‘Head is held high’ indicates that we should not be ashamed of ourselves. Rather we should be proud of our country, for what we have. A sense of self-dignity is what we need to enjoy our freedom fully.

Yes, that can be said, not in a literal sense though. In the British India the poet was sad to see that most people had no sense of self-dignity. And they were rather happy to serve the British and take the due advantages. So the poet wanted every Indian to be proud of his country.

If people have no sense of self-dignity, they would easily yield to others. And the British force took that opportunity to rule over them. So, the poet realized that every head should be held high in order to be free from external forces.