Discuss any two factors that lead to stagnating Indian agriculture sector during British rule. Discuss any two liberalization measures pertaining to the tax reforms, introduced by the government, during the economic reform process of 1991.

Question

Accepted Answer

**Two factors leading to stagnating Indian agriculture during British rule:**

1. **Zamindari System:** The exploitative land tenure system introduced by British where zamindars collected high revenues (lagaan) from farmers without investing in agricultural improvement. The main interest of zamindars was to collect lagaan regardless of economic condition of cultivators.

2. **Commercialisation of Agriculture:** Farmers were forced to produce cash crops (cotton, jute) for British industries instead of food crops. This led to food shortages, famines, and loss of self-sufficiency in village economies.

**Two liberalisation measures pertaining to tax reforms:**

1. **Rationalisation of Direct Taxes:** Since 1991, continuous reduction in income and corporate tax to encourage savings and voluntary disclosure of income.

2. **GST Implementation:** Goods and Services Tax Act passed in 2017 to simplify and introduce unified indirect tax system, creating one nation, one tax and one market.