Low Level of Economic Development Under the Colonial Rule
Before the British colonized India, we had an independent economy. Agriculture was the primary source of income and livelihood for people. There were various other kinds of manufacturing activities that characterized the country's economy. We produced a lot of handicrafts, silk and cotton textiles, metal and precious stone works etc. All these products were renowned all over the world and were especially known for the fine quality of material used and the high standard of craftsmanship.
After the advent of the British, the economic policies were framed in such a way that they promoted and protected the British economic interests and did nothing for the development of the Indian economy. They brought about a fundamental change in our economic structure, changing us from a manufacturer of artifacts and handicrafts into a net supplier of raw materials of the British industries and the end consumer of the industrial products manufactured by Britain.
The British Government never made any proper attempts to study the national and per capita income of India. Some individual attempts made to study and measure the per capita income of India gave inconsistent and conflicting results.
Some of the notable estimators of our per capita income during the period of British rule are: Dadabhai Naoroji, William Digby, Findlay Shirras, V K R V Rao and R. C. Desai. It was the estimation done by Rao that was considered very significant. All these studies were consistent on one fact: that our growth of aggregate real output during the first half of the twentieth century was less than two percent and also the pre capita output growth was just half a percent.