Class 11 Economics - Indian Economic Development - Chapter Indian Economy on the Eve of Independence NCERT Solutions | Underscore some of India’s most cr

The exploitative colonial rule of the British hampered almost every sphere of Indian economy badly. As an end-result, India faced acute economic challenges at the time of independence. The following are some of the economic challenges faced by the Indian economy:
1. Low Level of Agricultural Productivity: During the colonial rule Indian agricultural sector was used by the British to suit their own interest. Consequently, Indian agricultural sector experienced stagnancy, low level of productivity, lack of investment, poor condition of landless farmers and peasants. Thus, the immediate concern for India was to develop its agricultural sector and its productivity. Some of the immediate reforms needed at the time of independence were abolition of the Zamindari system, need of land reforms, reducing inequality of land ownership and upliftment of the peasants.
2. Infant Industrial Sector: India failed to develop a sound industrial base during colonial rule. In order to develop the industrial sector, India needed huge capital, investments, infrastructure, human skills, technical knowhow and modern technology. Further,due to stiff competition from the British industries, India's domestic industries failed to sustain. Thus, developing small scale and large scale industries simultaneously was the main concern for India to develop its industrial sector. Moreover, the need to increase the share of the industrial sector to India's GDP was one of the important economic challenges for India.
3. Lack in Infrastructure: Although there was a significant change in the infrastructural development in the country, this was not sufficient to improve the performance of the agricultural and industrial sector. Also, there was a need to upgrade the existing infrastructure and to modernise the infrastructure to enhance its efficiency and effectiveness.
4. Poverty and Inequalities: India was trapped in the vicious circle of poverty and inequality. The colonial rule drained out a significant portion of India's wealth to Britain. Consequently, the majority of India's population was poverty stricken. This further exaggerated economic inequalities across the country.