Quotes on condition of Indian economy during British rule

During the pre -British period, the problem of stagnation, poverty and backwardness of Indian economy was not so acute. With the advent of British in India, the economic structure in India had to face a lot of change. During the first period of 100 years i.e. from 1757 to 1857, British looted huge amounts of resources from India. Cottage industries were totally destroyed due to the colonial strategy followed by the British rulers. The gradual disappearance of Indian rulers and their courts who were the main customers of Handicrafts produced also gave a big jolt to these industries.      

British did not permit to modernize the industrial sector during 18th and 19th century. Indian economy was turned into importer of British manufactured goods and exporter of tea, coffee, oil seeds, foodstuffs and other industrial raw materials which were considered essential for running British industries in England.   

The huge amount of drain of capital assets started after 1857 was mainly responsible for the economic backwardness in India. Even after transfer of power of Crown in 1858, drain continued and was mostly in the form of Home charges.    The British rule introduced the concept of transferability of land enabling the money lender or the rich peasant to take possession of land. The process of transfer of land from cultivators was intensified during period of scarcity and famines.

The economic drain of wealth from India prevented formation of capital in the country It consisted of two parts. First, remittances by European officials of their savings and for their expenditure in England and in India from salaries , pensions paid in England and second, remittances by non-official Europeans. This capital was again brought back to India to get them monopoly for setting up industries in India  These industries again drained off Indian capital in the form of interest and profits. These economic drain-out since the inception of British rule worked as a dampener towards the strategy of economic development in India till 1947. 

During British rule no official arrangement was made to measure the national income of India. The economic impact of British rule in India was basically on the following seven issues :

1. Disruption of Traditional economy.

2. Stagnation and deterioration of Agriculture.

3. Ruin of Artisans and Craftsmen.

4. Impoverishment of Peasantry.

5. Development of modern industries.

6. Poverty and Famine.

7. Ruin of old Zamindars and rise of new Landlordism. 

All the developed countries of today developed almost entirely over the period during which India was ruled by Britain, most of them doing so after 1850. It is quite interesting to note that the dates of the beginning of Industrial revolution in Britain and the British conquest of Bengal virtually coincide.  

The basic fact is that the same social, political. and economic processes that produced industrial development, social and cultural progress in Britain also produced and then maintained economic underdevelopment, social and cultural backwardness in India. Reason for this is obvious. Britain subordinated the Indian economy and determined the basic social trends in India according to her own needs.

The result was, as we know, stagnation of India's Agriculture and industries, exploitation of its peasants, working class by the Zamindars, Princes, Landlords, merchants, moneylenders, Capitalists, foreign Government and its officials and the spread of poverty, disease and semi- starvation. 

This is how the Indian economy was managed by the British rule - i.e. from 1757 to 1858 by East India Company and British Rule from 1858 to 1947. 

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