Statement I : The economy of India in the 19th century came to a state of ruin under English East India Company. Statement II : English East India Company’s acquisition of Dtwani right led to the miseries of the peasants and those associated with the traditional handicrafts industry of India.

Statement I is true as the 19th-century Indian economy suffered structural distortion and chronic poverty under British rule, shifting from a prosperous, diversified economy to a stagnating colony. Statement II is also true and provides the correct explanation. The acquisition of Diwani rights in 1765 transformed the East India Company into a territorial power with revenue collection authority [2]. This led to exploitative land revenue systems like the Permanent Settlement (1793), which reduced farmers to tenants and caused grinding poverty. Simultaneously, discriminatory trade policies and the influx of cheap machine-made British goods caused 'deindustrialization,' ruining the traditional Indian handicrafts industry. The continuous 'drain of wealth' and high revenue demands systematically sapped the rural economy, leading to the ruin described in Statement I.

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 5: Land Reforms > 5.1 Land Rights before Independence > p. 190
2. [2] Indian Polity, M. Laxmikanth(7th ed.) > Chapter 1: Historical Background > Historical Background > p. 1