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CA Foundation · Business Economics · Indian Economy

Which of the following best describes the structure of India's economy at the time of Independence in 1947?

At Independence India was a predominantly agrarian, low-income economy with a weak industrial base. Most people depended on agriculture, productivity was low, and capital goods industries were underdeveloped. The colonial period had stunted structural change, so industrial and service-led descriptions do not fit the 1947 economy.

  1. AA predominantly agrarian, low-income economy with a weak industrial baseCorrect
  2. BA predominantly industrial economy with a strong capital goods sector
  3. CA service-led economy with high per capita income
  4. DA diversified economy with large manufacturing exports

Explanation

At Independence, agriculture employed most of the workforce and contributed the largest share of national income. Industry was small and lacked a capital goods base. Per capita income was very low, so the other options describe an economy India did not have then.

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