a consistent export surplus throughout the colonial period, India’s foreign trade scenario was far from favourable. 
• Resource Drain: The necessity to import vital commodities like food grains, clothing, and capital goods led to a heavy drain on India’s resources, negating the apparent positive outlook presented by the export surplus.

The Hidden Cost: How Colonial Trade Drained India’s Wealth

• The Illusion of Prosperity: The colonial trade structure did not translate the export surplus into an inflow of gold or silver into India. 
• Diverted Wealth: Instead, the surplus was channelled to cover the expenses of a colonial office established in Britain, fund wars waged by the British government, and pay for the import of invisible items. 
  • This systematic diversion of trade surplus contributed to a substantial drain of Indian wealth, leaving a lasting impact on the country’s economic landscape.

Understanding Population Demographic conditions in Colonial India

Demographic conditions related to the population in a region. This covers various factors like population growth rate, the percentage of different age groups within the population, the literacy rates, the sex ratio, urban-rural population ratios, etc.

Demographic shifts: Tracking Population Changes in British India

• The journey of demographic data collection in British India commenced with the initiation of the census in 1881. 
• Despite its limitations, this census shed light on the uneven nature of population growth across the region. 
• Following this, a decennial tradition of conducting census operations was established, providing a glimpse into the demographic shifts over time.

Phases of Population Change in India: Early Challenges and Transition

• First Stage: India was navigating through the first stage of demographic transition. 
  • In fact between 1911 and 1921 there was a negative rate of growth of – 0.03%.
• Second Stage: The shift to the second stage was marked post-1921. 
  • The principal reasons for the decline in the death rate after 1921 were increased levels of control over famines and epidemic diseases
  • However, during this phase, both the total population and the rate of population growth remained relatively modest.

Colonial Literacy Challenges: An open Reality and Gender Disparity

• A Bleak Picture: The era depicted a bleak picture of literacy, with an overall literacy rate lingering below 16%. 
• Gender Disparity in Colonial Education: The scenario was particularly grim for females, whose literacy rate stood at a mere 7%, highlighting the gender disparity in educational attainment.

Colonial Public Health: A Crisis of Neglect and Inadequacy

• Inadequate Public Health Facilities: The colonial period was characterised by a stark inadequacy of public health facilities, rendering them either inaccessible or insufficient for a large segment of the population. 
• Public Health Crisis: This neglect led to the widespread prevalence of water and air-borne diseases, taking a heavy toll on lives.

Realities of Mortality: Historical Perspectives on High Rates and Low Expectancy

• High Mortality Rates: The mortality rates during this period were alarmingly high, with infant mortality being particularly distressing at 218 per thousand. 
  • This starkly contrasts with the current infant mortality rate of 33 per thousand. 
• Dismal Life Expectancy: Life expectancy too was dishearteningly low at 32 years, a far cry from the present expectancy of 69 years.

The Economic Strain in Colonial India

• Colonial Era Poverty: Although the absence of reliable data obscures the exact extent of poverty, there’s no disputing the pervasive poverty that plagued India during the colonial era.
• Economic Strain and Demographic Decline: This economic hardship significantly contributed to the deteriorating demographic profile of India during those times.

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