In 1947, British rule over India came to an end. Country’s economy was partitioned between Indian Economy and Pakistan Economy. Partition of the country completely disintegrated its economy. Consequently, Indian economy now acquired the characteristic of a disintegrated economy or partitioned economy. Partition had the following on Indian economy:
Effect of Partition on per capita income
As a result of partition, per capita land in India decreased. 82 % of population and 77% of the area came to the share of India. Thus, per capita availability of land went down.
Effect of Partition on Agriculture
Indian agriculture suffered setback because of partition. Shortage of food grains was further aggravated. While Pakistan became a surplus state in the matter of food grains, India got 82% of population and 65% of food grains area. Only 68% of the cotton producing area and just 195 of the jute producing area came to India’s share. Pakistan had irrigation facility available to 45% of net sown area in India. Thus partition put Indian agriculture production in a deplorable condition.
Effect of partition on Industries
91% of industries of undivided India came to its share. All industries units producing jute, Paper, Iron and steel remained in India. Share of Pakistan, with regard to cotton textile, sugar and cement industries was almost negligible. But large scale migration of the artisans and skilled workers to Pakistan had an adverse effect on the small-scale and cottage industries of India. Large areas producing cotton and jute fell to the share of Pakistan while cotton and jute textile mills fell to the share of India. Thus, India became dependent on Pakistan for the import of raw materials for its industries.
Effect of Partition on Foreign Trade
Partition of the country had its adverse effect on the composition of India’s foreign trade. Before partition, India used to export cotton, jute and food grains etc. But after partition, India was forced to import these products. On the account of uncertain supply of raw material, production and export of jute manufactures and cotton textiles fell sharply.