Question

Directions for questions 15 to 20: Read the passage below and answer the question that follows.

A major problem of Indian industrial and commercial development was the supply of capital. Until 1850, British capital was shy of Indian adventure. The risks and unknown factors were too great, and prospects in other directions too bright. The working capital of the agency houses after 1813 at first consisted mainly of the savings of the Company's servants. Their cries of woe when these houses fell as in the crisis of 1831 were loud and poignant. Indian capital was also shy for different reasons. It needed to acquire confidence in the new regime, and outside the presidency towns, to acquire the habit of investment. Investment for large-scale production for 'enabling' works like railways was an unfamiliar and suspected practice. Thus the first big developments came when European capital was coaxed into the country by government guarantees or went of its own free will to develop industries with which it was already familiar as in the case of jute or coal. Indian capital followed where it was in touch with European practice as in Bombay and dealing with familiar products like cotton. These considerations throw into all the greater relief the achievement of the Tatas in developing iron and steel. Thus the major part of the capital provided was British with a steadily increasing Indian proportion from 1900. As late as 1931-32 the capital of companies registered abroad was nearly four times that of companies registered in India. But this is not an exact guide because it leaves out of account the stock in British companies held by Indians, as well as government stocks. Speaking generally it may be said that the capital of the cotton industry was mainly Indian, that of the iron and steel industry entirely so, that of the jute industry about half and half, while the coal and plantation industries were mainly British, together with that used for the building of railways, irrigation, and other public works. Management in the cotton and steel industries was mainly Indian though European technicians were freely employed, that of the jute, coal, and the plantation industries being European, the jute men in particular being Scotch. Their capital, apart of course from government enterprise, operated through joint-stock companies and managing agencies. The latter arose through the convenience found by bodies of capitalists seeking to develop some new activity and lacking any Indian experience, of operating through local agents. It arose in the period after 1813 when private merchants took over the trade formerly monopolized by the Company. The money would be found in Britain to promote a tea garden, a coal mine, or a jute mill, but the management would be confided to a firm already on the spot. The managing agency was the hyphen connecting capital with experience and local knowledge.

Until 1914 the policy of the government continued in the main to be one of 'enabling' private capital and enterprise to develop the country. Direct promotion was confined to public utilities like canals and railways. The line between enabling and interfering action became distinctly blurred, however, in the case of the cotton industry and there was a tendency for enabling action to pass over into the positive promotion of particular projects. This was most noticeable in the time of Lord Curzon with his establishment of an imperial department of agriculture with a research station at Pusa and a department of commerce and industry presided over by a sixth member of the Viceroy's Council. The first World War began the transition to a new period of active promotion and positive support. As the conflict lengthened there arose a demand for Indian manufactured goods. India failed to take full advantage of this opportunity, partly because of uncertainty as to the future and partly because the means for sudden expansion were lacking. The outcome of this situation was the appointment of an industrial commission in 1916 under pressure from London. The commission criticized the unequal development of Indian industry which had led to the missing of her war opportunity. A much closer co-operation with industry was planned through provincial departments of industry. Increased technical training and technical assistance to industry was proposed while it was suggested that the Central government should set up a stores department which should aim at making India self-sufficing in this respect. The commission's report was only partially implemented, but a stores department and provincial industrial departments were created and something was done towards promoting technical assistance. The importance of the report and its aftermath was that it marked the transition from the conception of Indian economy in broadly colonial terms with freedom for private enterprise to the conception of India as an autonomous economic unit.

After the start of the first World War, all of the following could be likely reasons for the British government adopting a proactive stance towards Indian industry except:

• A. The major investors in Indian enterprises were British and they had missed out on an opportunity.
• B. The war had created a huge demand for industrial goods.
• C. The British government wanted economic development of the country as India was a strategic economically in the war.
• D. The desire to see India as self-sufficient in technical expertise.

Hint:

Separate the immediate wartime causes of the government's shift (missed opportunity, demand, strategic and war-effort value) from the industrial commission's later recommendation about technical self-sufficiency.

Answer 1

The Correct Option is D

This is an "except" question, so four of the five options will be genuine, war-linked reasons the passage supports, and one will not really be a reason for the government turning proactive. Let's check each one against the passage.

1. The major investors in Indian enterprises were British and they had missed out on an opportunity: The passage says India "failed to take full advantage of this opportunity" created by wartime demand, and since British capital dominated Indian industry at the time, this missed chance was effectively a British loss too, giving the British government a direct reason to push for change.
2. The war had created a huge demand for industrial goods: The passage says directly that "as the conflict lengthened there arose a demand for Indian manufactured goods." This is stated as fact, so it is a clear reason.
3. The British government wanted economic development of the country as India was a strategic economically in the war: The passage shows the war pushed the government from merely "enabling" private capital into "a new period of active promotion and positive support," which fits India mattering strategically to the war effort.
4. The development of Indian economy was required for contributing towards the war effort: This follows the same logic as the demand for manufactured goods; a stronger Indian economy meant more industrial output for the war, so this is also a reasonable, text-supported motive.
5. The desire to see India as self-sufficient in technical expertise: The passage places this idea only after the 1916 industrial commission was appointed, as one of its recommendations, once the government was already acting. It is described as an outcome the commission wanted to build towards, not as one of the original triggers that pushed the government to turn proactive right after the war began.

Options 1 through 4 are all reasons tied to the immediate pressure of wartime demand and missed opportunity, which is what actually pushed the government to act. Option 5 describes a longer-term goal that only shows up later, after the industrial commission had already been set up, so it is the odd one out.

Let's summarize:

• Wartime demand, missed opportunity, and strategic and war-effort value are the immediate triggers the passage links to the shift in government policy.
• Self-sufficiency in technical expertise appears later, as a recommendation of the 1916 commission, not as a starting reason for the shift.

So the exception, the option that is not a reason for the proactive stance, is option 5.