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IGNOU Assignment Solution (MHI-107) History of Indian Economy-2

IGNOU Assignment Solution MHI 107 (History of Indian Economy 2)

SECTION A

  1. ‘The eighteenth century was a century of universal decline.’ Comment.
  1. What role did the India merchants play in India’s trading economy during the late 19th century?
  2. Critically examine recent arguments pertaining to drain of wealth.
  3. Analyze the impact of colonial interventions on tribal economy.
  4. Write short notes on any two of the following. Answer in about 250 words each.

    i) Rise of European Private Trade
    ii) Impact of Indian Commercialisation
    iii) Herschell Committee Report
    iv) Customary Rights of Forest-Dwellers

SECTION B

  1. Critically examine Morris D. Morris’ argument that there was ‘not much direct evidence of the decline of India’s traditional industries.’
  1. Critically examine women’s employability in colonial India.
  2. Analyze the nature of Indian economic growth in the first three five year plans.
  3. What impact did bank nationalization had on the development of credit market, savings and investments?
  4. Write short notes on any two of the following. Answer in about 250 words each.

    i) Early Census
    ii) Bird Heiglers & Co.
    iii) Globalisation
    iv) Economic Reforms in the 1990s

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ignou assignment solution mhi 107

The statement “The eighteenth century was a century of universal decline” is a complex one that requires a nuanced analysis of historical, social, economic, and cultural factors. In this essay, I will delve into various aspects of the eighteenth century to evaluate the validity of this statement.

Firstly, it’s essential to acknowledge that the eighteenth century was a period of significant transition and change across the globe. It witnessed the Enlightenment, a philosophical movement that emphasized reason, science, and individual rights. This era also saw the rise of colonial empires, revolutions, and the beginnings of industrialization. These developments had both positive and negative impacts on societies worldwide.

One of the key arguments supporting the notion of universal decline in the eighteenth century is the prevalence of warfare and conflicts during this period. The century was marked by several major wars, including the War of Spanish Succession, the Seven Years’ War, and the American Revolutionary War. These conflicts caused immense human suffering, economic strain, and political instability. The widespread warfare disrupted trade, led to the destruction of infrastructure, and drained resources that could have been used for societal advancement.

Additionally, the eighteenth century was characterized by economic challenges for many regions. Agricultural productivity was still largely dependent on traditional methods, leading to periodic famines and food shortages. Moreover, the Atlantic slave trade flourished during this time, contributing to the exploitation and dehumanization of millions of people. The economic prosperity enjoyed by some nations, such as Britain during the Industrial Revolution, was not shared universally and often came at the expense of marginalized groups.

Socially, the eighteenth century witnessed entrenched inequality and injustice. Feudal systems persisted in many parts of the world, with a rigid social hierarchy that limited social mobility and opportunities for the majority of people. Slavery, serfdom, and indentured labor were widespread, perpetuating systems of oppression and exploitation. Women, in particular, faced significant restrictions on their rights and freedoms, with limited access to education, property ownership, and political participation in most societies.

However, it would be inaccurate to paint the entire century as a period of uninterrupted decline. The eighteenth century also saw significant advancements in various fields that laid the groundwork for future progress. The Enlightenment brought about intellectual breakthroughs, challenging traditional beliefs and paving the way for scientific discoveries and technological innovations. Thinkers like Voltaire, Rousseau, and Montesquieu questioned authority and advocated for greater individual liberties and democratic governance.

Moreover, the eighteenth century witnessed the emergence of modern nation-states and the spread of democratic ideals. The American and French Revolutions, though tumultuous, were pivotal moments in the struggle for political rights and self-determination. These revolutions inspired movements for independence and democracy in other parts of the world, contributing to the eventual downfall of colonialism and feudalism in many regions.

Culturally, the eighteenth century was a period of creativity and artistic flourishing. The era produced masterpieces in literature, art, music, and architecture, with figures like Mozart, Bach, Shakespeare, and Voltaire leaving a lasting impact on their respective fields. The exchange of ideas through trade, exploration, and intellectual discourse enriched cultures and contributed to the diversity of human expression.

In conclusion, while the eighteenth century was indeed marked by challenges such as warfare, economic hardships, social inequality, and cultural conflicts, it would be simplistic to characterize it solely as a century of universal decline. The period was complex and multifaceted, with moments of progress and setbacks intertwined. It laid the foundation for many of the modern institutions, ideas, and movements that continue to shape our world today. Understanding the nuances of this pivotal century is crucial in assessing its legacy and lessons for the future.


India’s merchants played a crucial role in shaping the country’s trading economy during the late 19th century. This period was marked by significant changes in India’s economic landscape, influenced by colonialism, industrialization, and global trade dynamics. Understanding the role of India’s merchants during this time provides insights into the complexities of the era.

Firstly, it’s essential to recognize that India’s trading economy had a long history predating the colonial period. Merchants, both indigenous and foreign, had been engaged in trade across the Indian subcontinent and beyond for centuries. However, the late 19th century brought about transformative shifts that impacted the role and influence of Indian merchants.

One of the key factors shaping India’s trading economy during this period was British colonial rule. The British East India Company, and later the British Crown, exerted significant control over India’s trade policies, infrastructure, and markets. This colonial administration introduced new regulations, tariffs, and trade routes that affected how Indian merchants conducted their business.

Indian merchants during the late 19th century operated in a dynamic and evolving global trading network. The rise of industrialization in Europe created a growing demand for raw materials from India, such as cotton, jute, spices, and tea. Indian merchants capitalized on these opportunities by expanding their trade networks, establishing connections with European traders, and adapting to changing market trends.

The India merchants played a vital role as intermediaries between local producers and global markets. They facilitated the movement of goods, managed financial transactions, and navigated complex trade regulations. Many Indian merchants became wealthy and influential figures, building extensive business networks and contributing to economic growth in their communities.

However, the colonial context also posed challenges and constraints for Indian merchants. British policies often favored British traders and industries, leading to unequal competition and limited opportunities for Indian merchants to fully benefit from the expanding trade. The imposition of tariffs, taxes, and monopolies by the colonial authorities further restricted the autonomy and profitability of Indian merchants.

Despite these challenges, Indian merchants demonstrated resilience and adaptability in navigating the evolving trading landscape. They diversified their business interests, invested in new industries, and leveraged emerging technologies such as railways and telegraphs to improve logistics and communication. Some merchants also ventured into international trade beyond the British Empire, establishing connections with markets in Asia, Africa, and the Middle East.

Moreover, Indian merchants played a significant role in the development of financial institutions and credit systems. They formed partnerships, guilds, and business associations to pool resources, share risks, and negotiate with authorities. These collective efforts helped strengthen the financial resilience of Indian merchants and fostered a sense of solidarity within the business community.

The late 19th century also witnessed the emergence of Indian nationalist movements that intersected with economic concerns. Some Indian merchants actively participated in political activism, advocating for greater economic autonomy, fair trade practices, and the protection of indigenous industries. They contributed to debates on economic policies, tariff reforms, and land rights, highlighting the interconnectedness of economic and political struggles during this period.

In conclusion, India’s merchants played a multifaceted and influential role in the country’s trading economy during the late 19th century. They navigated complex colonial dynamics, capitalized on global trade opportunities, and contributed to economic development and innovation. Despite facing challenges and inequalities, Indian merchants demonstrated resilience, adaptability, and a sense of agency in shaping their economic destiny amidst changing times.


The concept of the “drain of wealth” refers to the economic exploitation and extraction of resources from colonies or less-developed regions by imperial powers or dominant economic entities. This notion has been a subject of debate and analysis, especially in the context of colonialism and globalization. In recent years, there have been various arguments pertaining to the drain of wealth, with scholars offering different perspectives on its significance and implications.

One argument that has gained prominence is the historical perspective on the drain of wealth during colonial periods. Historians and economists have highlighted how colonial powers extracted resources, wealth, and labor from their colonies, often through coercive and exploitative means. For example, during the British colonial era in India, the export of raw materials, taxation policies, and monopolistic trade practices drained significant economic resources from the Indian subcontinent to benefit the British Empire.

Additionally, scholars have pointed out the role of multinational corporations (MNCs) and global financial institutions in perpetuating the drain of wealth in contemporary times. They argue that multinational corporations often exploit natural resources, cheap labor, and tax loopholes in developing countries, leading to wealth extraction and economic imbalances. Moreover, the influence of global financial institutions such as the International Monetary Fund (IMF) and World Bank in promoting policies that favor wealthy nations or corporations has been critiqued for exacerbating the drain of wealth.

On the other hand, some economists and policymakers have contested the notion of a one-sided drain of wealth, arguing that globalization and trade can also bring benefits to developing countries. They highlight how foreign direct investment (FDI), technology transfer, and access to global markets can contribute to economic growth, job creation, and poverty reduction in less-developed regions. They argue that focusing solely on the drain of wealth overlooks the potential positive impacts of global economic integration.

Furthermore, there is a debate regarding the role of governance, transparency, and accountability in addressing the drain of wealth. Proponents of good governance argue that effective institutions, anti-corruption measures, and fair trade practices are essential in mitigating wealth extraction and promoting equitable economic development. They emphasize the importance of international cooperation, regulations, and ethical business practices in combating exploitative practices that contribute to the drain of wealth.

Moreover, environmental concerns have been integrated into discussions about the drain of wealth, particularly regarding resource depletion, pollution, and climate change. Critics argue that unsustainable extraction and consumption patterns driven by profit motives contribute to environmental degradation, which disproportionately affects vulnerable communities in developing countries. They call for sustainable development practices, renewable energy investments, and climate justice initiatives as part of the solution to address the drain of wealth while protecting the planet.

In conclusion, recent arguments pertaining to the drain of wealth reflect a complex and multifaceted discourse that encompasses historical legacies, contemporary economic realities, governance challenges, and environmental considerations. While some emphasize the exploitative nature of wealth extraction and advocate for redistributive policies, others highlight the potential benefits of globalization and stress the importance of responsible governance and sustainable development practices. The ongoing debate underscores the need for nuanced analyses, evidence-based policymaking, and international cooperation to address the complexities surrounding the drain of wealth in a globalized world.


Colonial interventions had a profound impact on tribal economies around the world, often resulting in significant disruptions, transformations, and challenges for indigenous communities. This analysis will explore the various ways in which colonial interventions affected tribal economies, focusing on key themes such as land dispossession, economic restructuring, social changes, and cultural resilience.

One of the most significant impacts of colonial interventions on tribal economies was the process of land dispossession. Colonizers often claimed ownership over vast territories inhabited by indigenous tribes, leading to the forced displacement of communities from their ancestral lands. This land grab not only disrupted traditional livelihoods based on hunting, gathering, agriculture, and pastoralism but also undermined indigenous systems of land tenure and resource management. The loss of land and natural resources had long-term repercussions on tribal economies, as it limited access to traditional livelihood activities and threatened cultural practices tied to the land.

Furthermore, colonial interventions frequently led to the imposition of new economic structures and systems that marginalized tribal communities. For example, the introduction of cash crops, commercial agriculture, and extractive industries often prioritized profit motives over the well-being of indigenous peoples and the sustainable use of natural resources. This shift from subsistence economies to cash-based economies often resulted in economic dependency, exploitation, and inequalities within tribal societies.

The integration of tribal economies into colonial and global markets also had mixed consequences. While some tribes benefited from trade opportunities and access to new technologies, others faced economic exploitation, unequal trade relations, and loss of economic sovereignty. The introduction of taxes, tariffs, and labor policies by colonial authorities further exacerbated economic hardships for tribal communities, leading to cycles of poverty and dependency.

Colonial interventions also brought about social changes within tribal societies, impacting traditional social structures, roles, and relationships. The imposition of colonial laws, governance systems, and education policies often undermined indigenous governance structures, customary laws, and decision-making processes. This disruption of social cohesion and cultural continuity weakened tribal economies’ resilience and ability to adapt to external pressures.

Despite these challenges, tribal economies have demonstrated remarkable resilience and adaptability in the face of colonial interventions. Many indigenous communities have preserved their cultural heritage, traditional knowledge, and sustainable practices despite centuries of external pressures. Some tribes have also engaged in economic diversification, entrepreneurship, and advocacy for indigenous rights, asserting their agency in shaping their economic destinies.

Moreover, contemporary efforts to promote indigenous rights, land restitution, and inclusive development are gradually recognizing the importance of supporting tribal economies on their own terms. Initiatives such as community-based natural resource management, cultural tourism, and fair trade practices aim to empower tribal communities economically while respecting their cultural values and environmental stewardship.

In conclusion, colonial interventions had a multifaceted impact on tribal economies, ranging from land dispossession and economic restructuring to social changes and cultural resilience. While the legacies of colonialism continue to shape indigenous economies today, efforts to promote indigenous rights, economic empowerment, and sustainable development are essential in addressing historical injustices and building more inclusive and equitable societies. Recognizing the strengths and contributions of tribal economies is crucial in fostering meaningful dialogue and cooperation towards a more just and sustainable future for all.



The rise of European private trade refers to the period during the 16th to 18th centuries when European merchants and trading companies, independent of state control, expanded their commercial activities globally. This era marked a significant shift in trade dynamics and contributed to the growth of capitalism, exploration, and globalization.

  1. Exploration and Expansion: European private traders were motivated by the desire for profit, access to new markets, and the quest for valuable commodities such as spices, textiles, precious metals, and slaves. They financed and organized voyages of exploration to distant lands, including Asia, Africa, and the Americas, seeking lucrative trade opportunities.
  2. Trading Companies: Private trading companies, such as the Dutch East India Company, the British East India Company, and the Portuguese trading ventures, played a crucial role in the rise of European private trade. These companies operated under charters granted by their respective governments but enjoyed significant autonomy in conducting trade, establishing settlements, and engaging in diplomacy.
  3. Colonialism and Mercantilism: The rise of European private trade intersected with the era of colonialism and mercantilist policies. European powers sought to establish colonies, extract resources, and control trade routes to maximize economic gains. Private traders often collaborated with colonial authorities, exploiting indigenous populations and resources to fuel their commercial ventures.
  4. Technological Advancements: Advances in navigation, shipbuilding, and cartography, such as the development of the compass, improved sailing vessels, and accurate maps, facilitated the expansion of European private trade. These technological innovations enabled traders to navigate oceans more efficiently, reach distant markets, and establish trade networks across continents.
  5. Impact on Global Economy: The rise of European private trade had a profound impact on the global economy, leading to the integration of distant regions into interconnected trading networks. It facilitated the exchange of goods, ideas, and cultures between Europe, Asia, Africa, and the Americas, shaping modern globalization and economic interdependence.
  6. Challenges and Conflicts: European private trade also faced challenges such as competition from rival traders, piracy, political instability, and conflicts with indigenous populations and other European powers. These challenges often led to diplomatic tensions, trade wars, and the use of military force to protect commercial interests.

In summary, the rise of European private trade was a transformative period in world history, characterized by the expansion of commerce, exploration, and colonization. It laid the foundation for modern global trade systems, economic interconnections, and cultural exchanges that continue to influence the contemporary world.


The impact of Indian commercialization refers to the transformation of India’s economy, society, and culture as a result of increased commercial activities, trade networks, and market integration, particularly during the colonial and post-colonial periods. This process had profound effects on various aspects of Indian life, from economic structures to social hierarchies and cultural practices.

  1. Economic Transformation: Indian commercialization led to a shift from subsistence-based agrarian economies to market-oriented systems. Cash crops such as cotton, indigo, tea, and opium became significant exports, driven by colonial demand and capitalist ventures. This shift stimulated agricultural production, created new employment opportunities, and contributed to the growth of urban centers and trading hubs.
  2. Integration into Global Trade Networks: The expansion of Indian commercialization facilitated the integration of India into global trade networks. Indian merchants, traders, and entrepreneurs engaged in transcontinental trade, connecting India with markets in Europe, Asia, Africa, and the Americas. This integration brought new goods, technologies, and ideas to India while exposing Indian products to international markets.
  3. Social and Cultural Changes: The impact of Indian commercialization was not limited to the economy but extended to social and cultural spheres. The emergence of a merchant class, alongside traditional agrarian communities, reshaped social hierarchies and power dynamics. Commercial success often led to social mobility, prestige, and political influence for merchants, challenging traditional caste-based structures.
  4. Infrastructure Development: The growth of commercial activities spurred investments in infrastructure such as roads, railways, ports, and telegraph networks. These developments facilitated trade, transportation, and communication, reducing logistical barriers and enhancing connectivity within India and with the outside world.
  5. Challenges and Disparities: While Indian commercialization brought economic opportunities and modernization, it also exacerbated inequalities and disparities. Large landholders, merchants, and colonial elites benefited disproportionately from commercial ventures, leading to wealth concentration and exploitation of laborers and small-scale producers. The commodification of land, resources, and labor also raised concerns about environmental degradation and social justice.
  6. Legacy and Contemporary Relevance: The impact of Indian commercialization continues to resonate in contemporary India, shaping patterns of economic growth, urbanization, and globalization. Efforts to balance economic development with social equity, environmental sustainability, and cultural preservation remain ongoing challenges in navigating India’s commercial landscape.

In conclusion, the impact of Indian commercialization was multifaceted, influencing economic structures, social dynamics, cultural practices, and infrastructure development. While it contributed to economic growth and integration into global markets, it also posed challenges in terms of inequalities, environmental sustainability, and social justice, highlighting the complexities of commercial transformations in Indian society.


The Herschell Committee Report, officially known as the “Report of the Committee on Indian Currency and Finance,” was a significant document produced in 1929 by a committee chaired by Lord Herschell. The report examined various aspects of India’s monetary and financial system during the colonial era and made recommendations for reforms.

  1. Background: The Herschell Committee was appointed in response to growing concerns about India’s monetary policies, exchange rates, gold reserves, and economic stability. The committee comprised experts in economics, finance, and colonial administration, tasked with assessing the effectiveness and adequacy of India’s monetary arrangements.
  2. Key Findings: The Herschell Committee Report identified several issues within India’s monetary and financial framework. It highlighted the challenges posed by the gold standard, fluctuations in exchange rates, inadequate gold reserves, and the limited scope for autonomous monetary policy due to British control over key financial decisions.
  3. Recommendations: The report made comprehensive recommendations for reforming India’s monetary system. It proposed the establishment of a central bank for India with greater autonomy and decision-making powers, separate from the Bank of England. This central bank would be responsible for managing currency issuance, gold reserves, exchange rates, and monetary policy in line with India’s economic needs.
  4. Currency Reforms: The Herschell Committee Report also addressed issues related to India’s currency structure. It recommended the adoption of a managed currency system that allowed for flexibility in currency supply, stability in exchange rates, and the ability to respond to economic fluctuations. The report advocated for a gradual transition towards a more balanced and sustainable currency regime.
  5. Impact and Legacy: The recommendations of the Herschell Committee Report had a lasting impact on India’s monetary policies and financial institutions. The report laid the groundwork for the establishment of the Reserve Bank of India (RBI) in 1935, which became India’s central bank with the authority to regulate monetary policy, supervise banks, and manage currency and reserves.
  6. Significance: The Herschell Committee Report is significant in the history of Indian economic development as it represented a shift towards greater financial autonomy and control for India. It reflected growing demands for economic self-determination and the recognition of India’s unique economic challenges within the colonial context.

In summary, the Herschell Committee Report was a pivotal document that shaped India’s monetary and financial landscape, leading to reforms such as the establishment of the RBI and changes in currency policies. Its recommendations addressed longstanding issues and laid the foundation for modern monetary governance in India.


Customary rights of forest-dwellers refer to the traditional and longstanding entitlements, practices, and privileges that indigenous and local communities have over forest resources and lands. These rights are often based on customary laws, community norms, historical usage, and cultural connections to the land. The recognition and protection of customary rights are crucial for ensuring the livelihoods, well-being, and sustainable management of forest ecosystems.

  1. Historical Context: Customary rights of forest-dwellers have deep historical roots, dating back to indigenous land tenure systems and community governance structures. These rights have evolved over generations and are integral to the identity, culture, and subsistence strategies of forest-dependent communities.
  2. Land and Resource Use: Customary rights encompass a range of activities related to land and resource use, including farming, hunting, fishing, gathering of non-timber forest products (NTFPs), grazing livestock, and cultural practices. These rights are often collective in nature, reflecting communal ownership and stewardship of forest lands.
  3. Legal Recognition: In many countries, customary rights of forest-dwellers have been recognized and protected through national laws, international conventions, and court rulings. These legal frameworks acknowledge the rights of indigenous peoples and local communities to access, manage, and benefit from forest resources in a sustainable manner.
  4. Challenges and Threats: Despite legal recognition, customary rights of forest-dwellers face numerous challenges and threats. Encroachments, land grabs, deforestation, resource exploitation, infrastructure development, and conflicting land-use policies often undermine these rights, leading to conflicts, displacement, and loss of livelihoods.
  5. Conservation and Sustainable Management: Recognizing and respecting customary rights is essential for effective forest conservation and sustainable management. Indigenous and local communities play a crucial role as custodians of biodiversity, traditional knowledge, and ecosystem services. Their sustainable practices and conservation efforts contribute to biodiversity conservation, climate resilience, and ecosystem restoration.
  6. Policy and Advocacy: Advocacy efforts by indigenous peoples’ organizations, environmental NGOs, and human rights activists have been instrumental in promoting the recognition and protection of customary rights. These efforts highlight the importance of participatory governance, free, prior, and informed consent (FPIC), and inclusive decision-making processes in natural resource management.

In conclusion, customary rights of forest-dwellers are fundamental to biodiversity conservation, sustainable development, and social justice. Upholding these rights requires collaborative efforts, legal reforms, and respect for indigenous knowledge and governance systems. Ensuring the rights of forest-dwellers is not only a matter of legal compliance but also a moral imperative for promoting equity, resilience, and environmental stewardship.

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