Colonialism became a fetter on India’s agricultural and industrial development. Agriculture stagnated in most parts of the country and even deteriorated over the years, resulting in extremely low yields per acre, and sometimes even reaching zero. There was a decline in per capita agricultural production which fell by 14 per cent between 1901 and 1941. The fall in per capita food grains was even greater, being over 24 per cent.
Over the years, an agrarian structure evolved which was dominated by landlords, moneylenders, merchants and the colonial state. Subinfeudation, tenancy and sharecropping increasingly dominated both the zamindari and ryotwari areas. By the 1940s, the landlords controlled over 70 per cent of the land and along with the moneylenders and the colonial state appropriated more than half of the total agricultural production.
The colonial state’s interest in agriculture was primarily confined to collecting land revenue and it spent very little on improving agriculture. Similarly, landlords and moneylenders found rack-renting of tenants and sharecroppers and usury far more profitable and safe than making productive investment in the land they owned or controlled. All this was hardly conducive to agricultural development.
In many areas, a class of rich peasants developed as a result of commercialization and tenancy legislation, but most of them too preferred to buy land and become landlords or to turn to moneylending. As a result capitalist farming was slow to develop except in a few pockets. On the other hand, impoverished cultivators, most of them small peasants, tenants-at-will and sharecroppers, had no resources or incentive to invest in the improvement of agriculture by using better cattle and seeds, more manure and fertilizers and improved techniques of production. For most of the colonial period, landlessness had been rising, so that the number of landless agricultural labourers grew from 13 per cent of the agricultural population in 1871 to 28 per cent in 1951. The increase in tenant farming and sharecropping and overcrowding of agriculture was followed by an extreme subdivision of land into small holdings and fragmentation. Further, these holdings were scattered into non-contiguous parcels which led to cultivation becoming uneconomic and incapable of maintaining the cultivator even at a subsistence level.