Under the British rule, the Indian economy was basically agrarian. Around 85% of the population was living in the villages and got their livelihood directly or indirectly from agriculture. Despite this fact, the agricultural sector experienced a lot of stagnation and even frequent deterioration. Agricultural productivity during the period, became very low. Talking in absolute terms, the agricultural sector had a little growth due to the expansion in the aggregate area under cultivation.
The stagnation was caused due to the various systems of land settlement introduced by the British government, particularly under the zamindari system which was implemented in the Bengal Presidency of the British empire. Under this system, the profits that were got out of cultivation went to the zamindars instead of the farmers who cultivated the land. Most of these zamindars and the British government did nthing to improve the condition of agriculture. The main objective of the zamindars was to only collect rent from the cultivators regardless of their economic conditions. This heartless behaviour of the zamindars caused misery and social tension amongst the cultivators. This callous behaviour of the zamindars was to a great extent caused by the terms of revenue settlement, a policy of the colonial government. Under this, there were fixed dates within which the zamindars had to deposit specific amounts of money, failing which they would lose their rights.
Apart from the zamindari system the other reasons for the poor growth and productivity of the agricultural sector were: lack of irrigation facilities, low levels of technology and negligible use of fertilizers. Due to commercialization of agriculture, there was a relatively high yield of cash crops in some parts of our country. This , however, did not serve the purpose of the farmers because they were forced to produce cash crops instead of food crops. These cash crops were produced for and used by the British industries in Britain.
The agricultural production was pushed further back during the time of partition. A sizeable portion of the undivided India, which was highly irrigated and fertile, went to Pakistan. This affected our agricultural outputs adversely. In particular, our jute industry was badly affected because most of the jute came from East Pakistan or present day Bangladesh. Till then India had enjoyed world monopoly in the jute goods industry. This suffered because of the lack of raw materials.