Colonial Rule and Its Effects on India's Rural Economy

India is a vast country with different cropping systems and agricultural products with its fair share of famines, floods, and droughts as also other natural calamities like earthquakes, hailstones, pest/locust attacks, etc. Farming is a risky business and more so in rain-fed areas. In Mughal India (around 1600 AD) only 5% of India had irrigation systems for farming and the rest depended on the bounty of the monsoon.

Though famines occurred frequently and created havoc among the rural population, India did not have an aggregate food shortage and famines were due to localized crop failures resulting in mass deaths among the landless laborers, rural artisans, and petty traders (decimating between 35-55% of the poor). As per Paul Greenought's checklist of Indian famines, between 298 BC and 1943, there were 121 major famines recorded as in Table 4 below.

Table 4. Famines in India

During the colonial period, the major famines were recorded and some important administrative decisions taken were as under:

• 1770 – Great Famine of Bengal (33% of population killed)
  
• 1860-61 – Upper Doab Famine
  
• 1866 – Orissa Famine
  
• 1869 – Rajputana Famine
  
• 1867 – Imperial Forest service created
  
• 1870 – Creation of Department of Irrigation
  
• 1869-72 -Department of Agriculture created
  
• 1873-74 -Bihar Famine
  
• 1876-80 Great Famine with 5.3 million dead
  
• 1878-80 Famine Commission Report
  
• 1880-84 Repeal of Import Duty on Cotton + Most Tariffs
  
• 1884-88 - Passage of Bengal Tenancy Act
  
• 1896-97- Bundelkhand Famine
  
• 1899-1900- Great Indian Famine
  
• 1904 - Agriculture Credit commences with Cooperative Credit Societies Act.

The effects of recurring droughts/famines etc. had an effect on the rural economy and on the rural people as India had a non-monetized exchange economy with wages being paid in cash or cash and kind. In the village, the ‘jajmani' system ensured arrangements for payment for essential services between castes and resulted in appropriating a fixed share of the harvest. For a large proportion of the rural population, food supply depended on employment entitlements or the demand among the landed producers of food for services. This demand was severely curtailed at times of food shortages due to natural calamities.

A crop failure could create a famine, not due to the aggregate shortage of available food grains but because of the dependency of a significant proportion of the population on the 'Exchange System' as these people had no means to acquire food. Thus it was seen that food grains were still being exported in areas of famine hit-regions and that food grain prices in famine-hit regions during affected years were higher but not very much higher than normal.

The Famine Commission (1880) concluded that famines were the result of the breakdown of the socio-economic system in the wake of local crop failures. Also as the population grew, the economy grew about 1% per year in-between 1880- 1920, due to the subsistence agriculture practiced. Irrigation impetus gave rise to cash crops like jute, cotton, sugarcane, coffee, tea, indigo, opium etc. ( Roy, 2006, the Economic History of India (1857-1947, OUP)