The correct option is 1 and 3 only.
Explanation
"De-industrialisation" in the context of the Indian economy during British rule refers to the systematic destruction and decline of indigenous traditional handicraft industries, particularly textiles, without the simultaneous development of modern machine-based industries.
- Statement 1 is Correct: The influx of cheap, machine-made goods from Britain, facilitated by the development of railways and discriminatory tariff policies (one-way free trade), flooded the Indian market. This replaced domestic products and created a new, captive consumer market for British manufactured goods within India.
- Statement 2 is Incorrect: De-industrialisation led to the ruin and collapse of indigenous handicraft industries, not their revival. The loss of royal patronage and the inability to compete with low-cost mass-produced British goods caused the decline of traditional sectors.
- Statement 3 is Correct: The artisans and craftsmen displaced from the ruined industries had no alternative employment in a modern industrial sector. Consequently, they were forced to fall back on the land for livelihood, leading to the "ruralisation" of the economy and increasing the population burden on the agricultural sector (overcrowding and disguised unemployment).
Key Takeaway:
De-industrialisation transformed India from a net exporter of finished goods into a net importer of British manufactures and a supplier of raw materials, while simultaneously overburdening the agricultural sector due to the displacement of artisans.