The down fall and disintegration of Mughal Empire turned India into a land of erosion and political fragmentation. A large number of independent and semi-independent rulers tried to establish their central supremacy in Bengal, Mysore, Avid and Hyderabad.
There were continuous battles among small rulers, petty chiefs and kings but they all failed to establish central authority for a long period. The English people through East India Company entered the country with the plea of trade.
Ultimately, with their divide and rule policy they got fruits and the whole of India was under the crown rule. During the period of almost of two centuries the prosperous and rich country was reduced to pure, stagnant, backward and underdeveloped.
India which was known as a golden sparrow was rolled into the morose of poverty and exploitation. ‘Divide and Rule’ policy of the British Govt., led to systematic plunder and continued exploitation.
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The British had their self ends, so they introduced many forms of exploitation to squeeze the economy. These methods of exploitation are as of trade malpractices, profitable import of British capital and enterprise, economic drain, employment of British nationals as colonial administrators, stores purchase policy, manipulation of exchange rates, preferential tariffs favourable to Britain and exploiting India’s resources for war.
All these malpractices reduced India to a supplier of raw material. Practically we became a British colony. Consequently the status of Indian economy on the eve of independence was colonial, semi-feudal, backward, stagnant and depreciated. Partition of the country at this juncture added to our worries.