Three key features of the Indian economy on the eve of independence, that contributed to its predominantly stagnant structure:
1. Agricultural Dominance and Low Productivity: The Indian economy was primarily agrarian, with agriculture being the main occupation for a significant portion of the population. However, the agricultural sector suffered from low productivity due to traditional and outdated farming methods. Lack of modern agricultural technology, inadequate irrigation facilities, and fragmented land holdings limited economies of scale, resulting in stagnant agricultural output and perpetuating rural poverty.
2. Colonial Economic Exploitation: The British colonial rule pursued economic policies that were designed to serve Britain's interests at the expense of Indian development. India was primarily treated as a supplier of raw materials for British industries, while finished goods were imported, leading to deindustrialization. The drain of wealth from India through heavy taxation and unequal trade policies hindered the growth of domestic industries and stifled economic progress.
3. Limited Industrialization and Infrastructure: The Indian economy lacked significant industrialization on the eve of independence. The lack of domestic industries and a weak manufacturing base limited employment opportunity outside the agricultural sector. Additionally, inadequate infrastructure, including transportation and communication networks, hampered the efficient movement of goods and services, restricting market integration and economic growth.