Explanation:

Let’s break this down one by one:

- Statement 1: India had independent economy before the British rule

- True. Before the British, India had its own economic systems—villages were mostly self-sufficient, with their own crafts, trade, and agriculture. It wasn't controlled by outsiders.

- Statement 2: Production was the main source of livelihood for people under British rule

- That’s not quite accurate. During British rule, the economy was reorganized to serve British interests. Agriculture stayed important, but the British discouraged local industries. Many lost traditional livelihoods and turned to unskilled labor or remained in agriculture—not so much as ‘production’ but rather cash crops for export.

So let's look at your options:

- Option 1: Both are correct

- This isn’t right. Only the first statement is correct.

- Option 2: Both are incorrect

- Definitely not—it ignores the historical context.

- Option 3: Statement 1 is correct and statement 2 is incorrect

-  This is the correct answer.

- Option 4: Statement 1 is incorrect and statement 2 is correct

- This flips reality on its head.