India was a direct colony of the British and the impact of this colonial rule over the economy and society of India has been immense. It must be stated at the outset that direct colonial rule leaves a total impact on the colonized society because every aspect of social life is influenced by colonial policies of the colonizers. A direct colony (as was the case with India) is under the complete control of the colonizers and colonial policies and interests influence every aspect of social life of a colony. Another important fact about India is that the colonial rule lasted for a very long time and this longevity of colonial rule over India affected the vitals of the Indian society.
India in the pre-colonial period had a stable economy. Self-sufficient agriculture, flourishing trade and rich handicraft industries. Subsistence farmers, organized in small village communities carried on agricultural operations in India. "Landlords were not landowners; they only had the right or privilege to collect taxes from the peasants” (Rothermund, page 1). A village was more or less a self-sufficient economic unit and its business contacts with the outside world were limited to payment of land revenue (generally in kind) and the purchase of a few necessary things from the town nearby. The farmer raised only those crops, which he needed for his own use and shared the same with the village artisan who supplied him with simple manufactures that he needed for his domestic consumption. Means of communication were of a primitive type. Therefore, trade in agricultural produce, was somewhat limited. The farmer usually raised enough produce to feed himself and the non-agricultural members of the village community. If his crop yielded more than the consumption needs, due to favorable climatic conditions, he stored that surplus for use in the lean years. Storage of food grains was a common practice among the pre-colonial agriculturists and constituted, under these conditions, the only remedy against famines.