Beruflich Dokumente
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Aditya Singh | B.A. - LL.B (H) 2nd Semester | Roll no. -03| Student Id – 201902285
Primarily I would like to thank God for being able to complete this
project with success. Then I would like to thank my History
professor Dr. Gulrukh Khan whose valuable guidance has been
the ones that helped me patch this project and make it full proof
success, her suggestions and her instructions has served as the
major contribution towards the completion of the project.
Last but not the least I would like to thank my classmate Md.
Rasikh Raza Pahalwi and Mirza Ahraz Baig who helped me a
lot in doing this project.
TABLE OF CONTENTS
PAGE 1
Introduction 3
Some Impacts of British colonial 4
rule
1.Ruin of artisans and handicraftsmen 4
2.Impoverishment of peasantry
5
3.Ruin of old zamindars and rise of new
landlordism
4.Stagnation and deterioration of 6
agriculture 8
5.Development of modern industries 9
6.Poverty and famines
10
PAGE 2
Bibliography 20
INTRODUCTION
PAGE 3
interests of British trade and industry were many and varied. We will discuss
them in the coming paragraphs.
PAGE 4
the iron, poetry, glass, paper, metals, shipping, oil-pressing, tanning and
dyeing industries. Apart from the influx of foreign goods, the oppression
practiced by the East India Company and its servants on the craftsmen of
Bengal during the second half of the 18th century, forcing them to sell their
goods below the market price and to hire their services below the prevailing
wage also contributed to the ruin of Indian industries. Moreover, this
unemployed craftsmen and artisans could not find any alternative occupation
open to them and thus they had to return to agricultural sector leading to
‘progressive ruralisation of India’. Thus this independence of population on
agriculture gradually increased from 55% in 1901 to 72% in 1931 and this
led to progressive sub-division and fragmentation of agricultural holdings1.
An overburdened agriculture sector was a major cause of poverty during
British rule and this upset the village economic set-up.
2. Impoverishment of Peasantry:
The peasant was also progressively impoverished under British rule. In spite
of the fact that he was now free of internal wars, his material condition
deteriorated and he steadily sank into poverty. Government took the place of
the zamindars and levied excessive land revenue which was in the beginning
fixed as high as one-third to one-half of the produce. Heavy assessment land
was one of the main causes of the growth of poverty and the deterioration of
agriculture in the 19th century. Even though the land revenue demand went
on increasing year after year – it increased from Rs. 15.3 crores in 1857-58
to Rs. 35.8 crores in 1936-37 – the proportion of the total produce taken as
land revenue tended to decline as the prices rose and population increased.2
1
Available at http://www.economicsdiscussion.net/indian-economy/british-colonial-rule-on-the-indian-
economy/19007 (Last visited on 16-03-2020)
2
Bipin Chandra, History of modern India, 184 (1st Edition, 1971,NCERT, Delhi)
PAGE 5
The peasants got little economic return for the evil of high revenue demand.
The government spent very little on agriculture. Even the maintenance of
law and order tended to benefit the merchant and the money lender rather
than the peasant. The loss of land and overcrowding of land caused by
deindustrialization and lack of modern industry compelled the landless
peasants and ruined artisans and handicraftsmen to become either tenants of
the money-lender and zamindars by paying rack-rent or agricultural
labourers at starvation wages. Thus the peasantry was crushed under the
triple burden of the Government, the zamindar or landlord, and the money-
lender. Permanent Settlement system was enforced in large parts ny the
government whose primary objective was maximization of rents and
securing its share of revenue. Transferability of land being one feature of the
new settlement system resulted in tenants losing all their traditional rights in
land. The zamindars, with increased powers, resorted to summary evictions,
demanded illegal dues and ‘begar’ to maximize their share in the produce
and, as such, had no incentive to invest for improvement of agriculture. The
overburdened peasants had to approach the moneylenders to be able to pay
their dues to the zamindars. The money lender who was often also the
village grain-merchant, forced the farmer to sell the produce at low prices to
clear his dues. The powerful money-lender was able to manipulate the
judiciary and law in his favour. The peasant’s hardship increased at the time
of famine and scarcity. This was as much true as for the zamindari areas as
for areas under Ryotwari and Mahalwari systems3. The peasants became
landless.
PAGE 6
The first few decades of British rule witnessed the ruin of most of the old
zamindars in Bengal and Madras. Many of the great zamindars of Bengal
were utterly ruined. By 1815 nearly half of the landed property of Bengal
had been transferred from the old zamindars, who had resided in the villages
and who had traditions of showing some consideration to their tenants, to
merchants and other moneyed class, who usually lived in towns and who
were quite ruthless in collecting to the last pie that was due from the tenant
irrespective of difficult circumstances. More and more land passed into the
hands of the money-lenders, merchants, and rich peasants who usually got
the land cultivated by tenants. One reason why the Indian moneyed class
were keen to buy lands and become landlords was the absence of effective
outlets for investment of their capital in industry. Another process through
which the landlordism spread was that of subletting. Many owner-cultivators
had occupancy tenants, having a permanent right to hold land, found it more
convenient to lease out land to land-hungry tenants at exorbitant rent than to
cultivate it themselves. A remarkable feature of the spread of landlordism
was the growth of subinfeudation of intermediaries4. Since the cultivating
tenants were generally unprotected and the overcrowding of land led tenants
to compete with one another to acquire land, the rent of land went on
increasing. An extremely helpful factor of the rise and growth of zamindars
and landlords was the political role they played during India’s struggle for
independence along with the princes of protected states they became the
chief political supporters of the foreign rulers and opposed the rising
national movement. Realising that they owed their existence to British rule,
they tried hard to maintain and perpetuate it. Under both the systems –
4
Bipin Chandra, History of modern India, 189 (1st edition, 1971, NCERT, Delhi)
PAGE 7
Permanent settlement and Ryotwari settlement, the land revenue or the rent
fixed was excessively high and this led to destruction of the organic village
community in India. This resulted in total depression in agriculture and
industry.
5
Bipin Chandra, History of modern India, 190 (1st edition, 1971, NCERT, Delhi)
PAGE 8
government of India had spent by 1905 over 360 crores of Rupees on the
railways which were demanded by British business interest, it spent over the
same period less than 50 crores of Rupees on irrigation which would have
benefitted millions of Indian cultivators. At a time when agriculture all over
the world was being modernized and revolutionized, Indian agriculture was
technologically stagnating, hardly any modern machinery was used. The
cultivator had neither the means nor any incentive to invest in agriculture.
The zamindar had no roots in the villages, while the government spent little
on agricultural, technical or mass education. All this, together with
fragmentation of land due to sub- infeudation, made it difficult to introduce
modern technology which caused a perpetually low level of productivity.6
PAGE 9
Railway freight rates encouraged foreign imports at the cost of trade in
domestic products. It was more difficult and costlier to distribute Indian
goods than to distribute imported goods. Another serious weakness of Indian
industrial effort was the almost complete absence of heavy or capital goods
industries, without which there can be no rapid and independent
development of industries. Apart from machine-based industries, the 19th
century also witnessed the growth of plantation industries such as indigo, tea
and coffee. They were almost exclusively European in ownership. Indigo
was used as a dye in textile manufacture. Indigo manufacture was introduced
in India at the end of the 18th century and flourished in Bengal and Bihar.
Indigo planters gained notoriety for their oppression over the peasants who
were compelled by them to cultivate indigo. Another feature of Indian
industrial development was that it extremely lopsided regionally. Indian
industries were concentrated only in a few regions and cities of the country.
Large parts of the country remained totally underdeveloped. This unequal
regional economic development not only led to wide regional disparities in
income but also affected the level of national integration. It made the task of
creating a unified Indian nation more difficult. An important social
consequence of even the limited industrial development of the country was
the birth and growth of two new social classes in Indian society – the
industrialist capitalist class and the modern working class.7 The two classes
were entirely new in Indian history because modern mines, industries and
means of transport were new.
7
Bipin Chandra, History of modern India, 193 (1st edition, 1971, NCERT, Delhi)
PAGE 10
A major characteristic of British rule in India, and the net result of British
economic policies, was the prevalence of extreme poverty among its people.
Throughout the period of British rule most Indians always lived on the verge
of starvation. As time passes, they found it more and more difficult to find
employment or a living, British economic exploitation, the decay of
indigenous industries, the failure of modern industries to replace them, high
taxation, the drain of wealth to Britain, and a backward agrarian structure
leading to the stagnation of agriculture and the exploitation of the poor
peasants by the zamindars, landlords, princes, money-lenders, merchants.
The poverty of the people found its culmination in a series of famines which
ravaged all parts of India in the second half of the 19th century. The first of
these famines occurred in Western U.P. in 1860-61 and cost over 2 lakh
lives. In 1865-66 a famine engulfed Orissa, Bengal, Bihar and Madras and
took a toll of nearly 20 lakh lives, Orissa alone losing 10 lakh people. More
than 14 lakhs persons died in the famine of 1868-70 in Western U.P.,
Bombay and Punjab. Perhaps the worst famine in Indian history till then
occurred in 1876-78 in Madras, Mysore, Hyderabad, Maharashtra, Western
U.P., and the Punjab. Maharashtra lost 8 lakh people, Madras nearly 35
lakhs, Mysore nearly 20 percent of its population and U.P. over 12 lakhs.8
The famine of 1899-1900 followed quickly and caused widespread distress.
In spite of official efforts to save lives through provision of famine relief,
over 25 lakh people died. These famines and the high tosses of life in them
indicate the extent to which poverty and starvation had taken root in India.
PAGE 11
The intellectuals of first half of the nineteenth century were of impression
that the British rule would modernize the country based on latest technology
and capitalist economic organization and hence supported British rule. After
the 1860s they became politically conscious and they began to probe into the
reality of British rule in India.
The constant flow of national wealth from India to England for which India
did not get adequate economic, commercial or material return has been
described by Indian national leaders and economists as ‘drain’ of wealth
from India. This was the drain of wealth theory.9 “The drain of wealth
theory” was first and foremost put forward by an economic analyst Dadabhai
Naoroji (The Grand Old Man of India) after his brilliant analysis of the
colonial economy. The term ‘economic drain’ refers to a portion of national
product of India which was not available for consumption of its peoples, but
was being drained away to Britain for political reasons and India was not
getting adequate economic or material return for it.10 A prominent theme in
nationalist economic thinking was this was one of the most important causes
of India’s poverty. Economic drain was an integral feature of the East India
Company’s administrative and economic policies. The colonial government
was utilizing Indian resources – revenues, agriculture, and industry not for
developing India but for utilization in Britain. If these resources been
utilized within India then they could have been invested and the income of
the people would have increased. The drain of wealth was interpreted as an
indirect tribute extracted by imperial Britain from India year after year. In
the mercantilist concept an economic drain takes place if gold and silver
9
Available at https://selfstudyhistory.com/2015/10/15/drain-of-wealth/ ( Last visited on 16-03-2020)
10
Rajiv Ahir, A Brief History of Modern India,,571 ( 24th edition, 2018, Spectrum Books Pvt. Ltd., New
Delhi)
PAGE 12
flow out of a country as a consequence of an adverse balance of trade. In the
50 years before the battle of Plassey, the East India Company had imported
bullion worth 20 million Euros into India. To balance the exports over
imports from India. British government adopted a series of measures to
restrict or prohibit the imports of Indian textiles into England. Apart from
other measures, in 1720 the British government forbade the wear or use of
Indian silks and calicoes in England on pain of a penalty on the weaver and
the seller.
Dadabhai Naoroji was the first man to say that internal factors were not the
reasons of poverty in India but poverty was caused by the colonial rule that
was draining the wealth and prosperity of India. The drain of wealth was the
portion of India’s wealth and economy that was not available to Indians. The
drain of wealth theory systematically initiated by Dadabhai Naoroji in 1867
and further analyzed and developed by R.P. Dutt, M.G. Ranade etc. In 1867,
Dadabhai Naoroji put forward the ‘drain of wealth’ theory in which he stated
that the Britain was completely draining India. He mentioned this theory in
his book Poverty and Un-British Rule in India. He put forward the idea that
Britain was draining and bleeding India, and that too for nothing. He slated
that out of the revenue raised in India nearly one-fourth goes out of the
country and is added to the resources of England. He argued that this amount
if not drained away would have been invested in India and increased the
people’s economy. He considered it as a major evil of British in India. To
quote Dadabhai Naoroji, “materially” British rule caused only
“impoverishment”; it was like “the knife of sugar, that is to say there is no
oppression, it is all smooth and sweet, but it is the knife, notwithstanding”.
PAGE 13
Naoroji observed in 1880, “it is not the pitiless operations of economic laws,
but it is thoughtless and pitiless action of the British policy; it is pitiless
eating of India’s substance in India and further pitiless drain to England. In
short it is pitiless perversion of Economic Laws by the sad bleeding to which
India is subjected that is destroying India.”11
Dadabhai Naoroji and other economic nationalists gave several factors that
caused external drain. These are:
11
Available at https://selfstudyhistory.com/2015/10/15/drain-of-wealth/ ( Last visited on 12-03-2020)
PAGE 14
Amount of drain
The Indian leaders estimate of the drain differed from person to person and
from year to year. The general basis of calculation was the difference
between exports and imports, but there were other factors as well. R .C .Dutt
observed that one half of the net revenue of India flows annually out of
India.R .C .Dutt’s estimate was about 20 million euro a year in the early
years of the 20th century. Ranade declared that of the national income more
than one-third was taken away by the British in one form or other. In
Naoroji’s calculation, this huge drainage amounted to about 12 million Euro
per year. In average, this amounted to at least half of the total revenue
income of the British Indian government. Dadabhai Naoroji stated that out
of the revenue raised in India nearly one fourth goes out of the country and
is added to resources of England (about 12 million euro per year). A modern
historian would put the amount of drainage at 17 million per annum in the
late nineteenth and early twentieth centuries, and point out that this
“represents less than 2per cent of the value of the value of India’s exports of
commodities in that period”.
Impact on Economy
The drain theory was not limited to the narrow concept of export of money
or good, but was based on wider economic reasoning and consideration. The
drain affected the country’s prospects of employment and income. As R. C.
Dutt pointed out when taxes paid by people are spent in the country the
money circulates among the people fructifies trades, industries and
agriculture and in one shape or another reaches the mass of the people when
the money is sent out of the country it does not stimulate her trades
PAGE 15
industries or research the people in any form. The drain really denuded India
of its productive capital and created the shortage of capital which hindered
industrial development. This directly improvised India and stultified the
process of capital formation. In R. C. Dutt’s view those drain flowed mainly
out of land revenue and thus caused impoverishment of the peasantry.
Dadabhai Naoroji argued what was being drained out as “potential surplus”
that could generate more economic development if invested in India. Some
of the recent historical writing point out that the fact still remains that India
was not transformed into a full-fledged capitalist economy. As in the case of
agrarian economy, so also in other sectors, British policies failed to foster
growth. And this was due to the colonial nature of those policies i.e., the
policy of gearing up the colonial economy to the needs of the economy of
the mother country. A revisionist view claims that on the whole ‘colonial
India experienced positive economic growth’. But this growth, it is admitted,
varied widely in both time and space. In other words, there were periods of
growth (for example 1860-1920) and the regions of prosperity (such as
Punjab Madras and western Uttar Pradesh), and the generalized view of
colonial policies cannot explain these regional and periodic variations. But
where stagnation prevailed, it was to a large extent because the government
did not do as much as it should have by investing the resources generation,
such as irrigation, education and healthcare. The revisionist view
acknowledges that it was the presence or absence of these critical resources,
which determined regional development or lack of it.
Home charges:
PAGE 16
“Home charges” or paying for the secretary of state and his establishment at
the India office in London ,as well as pay, pension and training costs for the
civilian and military personnel –or “the men who ruled India”. Before the
revolt of 1857 the Home charges varied from 10% to 13% of the average
revenues of India. After the revolt the proportion shot up to 24% in the
period 1897-1901. In 1901-02, the Home charges amounted to 17.36
million. During 1921-22, Home charges sharply increased to 40% of the
total revenue of the Central Government.
Payment towards pensions and furloughs of British officers in the civil and
military departments in India. Expenses on India Office establishment in
London, Payments to British war office etc. All these charges were solely
due to India’s subjection to foreign rule.
The secretary of State and Government of India purchased stores for the
Military, Civil and Marine Departments in English market. The annual
PAGE 17
average expenditure on stores varied from 10% to 12%of the home charges
between1861-1920.
CONCLUSION
The British rule stunted the growth of Indian enterprise. The economic
policies of British checked and retarted capital formation in India. The drain
12
Available at https://exampariksha.com/economic-impact-of-british-rule-in-india-history-study-material-
notes/ (Last visited on 12-03-2020)
PAGE 18
of wealth financed capital development in Britain. Indian agricultural sector
became stagnant and deteriorated even when a large section of Indian
populace was dependent on agriculture for subsistence. The British rule in
India led to the collapse of handicraft industries without making any
significant contribution to development of any modern industrial base. Some
efforts by the colonial British regime in developing the plantations, mines,
jute mills, banking and shipping, mainly promoted a system of capitalist
firms that were managed by foreigners. The selfish motives led to further
drain of resources from India. India’s economic backwardness and poverty
were not due to the niggardliness of nature. They were man-made. The
natural resources of India were abundant and capable of yielding, if properly
utilized, a high degree of prosperity to the people. But as a result of foreign
rule and exploitation, and of a backward agrarian and industrial economic
structure, - in fact as the total outcome of its historical and social
development – India presented the paradox of poor people living in a rich
country.
PAGE 19
BIBLIOGRAPHY
3. https://exampariksha.com/economic-impact-of-british-rule-
in-india-history-study-material-notes/
4. https://selfstudyhistory.com/2015/10/15/drain-of-wealth/
5. http://www.economicsdiscussion.net/indian-economy/british-
colonial-rule-on-the-indian-economy/19007
PAGE 20